Quitting Apps?
Over the last few weeks I have experienced quite a shift in terms of my interests. When talking to strangers and the inevitable question arises about what you do, or when catching up with old friends and relatives and they ask how work is going, my answer is shifting away from app development and I've started mentioning the "I" word a bit more.
Investing, I tell them. It's such a general term, so the follow-up questions are practically guaranteed. What kind of investing? Are you a day trader? Etcetera.
Anyway, the point is that I am slowly shifting away from app development. Since vibe coding became a thing, the number of apps on the App Store has gone parabolic. My app portfolio continues to provide a decent amount of income but it is ever so slowly but relentlessly declining. I see the writing on the wall. The golden age of indy app development is over. The bar has risen so much higher than my waning interest and enthusiasm can top.
Don't get me wrong, one can still make it as an indy developer. Particularly, there is still quite the opportunity for someone who can grow and audience and pair it with bespoke software. But you need to really fucking love it. There is absolutely no room in that game anymore for casual participants and copy cats (not to imply that I was either of those things).
For me, the app game has become an up-hill battle; mental ditch-digging; back breaking labour of the brain. But doesn't AI make it so much easier? Yes! Indeed it does but the devil is in the details. There are a million little details involved from taking an app that just works, to an app that is stable, never crashes, free from race conditions and behaves exactly how you want it. And then taking that and packaging it up for distribution and marketing it... It's a shit-tonne of extremely unforgiving work. And when you are repeatedly un-rewarded for such effort, the will to continue doing it drops to near zero, which is where I'm at now.
I can no longer rely on apps as my main source of income. I will absolutely continue building software with AI but it will almost exclusively be stuff that "scratches my own itch" rather than stuff that I think will be marketable.
As for what I am doing now, my focus has shifted. I now spend almost all of my attention on financial markets; looking for opportunities in stocks. It has been vastly more rewarding than spending countless man-hours building software with less than a 1% chance of succeeding on the App Store. This is quite the transformation for me personally because I have always identified as a creative builder type and viewed investor types as stodgy and lacking in depth. That was cope, I'll admit.
Conventional wisdom in finance, the kind of stuff you will hear repeated endlessly by those in the industry, is that you cannot consistently outperform the market index. Even professional money managers, by and large, fail to outperform, they say. It is easy to get lulled into this kind of thinking and just stick your money in an index fund and move on with your life. It is in the financial industry's interest that you do so. And that probably makes sense for most people who have a profession that demands the majority of their attention. But for someone like me, who has been chewed up and spat out by the consumer app grind, I have some time on my hands. So I have the time to go deep, to go down rabbit holes & find some edge. For me it is not necessarily about beating the index, it is about generating enough income to give my family the lifestyle they deserve while simultaneously growing our wealth faster than inflation. If I can achieve this on a year by year basis, I don't care what the index is doing.
What I have found, relatively consistently, is that there is usually a sector, or a particular company that is out of favor, trading at an attractive price while other sectors are in favor and trading at very expensive prices. We can see this today in semiconductors vs software for example. If you want to beat the index, invest in the out-of-favor sectors and businesses and just maintain or optionally reduce exposure in the popular stocks. It really is that simple. This approach works and it has played out time and time again throughout history. Of course nothing is so cut and dry in financial markets, but over time, I believe this approach will beat index investing over time. But it takes time and focus. One must pay attention to financial markets on a daily basis and consume a lot of information in order to find the right, beaten down opportunities to allocate capital to. The market mis-prices things all the time, sometimes only briefly and sometimes for a very long time. If you are paying attention, you can take advantage.
Anyway, I've been doing this investing thing for just over a year now and I have managed to beat the S&P 500 by a decent amount, however I've lagged the Nasdaq 100, which isn't a surprise given the unprecedented AI megatrend underway (not an excuse). Given my goals, I would say this is barely good enough. I would like to be doing a lot better. But I am optimistic because I have made quite a few mistakes over this time and learned from them. Basically, what I have learned is that I am my own worst enemy. The good news is that my stock picking is sound but my capital management is not so great. Most of my underperformance can be traced back to a few things: (1) getting emotional and selling due to price action despite nothing changing about the business, (2) selling winners too early and (3) sizing too small on high conviction setups. I am optimistic because these 3 things are pretty easy to fix so I expect to improve my returns going forward. But nothing is guaranteed, of course, and perhaps a year from now, I will be rationalizing my new 9-to-5 ☠️.
