How is it possible that on the one hand app developers make record profits and on the other hand the market share of free apps is steadily increasing? The answer is relatively simple: Most app developers earn little to nothing. According to the latest VisionMobile’s Developer report, 50% of iOS and 64% of Android developers are working below the poverty line of app developers. (This is $ 500 per app per month of $ 500 per app) In fact, the top 1.6% of developers generate the bulk of the app store sales, while the rest earn a penny.
Discover a market opportunity
There are three factors to consider when developing a sustainable product that generates revenue:
- The right timing
- The right market
- The right place
So you have to find a product and its market to start an App StartUp.
Product Market Fit
Marc Andreessen was the first to use the term Product-Market fit, which is interpreted as follows:
“Product Market is a product that can satisfy that market.”
Airbnb even outperformed this definition by developing an idea that allowed you to simultaneously mix two markets in the hospitality industry – customers and vendors alike. When we use the term product/market fit in the context of mobile app development, it can be translated as the creation of an MVP (Minimum Valuable Product) that solves a problem or satisfies a need of a particular group.
Why am I talking about MVPs and not full-fledged products? A good product/market fit cannot be predetermined. It can emerge, develop or even disappear. That’s why it’s smarter to launch with an early version that can be developed faster, for a smaller budget, than a fully developed product.
Twitter is impressive considering its evolution/evolution. Twitter changed its strategy at least 7 times until you found a way to monetize your business. Today, you offer companies their APIs to learn about user behavior.
Another example is Instagram. Instagram did not have a clear monetization model until Facebook decided to implement an Indirect Advertising Strategy. If you google the term Product / Market, you will find lots of advice, among other things, that you should find a product that does not just serve a Niche. Our point of view is: the path is the destination and there is no defined destination. The first target group of Twitter was people who wanted to update their status if you had built your product just for this target group, had you missed bigger markets.
The idea is not worth anything, only the implementation of this creates value
Some startups want to collect funds for no more than an idea. Even if you have the most innovative idea in the history of humanity, chances are there’s someone who already had it before you.
When WordPress started there were already some blogs, but WordPress made it to the top. One success factor was that WordPress chose the right community. This community grew and relied more and more on WordPress as your source of income. And so the premium templates became increasingly popular, which turned out to be a reliable business model.
The only reason why StartUps exist is: To serve their users/ customers/users. A successful Mobile StartUp needs a good team, paying customers, a market opportunity, a good product (MVP) and a good business plan. All these points should be put together when the time is right to pitch the idea to investors. Even if you fulfill all these factors, you can not be sure from the beginning that you will be successful.
Andrew Mason’s first start-up was called The Point, only later did he form Groupon. The Point was a predecessor of Kickstarter and Indiegogo. Mason got his investment before the product was tested. Happiness? I would rather call this a miracle.
Mason’s team spent 10 months developing ThePoint, only to find that no one used ThePoint. Denoch helped him and his team change that direction and develop Croupon. StartUps must have the ability to adapt to new events over and over again. An MVP gives you the opportunity to get early feedback and respond to customer requests. That’s why you need an MVP to launch a successful app.
Build an MVP to test the assumptions:
The biggest challenge is to filter out the necessary features of unnecessary ones in order to clearly present the concept of the idea. People often hold on tight to the features you’ve planned to develop and which make it difficult to bring out the essence of the idea. If you think an MVP is a minimum of features, you’re wrong. It is for testing your idea, giving the world an application that is unique. We follow this approach as we help our customers design their MVP.
To develop the first version, Snapchat initially focused on its basic concept. They launched the app with the function that users could send pictures that were deleted automatically after some time. It was not until success proved you developed more features, in this case, filters. MVP’s vary depending on the idea.
Airbnb used the door to door approach. They attracted new customers and helped existing clients make their listing more attractive by visiting you and taking professional photos of the apartments.
If your MVP has passed the market test, it needs to be developed further. At this stage, some startups think about their monetization models. Still, the idea of earning money instead of leaving growth in the first place can be a fatality for early-stage start-ups. If Facebook had integrated an advertising model right from the start, it probably would never have reached its current status. They focused on user growth and data gathering, and it was only when they were a big network that you started targeting advertising.
Keep the growth rate high
One often sees a lack of determination to lead a startup to the end. And by the end, for example, an exit is meant here. Unless the company grows and scales, it’s not a startup. But even growth can be deceptive if the wrong values are used. We recommend the AARRR StartUp formula. AARRR stands for acquisition, activation, retention, revenue, and referral. But you should also find out for yourself what growth means for your business. Does it mean user growth? Increasing customer satisfaction? Higher profits? The development of your technology? or something else.
If you do not know what your MVP needs for your unique idea, or how to develop your app, contact the Applaunch.io team. We offer a free consultation and can be your team partner in development. We hope to land a groundbreaking success with you.
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