You came across this awesome idea for a mobile startup that you think will make people’s lives easier, and you can’t wait for it to develop into a tangible application that can generate value.
But it’s one thing if you’re developing a mobile app as a hobby, and another story entirely if you’re an entrepreneur planning on building a business.
The reality is, 50% of iOS and 64% of Android developers are operating below the “app poverty line” of $500 per app per month. The top 1.6% of developers takes home the majority of the app store revenue, while the remainder doesn’t make a dime.
So how can you make your product stand out in such a crowded market? Here are a few things you need to learn to do before you launch your mobile app startup.
Find a market for your mobile startup
There are three factors to consider when looking to build a sustainable product capable of generating revenue. They are the right timing, the right market, and the right place. In other words, you need to find a product/market fit to develop a mobile app startup.
According to the Business Model Canvas, product/market fit is a fixed combination of a business model’s value proposition (what distinguishes the product from its competitor), customer segment, relationship, and channel.
In the world of mobile startups, product/market fit translates as creating a Minimum Viable Product that solves a problem or addresses a need within a particular audience.
Good product/market fit is not a foregone conclusion. It can emerge, evolve, and sometimes disappear. That’s why it’s smarter to start with an early version, which can be developed much faster and with a smaller budget, than a full-fledged release.
Product/market fit is all about discovery, rather than certainty. It’s like playing roulette.
Another common piece of advice is to avoid creating a product that fills only a marginal niche, since most apps are oriented at mass markets. Had Twitter built out features to support their early audience exclusively, they would have missed out on much larger markets.
Adapt and evolve your business idea
Most startups want funding in exchange for nothing but a good idea. But ideas alone can’t create entrepreneurial success. Implementation is everything.
However innovative your idea is, it is very likely that somebody has already been the first to implement it. One of the reasons that WordPress stood out among other existing blogging sites was choosing the right community — a steady stream of people who began to rely upon WordPress as their primary source of income. This community gave rise to the “Premium Themes” idea, which became a viable business model.
A successful mobile app startup requires a great team, a great business plan, a great market opportunity and paying customers. These things should come before anything else, including the fundraising process, which can distract you from building a great product. Now let’s say all those factors happen to be working in your favor. Then the question is, how do you know you’ve found a winning combination from the start?
The truth is, you can’t.
Before creating Groupon, Andrew Mason had a startup called The Point, a crowdfunding website which quite miraculously received about $1M in funding even before the idea was implemented. His team spent 10 months building The Point, only to realize people weren’t using it. However, this experience led the team to shift their focus completely and create what eventually became Groupon.
Inability to adapt kills startups. To have an MVP will give you the opportunity to listen to your users, and as a result you will have a better idea of where your startup should go next.
Validate your business model with an MVP
Developing an MVP is not as simple as it sounds. When I interviewed Matthew Tandy about the MVP version of his time-tracking app that Yalantis helped him create, he said that the biggest challenge was paring down the features in order to showcase the core concept.
People get attached to the features they plan to develop, which makes it hard to identify the core idea of the app. An MVP is not minimum set of features. It is about testing your idea – whether you’re giving the world a function that’s unique and whether your business model is feasible.
In its early version, Snapchat outlined one particular focus. Only after the initial launch and product validation did it make sense for them to start working on more features and ideas.
MVPs come in different types.
Buffer put up a single page website that described what the product was about, and people who got interested could leave their emails. After that, they tested users’ willingness to pay for their still service by adding pricing plans to their landing page.
If you decide to create an MVP for a marketplace, you will need to do a lot of work manually.
Rent the Runway offered college students in person the chance to try on dresses before renting them. 34% of the girls walked away with dresses, validating their MVP. Airbnb used a door-to-door approach in New York. They recruited new users and helped existing ones improve their listings by visiting each of them personally.
Instacart started as an iOS app which allowed users to order groceries from a list, and for the first three or four months of the app’s existence, the founders of Instacart would pay visits to a Safeway supermarket to execute the orders themselves. They didn’t even have any drivers working for them.
Creating things and throwing them out there is not enough, you have to create what people want. Before you start thinking about how to monetize, experiment (and maybe fail), learn and improve.