Why 80% of apps do not generate enough money to support a standalone business

Average entrepreneurs who’re jumping into apps and mobile games thinking it as a “gold rush” are making many mistakes.

Long term success tips for entrepreneurs and thinking out of the “herd.”

Last time when I was at a startup conference there were many photo sharing startups hitting their pitches to angels. Some were looking for introductions to VC hoping to raise some money. And there were also few beautifully executed apps and web-apps.

Average entrepreneurs who’re jumping into apps and mobile games thinking it as a “gold rush” are making many mistakes.

In this article I’m going to show you 5 mistakes most people make and hopefully share a bit of my experience with you.

1. Knocking off other apps

A lot of guys clone and rip off apps thinking of making some quick cash. Now this is a byproduct of traditional biz op mentality and an example of ignorance of long term thinking. It is legally risky, plus apple has banned many developer accounts because of that.

Now definitely getting inspiration from someone else is a good thing and a lot of great apps have done that. But cloning and making something like Angry Pigs or stuff like that isn’t a great long term strategy.

2. Not Thinking About a Closing Strategy

I always suggest people that make your apps as sellable “businesses” instead of making them as sellable piece of code.

So think about your startup’s closing strategy. For example: are you looking for a sellout (Kevin Rose’s Oink) or you have a decent growth strategy about your current business model that you’re executing through your app. (airBnB)

3. Not Focusing on The “Jobs Design Principal”

This is a term I created just for the reference to the Steve Jobs’ famous quote about design – “Design is not just how it looks, but how it works.”

How your app does, what it does. The way it has been executed as an overall product, not just how it looks. It should not have clutter and must be as simple as possible.

I have seen some really “pretty” looking apps doing badly in terms of user engagement.

4. Poor Niche Research and Clarity

For long term success you need to make sure that it fits right inside the category and has a good growth potential.

At Zielix®, we have this startup and the product is a web-app that helps people manage their hires. All local, intra-company, outsourced and personal hires. It eliminates clutter, measures performance and manage all legal stuff and payments need to be done to the hires. One thing we focused before we even started the design process was the growth potential. Which was good.

I’m working on it as a growth hacker temporarily while the development finishes.

But if you have made an app that is like ummm Virtual Fan app (that’s a real app BTW) then you know that there is no growth potential for this one, right?

5. No App Launch Plan

I can say confidently that most apps and games do not have a “product launch plan” at all.

There was an app called “clear for iphone.”  This app had a really nice launch plan and very well executed and it crushed the charts reaching number 1, and then stayed n number 5 for a significant amount of time. Hawken, a new free to play game made by an LA based indie studio also has a really nice launch plan in place although it isn’t officially launched yet, but you can see the campaigns in action.

If you have an app that did not made the aforementioned 4 mistakes, then you MUST have a launch plan in place.

With all the app launches I have done for clients, one thing I make sure is that they do it at least 4 months before the launch week. Don’t be fooled by thinking it’s just a tiny launch thing you do when your app gets approved, there is probably a couple of months of planning and marketing campaigns put inside a system just for this week.

A lot of times big app studios with reputation partner up with YouTube partners with big following to run a giveaway on their channel or do a feature. I used to do this in bulk with Revision3 since it was easy. But now I have a completely different approach with direct dealings with channels.

So this is a just one promotional campaign in the whole system that you can engineer, which is to be executed during your prelaunch. But without at least 4 months of planning and contacting different people, it is not easy.

So there you go, here are the 5 mistakes most app publishers make.

I would love to see the discussion and answer some comments. Bring it on!


In the next article I will talk about building apps using third party data and APIs.

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  • http://www.ContractorRegistry.com/ Steve- Construction Contractor

    This makes sense. From the beginning, its important to determine if the app is an extension of the company (such as a website) or if it is built to generate revenue.