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Three Early Mistakes of App Startups

MVP
Product Strategy
French Bulldog in a space suit, holding up a smartphone with their app idea on it.

Launching an app startup can be an exciting and challenging experience. However, many app startups struggle to find success due to common mistakes that they make early on. In this article, we will discuss three common mistakes that app startups make and how to avoid them to increase your chances of success.

Taking large bites

If you’re building an app, it can be tempting to polish up the design and fill out its functionality before exposing it to users.

This approach carries risk. No matter how clever our ideas may seem to be, more often than not they do not quite match up with reality. The game we must play is to begin with a small bet, then iteratively discover a product’s true niche in the market…or pivot.

Building a Minimum Viable Product (MVP) acts as a vehicle to quickly deliver value to customers, gather data about how people engage with the product (or don’t), and evolve based on those learnings. This process, often referred to as build-measure-learn, will help you create a better product in the long run and avoid wasting time on features that no one wants or needs.

In fact, you don’t even have to build an app! For instance, you can just start with a landing page and subscription form. This is an example of a fast, cheap tactic to gather data and orient yourself before building anything.

Not enough market research

Look before you leap, as some say. It’s important to understand who your target audience is and what needs they have before you start building your app, even using a lightweight, iterative approach to product development. A couple of weeks of research can save months of build-measure-learn cycles.

There are a few different ways to do market research:

  • Look at existing apps in your space and see what features they offer and how popular they are.
  • Talk to potential users of your app and get their feedback on what they would want from such a product.
  • See how many people are searching for terms related to your app idea with tools like Google AdWords Keyword Planner.
  • Look at demographic data from sources like the US Census Bureau or Pew Research Center to get an idea of who your target audience is and where they live.
  • Use surveys or focus groups to get even more detailed feedback from potential users.

Doing market research will help you find a target market and make sure that you’re building something people actually want. It’s also a good way to come up with new ideas for features or ways to differentiate your app from the competition.

Lack of a monetization strategy

Another common mistake mobile app startups make is not starting with a monetization strategy in mind. 

Yes, you might get away with punting monetization until you’ve proven people are interested in your product. However, the risk here is that bolted-on monetization can feel like betrayal to loyal users, leading to churn and negative word-of-mouth. It can force you to significantly alter the design of the app to accommodate the monetization model—a design you’ve honed over many build-measure-learn cycles. Regular users are, by default, hostile towards those kinds of sudden changes.

There are many different ways you can consider monetizing your app:

  • In-app purchases: For virtual goods or premium features within your app.
  • Advertising: Advertising space within your app to third-party companies.
  • Subscriptions: Users pay on a monthly or yearly basis to use your app (think Netflix or Spotify).
  • Paywalls: Users are prevented from seeing the full versions of content unless they pay.
  • E-Commerce: Selling goods through your mobile apps (think Amazon).
  • Services: This can be anything from consulting services, appointment bookings, etc.
  • Selling user data: Just checking to see if you’re paying attention—don’t do this!
  • Data licensing: Aggregating a unique dataset (stripped of any user identifiers) is valuable for you as well as other businesses. You can expose an API and charge for access, or sell raw data feeds—AI startups are ravenous for training data. But seriously, be careful about user-specific data.
  • Affiliate marketing: You can include affiliate links in your mobile apps which earn commission whenever someone clicks on them and makes a purchase.
  • Sponsorships: You could approach companies who would like their brand name/logo displayed prominently in exchange for regular payments.
  • Crowdfunding: A less common option but one worth considering, especially if you have built up an engaged following already who believe in what you are doing. There are many platforms available such as Kickstarter, Indiegogo, and Patreon which enable individuals and businesses alike to solicit pledges towards causes, products, and services in return for rewards.

Conclusion

Building a successful mobile app requires focused, strategic thinking from the start. Doing market research will give you a head start in identifying potential customers, and it's a great way to come up with ways to make your app stand out. From there, use a rapid sequence of build-measure-learn cycles to hone in on product-market fit, or pivot away from a doomed idea before it drains all of your time and capital. Lastly, figure out how you will make money from your app early on!

James Sullivan
James Sullivan
January 11, 2023

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