How To Build A Profitable Startup
On the one hand, we can observe a growing number of free mobile apps that are flooding the market today. On the other hand, developers makes enormous profits putting millions of dollars in their pockets. How can that be possible? How do they make money and what is the average income of mobile app developers?
The latest statistic shows that the majority of startups are below the poverty line making less than $5,500 per month. However, the sum seems too good considering not a bad return after all. Those startups include 64% of Android developers and almost half of all iOS developers.
Only 1.6% of all companies appear to be a success taking home most of the global revenue from all mobile applications. Those of you, who still might think that the mobile market is something like an El Dorado, will be surprised to know that winning here is a tough challenge. A few startups can really take that challenge and survive in a tough competition. We have highlighted some useful tips and steps that will let you keep on the flow unless the app development is nothing more but a mundane hobby for you. If you are looking for some revenues, this article will certainly come in handy.
Step 1 – Searching for Market Opportunities
Every time you want to create a product that will eventually let you generate some cash, you need to consider three crucial factors. They are as follows:
- The right timing;
- The right marketplace or mobile platform;
- The right place.
In other words, you need to present your product at the right place and at the right time. Otherwise, you will fail considering a severe pressure by your main rivals in the niche.
We have an example of AirBnb application that actually hits two markets at the same time. The main reason of its success is the fact that it meets requirements of both users looking for accommodation and service providers searching for customers ready to pay for their services.
Many developers still underestimate the importance of the MVP version of a future product. Minimum Valuable Product is your chance to see if the application can meet the requirements of a target audience. Moreover, at this stage, you can still make any modifications and changes to suit the needs of your potential users. A lighter version does not require much investments and less time consuming if compared with the full version of the product. On the other hand, it reveals all possible weak sides of the app that can be strengthened any time.
Instagram is another great example of a profitable and free app. Many developers are still surprised with the fact how the app owners make enormous revenues. The secret is not a secret anymore. Launched by Facebook, indirect advertising strategy makes the major part of Instagram income. The strategy includes paid videos of the brand displayed via Instagram and then shared on the Facebook pages and profiles. There have been plenty of rumors that a popular social platform will go even further implementing some features of the targeted advertising that will be based on Instagram hashtags.
Some traditional monetization strategies are making a comeback with the growth of dating apps popularity as well as mobile gaming. In-app purchases and premium accounts may also generate enough revenue to compete with the biggest names in the niche when it comes to cash.
Step 2 – Find the Way to Implement Your Idea
Having a brilliant idea is certainly a must. However, it will never ensure 100% of success unless you find the way to implement it properly. Many startups are sure that people are ready to spend thousands of bucks for their amazing idea only. You are very wrong if you think that your idea will cost at least a cent. It worth nothing without a proper implementation. You should accept this hard truth. Otherwise, you will never gain success.
We have another good example of such award-winning implementation in the face of WordPress. It debuted when the competition in the niche was already rather tough with a growing number of other blogging sites. Nevertheless, WordPress found it possible to stand out from all of them. Choosing the right community was the key to its success. A growing community eventually resulted in Premium Themes for returning and new customers. This monetization strategy has turned the startup into a potentially strong business model.
Another obstacle on the way to high revenues is the fact that many developers have their backs against the wall when implementing monetization strategies. They interfere with the process of building or modifying the product in particular. We still should note that the main aim of every application is to serve users’ needs. Implementing an efficient monetization strategy requires much time and efforts in some cases. A few start uppers are ready to refuse from app efficiency in favor of higher profits. It may result in disagreements with investors if you have any. We should make an accent on the issue that app development has nothing in common with a hobby any time you want to make money from it. The key to success is to establish a winning combination of exceptional quality as well as some non-intrusive monetization options to bear fruit. This is where MVP will also come in handy. Once again, we are back to the Most Valuable Product version as the major part of the development and business planning process.
Step 3 – Test Your Assumptions Using MVP Version
Although MVP version seems to solve many problems before the application release, developing it may also be the most challenging part of the process. According to the latest surveys, paring all features to see the future concept of the project is the most complicated part. It may require the same amount of time and expertise as the developing process itself.
Some developers mistakenly think that the MVP version includes minimum features to present a lighter product. They are wrong. The entire MVP concept would be of no use if implementing only some part of all features you want to see in the app. The core functions are a must. However, you should also implement some extra options that can also influence the application pe4fromance as well as the way it may meet the target audience. If we are talking of a business app, MVP is the best bet if you want to show he functionality of the future product to your customers before the product is released.
Snapchat performed a good example of a wise MVP concept. It was focused on all major features and core functions. A lighter version of the award-winning app did not let users send visible images. The option was available only after a final version of the product was released. After Snapchat made its debut, developers continued working on extra features as well.
Step 4 –Choose The Type of MVP
Several types of MVP versions are available for developers today. It does not matter if you prefer using landing pages as a web-based startup or you opt for an MVP that can be used by your potential users within a marketplace, the idea is to not only show off its functionality but also gain some recognition and popularity. Some developers create a single-page web resource to tell as much about a future product as possible. You should never be afraid to snow your users under with details and reasons to opt for your product once it is released.
A door-to-door approach is rather popular among some biggest names like AirBnb. The idea is very simple. You can hire independent users who have never tried your product before or you can call at their places letting them use your MVP showcasing your eagerness to rise the popularity of the app by all means.
Step 5 – Choose an Effective Monetization Strategy
Creating a successful MVP does not guarantee future success. It may eventually call for further development including implementation of some available monetization strategies. If you will mainly focus on how to bear fruit, your product will be doomed to failure. And vice versa. The above-mentioned balance is always in the game.
Imagine Facebook implementing its existing advertising model from the very start. Do you really think it would gain the same success? Hardly! They opted for tools and modifications that let the social network grow larger and more efficient from users’ perspectives instead of business. Affiliates, in-app purchases, advertising and other monetization options can be implemented at every point of your app development. S, you need to create a decent product first that is worth paying money.
Keep an Eye on the Growth Rate
Some startups suffer from a lack of determination when it comes to application “exit”. You can consider yourself a startup only in case you observe a permanent growth no matter if it is rapid or not. Using the right metrics to determine the growth rate is vital. Using the wring metrics may lead to failure. Introduced by Dave McClure, AARRR metric model for startups is the best bet for novice developers with the lack of experience and determination. This model will let you keep an eye on some essential rates that include:
At the same time, it is you to determine aspects that will enable a rapid growth. You have to decide if you need to make an accent on technological issues, functionality or any other aspects of your product.
If you feel like being unable to cope with your MVP version, you can always opt for professional assistance delivered by professional development teams. We have a pool of dedicated professionals who will consider your every requirement and preference when building a Most Valuable Product. Contact our support specialists or place your order using form on the website.