The development of mobile technologies has led to the tremendous growth of the mobile apps market. As reported by Statista, the global mobile app revenue surpassed $365 billion in 2018. By the end of 2023, it will have reached about $935 billion.
With that in mind, it’s clear that the app market opens numerous business opportunities. As the global population almost equals the number of people owning a smartphone, you might start building your app at once.
However, building an app and launching a successful app startup are two completely different things. Read on to learn how to turn your app idea into a successful startup.
Identify the Market Gap
Every business starts with an idea, a concept that needs to offer something new to the market. It might share some characteristics with the existing options, but it has to bear a unique value proposition.
Start by conducting market research to identify the gaps in the mobile app market. Through the customer discovery process, you need to find out whether people would use the app you’re planning to build. When potential customers validate your idea as a unique solution to their existing problems and needs, you’re halfway there.
For instance, let’s say you’ve decided to launch a dropshipping app for spare car parts.
Define the age and demographic of your potential audience and have them interviewed. The agency you hire for this task needs to find out whether that audience would use such an app to buy spare car parts. If most interviewees give a positive answer, it means that you have potential customers out there.
Bonus: Find the right financial resourceÂ
A venture studio for startups is a great way to get the resources and business plan you need to grow your business. AI B2B venture studio for a startup has a team of experienced professionals who can help you from A to Z, from developing your business plan to marketing your product or service. In addition, AI B2B provides funding for startups, so you can get the resources you need to get started. AI B2B is a great choice for startups because it provides the resources and advice you need to succeed. If you’re looking for a way to get the resources and advice you need to grow your business, AI B2B is the right choice for you.
Choose the Development Route
When you get the market research results, it’s time to start developing the idea in greater detail. The crucial thing here is to decide what development route to take.
The first option is to start hiring all the experts you’re going to need to build the app and launch the business: app developers and designers, copywriters, marketing specialists, etc. You’ll also need app store optimization (ASO) specialists for both Google Store and Apple Store.
Gathering all these experts is a serious endeavor that requires a lot of investment. Most potential app startup owners don’t have enough money to go that way.
The other option is to work only with a core team of developers and create the minimum viable product (MVP). If we take the example above once again, this would be the initial, raw version of the spare car parts app. It needs to be functional enough only for the control group of users to try it and see how it works. When you get their feedback, you can move on to the more refined version and include various other professionals on the job. The most rational option here, finance-wise, is to work with freelancers and only hire full-time employees when the business starts making money.
Determine the Monetization Model
As you’re adding all the necessary visual details and improving the UX on your early app version, it’s time to decide how you’re going to generate revenue from the product.
There are three most common ways of making money for a mobile app startup:
- Completely paid apps. Even though a small portion of app companies opts for completely paid apps, it’s a legitimate option. In this case, no one can access the app unless they’ve paid the subscription. Typically, it’s not the best option for completely new startups because customers still don’t know the app and the brand. However, think about hiding exclusive features behind a paywall as you gain a pool of loyal customers.
- In-app purchases. The other option is to offer your app for free but include in-app purchases. For instance, the spare car parts app could allow users to search through items freely and order products to a certain threshold. For orders above that threshold, the customers would have to pay a subscription. Consider offering discounts for the semiannual and annual subscriptions as an incentive.
- Free apps with ads. In this case, the entire content within the app is free, but there are ads. During the test stage, think about offering customers who don’t want ads to pay a subscription. Check out whether your control group would pay to remove ads. If they don’t mind the ads, don’t offer that option.
Handle the Legal and Financial Matters
Before you officially launch your startup, you need to prepare your business for all the legal and financial matters.
For starters, choose the business type for your startup. As a sole proprietor, you’re personally in charge of everything out there. Your personal assets are the guarantee for your business assets. Think through whether this is a good option for your business. If you don’t like it, register as a limited liability company (LLC). In this case, your personal and business assets are legally separated. You pay yourself a salary for your work in the startup. Also, it’s easier to hire additional employees that way.
Moreover, analyze and track your financial documentation from day one. Bank statements, business accounts, balance sheets, and other reports are essential for responsible business management.
By keeping your app startup financial records in order, you’ll avoid getting lost in regulations or missing payments. To top it all off, keeping business papers in order is crucial if you decide to carry out an app valuation and sell the app later on. When the potential buyer sees that everything is in order and that you’ve been a diligent owner, they’ll buy your startup without hesitation.
Summing up
Building a mobile app and launching an app startup is not a cakewalk. You need to have a vision and a plan for implementing that vision.
That being said, there are app businesses out there that have made it. They built an app that resonated well with the target audience, and they found success. There’s no shortcut or magic wand that will take you there. Start with the tips and suggestions shared in this guide to find your way and build a successful app startup.
