Discover the Right Opportunity in the Marketplace
Before you can create a mobile app that makes money, you need to understand three different factors first. These factors include the proper timing, the proper place, and the proper market of the app’s release. If you want to create a mobile app startup business, you must choose the right market and product first.
When we talk about choosing the right market, this means that your iOS or Android app must be able to satisfy the demand within that market. A good example of a company which chose the right market is Airbnb. They did such a great job with their service app idea in the hospitality industry that they met the demands of two markets. They were able to help people who are looking for temporary lodging or rooms and they were able to help hotel managers and homeowners to find paying guests.
When creating a business model for your future app that makes money, you must determine if your product and its desired market are a suitable fit for each other. The elements which can determine this involve a combination of the customer segment, value proposition, channel, and relationship of the business model.
When you are developing a mobile app product and determining which market that it will fit into, you will be developing a Minimum Viable Product which satisfies your target audience’s demand or solves a particular problem of theirs.
Recommended Reading: What is MVP and how to build it right
If you look at the evolution of Twitter, it has gone through a minimum of 7 various markets throughout its existence. During this time, its concept changed a lot until it discovered an app monetization model which involved giving companies their mobile apps and APIs. That way, the behavior of the user could be tracked and discovered.
Instagram is a good example of this too. They were originally just a location-based service which had no app monetization strategy in their business model. But then, Facebook developed an advertising strategy which changed everything and made Instagram an app that makes money. A lot of money, actually. Businesses on Instagram could now create videos and then distribute them on their Facebook Fan Pages. They could also be distributed on Facebook newsfeeds as paid advertisements too. According to information provided by AdAge, Facebook will use Instagram hashtags to do a better job of targeting specific audiences with their ads. For example, if you were to go to your Instagram profile and publish a picture with the hashtag “#anodamobi,” your Facebook newsfeed could have the ANODA Mobile Development Agency advertisement in there.
If you try researching on Google about how to match the right product with the right market, most of the results will tell you to make a mobile application for a specific niche. There is an app called “Accent Kit” which is an example of a product created for the acting niche. However, it is hard to make an app that makes money with specific niches like this. Most money-making apps are meant for a wider range of people.
Basically, you will never be certain about matching a product with a market. You just need to discover the right product and audience for yourself. When Twitter first started, their main audience was people who wanted to update their status. They had no idea it would turn into a tool used by big businesses and high-profile individuals. Fortunately, the features they integrated into Twitter allowed for larger audiences to come and utilize this tool for themselves in a whole new way.
Implementation is More Important Than the Idea
Many app startups make the mistake of thinking that an idea of an app that makes money is enough to attract investors. Loan officers and venture investors want to see more than just a good app idea. They want to know that you will be able to bring it to life. More importantly, they’ll want to make sure that no one else has already implemented the idea in their business.
Recommended Reading: How to raise funds for your startup app
For instance, blogging websites had been around for a while before WordPress ever came around. But the thing that drove WordPress to become the number one blogging platform was its community. There were increasing numbers of people who became dependent on WordPress because it was the platform for their blog which generated a full-time income for them. This community of moneymaking bloggers allowed the idea of “Premium WordPress Themes and Plugins” to become another type of business model.
App startup needs to satisfy their users above anyone else. This means creating a great mobile application or service that users will enjoy. The problem is that startup business owners get too preoccupied with raising funds at the beginning of their venture. They don’t focus enough on making a fabulous product that is going to attract more users. If you want to build a successful mobile app that makes money, you need to first put together a skilled team. You should also have a detailed business plan and the right opportunity in the market to succeed. If you can do all this, then investors will be more likely to give you a loan to further develop your startup app.
It is always going to be rough at the beginning of creating an app. You may think you’ve created the right product and found the perfect market for it. However, you will never know for sure if you have until you see the results for yourself. Even the smartest startup entrepreneurs have made mistakes before.
Andrew Mason, who was the creator of Groupon, had previously created another startup named “The Point.” This was a social platform that was going to be like Indiegogo and Kickstarter where people could donate money towards a particular project or request. Mason was fortunate enough to raise $1 million from investors without even implementing his idea first. This was a very rare situation.
Over the next 10 months, Mason and his development team worked on “The Point.” Unfortunately, people simply were not using the platform and it ended up failing. But it wasn’t a total loss because Mason and his team now had an excuse to focus on another project. This would end up becoming the coupon startup website called Groupon. As we all know, this turned out to be a huge success.
If a startup cannot adapt and listen to their users, then it will never survive. An MVP will give you the chance to hear feedback from users. Then you can adapt to their demands and make a successful app which will satisfy them completely.
Creating a Minimal Viable Product
It is not easy to create an MVP app. One of the most difficult challenges that you will have is cutting away the features and just leaving the main concept. Developers love the features they are planning and do not want to part ways with them. This can make it difficult to pinpoint the main concept of an app. But just remember that a minimal viable product is all about testing out your main app idea. The features can always be added later if the testing phase proves to be successful.
Recommended Reading: Why building MVP is a good idea
Snapchat focused on their main concept during its early days. The MVP app they released let people send pictures which were only briefly visible to other people. After this first launch, additional features and ideas were implemented into the app.
Not all minimal viable products need to be the same. For example, developers with web-based startups may want to create landing pages. This could be just one webpage which outlines all the information about the product. You can even put a subscription button on the page so that people can submit their email addresses in order to receive future information from you. If you want to go even further than this on your landing page, include the various pricing plans that will be available too.
When you choose to develop a minimal viable product for the market, a great deal of manual work will be involved. There is an internet dress rental company called “Rent the Runway” which tried out its model offline before creating the core concept that would be used online. They did this by allowing students in college to try on their dresses. After that, the company asked these students if they would rent the dresses. Approximately 34% of the students chose to rent them. As a result, this validated the minimal viable product which Rent the Runway created.
Airbnb tried out their idea in New York by going to the doors of their users, whether they were new or current users. Airbnb thought if they could visit them in-person, they could help improve their listings. When Instacart first began, it was a mere iOS mobile app which had a list of groceries that users could order from. No retailers or stores existed for it at this point. During the first 4 months, Instacart’s founders physically went to the supermarket called Safeway to fulfill users’ orders. There were not even employing drivers either.
Effective App Monetization
Once your minimal viable product has been successful, you can proceed to develop it more. A lot of app startups will consider monetization models at this point. But don’t get too carried away with the idea of making money with your app because it will cloud your focus on growing the app during its early stages.
Just think what would have happened to Facebook if they started doing advertising in the beginning. Few people probably would have used their service if they had. Therefore, rather than focusing on making money in the beginning, Facebook gathered demographic information about their users and spent more money to create a strong platform. After this was all accomplished, they finally decided to start their advertising feature by showing highly-targeted advertisements.
Recommended Reading: 8 app monetization models for your mobile app
Based on Facebook’s success, this proves that your product and the people who are using the product need to be your primary focus. Your original revenue model is likely going to change as time goes on. Prior to the “My Day” countdown app being launched, the founders planned to make money from selling the pro version of the app. This would let people use it for unlimited events. Unfortunately, this idea failed for the founders of the app. So then, they decided to make it a totally free app so that they could work on improving it. Sure enough, users stuck with the app and then its number of users grew extensively. That was when the founders implemented their monetization features, such as in-app purchases and display ads.
Springpad was a former app startup that no longer exists. At one time, it was deemed a worthy competitor of Evernote. The design of the Springpad app made it an organizing tool for movies, interior design schemes, home improvement tasks, recipes, and more. This app was supposed to have an affiliate program for monetization, similar to Pinterest. For example, Amazon is a website which has an affiliate program. You could pin one of their products on Pinterest and the platform will edit the link by including its unique affiliate tracking code in there. That way, if one of your followers clicks on the post and buys the item on Amazon, a commission will be paid to Pinterest. There is a visual discovery tool on Pinterest that functions well with this strategy. As for Springpad, they could not achieve the same success as Pinterest. The year 2008 was when the startup first launched. This was prior to the rise in popularity of mobile apps.
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