Your App IS a Business: Here’s Why

A lot of times I preach to my clients that building an app is like building a business. Here’s how a typical consultation begins:

“Hey, I have this awesome app idea and I’m going to partner with someone who’s good at making apps. We’re are going to become billionaires together in a few short years…”

Me: Silent head nod. No blinking. Pen taps the desk.

“So, what do you think? Can you help me? ”

I love their enthusiasm. But I get concerned that this won’t happen for them for one main reason:

Building an app is like building any business. I would even go as far to say that your app IS a business.

What I’m finding in my meetings with startups, entrepreneurs and small to medium sized businesses is that the business side of the app is missing. Let’s talk about how to fill in the blanks so your app is successful.

In essence, an app requires many things that a business needs.

This includes:

1) Marketing your app. Let’s look at the numbers: There are literally millions of apps on the market today. Android has 1.6 million apps available to users while Apple’s App Store comes in second with 1.5 million available apps. For every one app we know about, there are 100 more apps we’ve never heard of. This makes it difficult to stand out.

One of the main reasons apps fail is poor marketing. “Build it and they will come” is not a viable idea in the app world. Researching your target audience at the idea phase is critical. Too often, app builders put out the app without knowing if there is a demand in the marketplace. You must know who you’re marketing to, where they are and what attributes will make them want to buy your app. Fortunately, there are app companies that also offer marketing strategy and SEO services.

2) Sales. Getting customers to spend money on your app can be challenging—unless you’re a celebrity. In 2015, CEO of reported a total of 891,340 subscribers in the first 24 hours for the Kardashian apps (Kim, Kendall, Khloe, and Kylie combined). Facebook’s app ultimately ended up snagging the #1 spot for app purchases and downloads for 2015—not very surprising. But for the everyday business owner or entrepreneur, getting your app on people’s mobile devices requires a bit more work.

Fundraising for your app development is another fundamental step, since building and marketing the app will require monetary investment. You’ll need seed funding for coding, design, and backend services to get off the ground.

App Fundraising 101

For most newbies out there, knowing this is half the battle. The second half is coming up with a strategy to raise the money. If you have seed money saved (or a source of current revenue that can support your efforts), that is the most preferable option.

However, if you need outside funding, search for opportunities like app contests that may lighten your financial burden in the development phase. For example, Tepia Co held a contest in 2015 for creative non-technical startups to build the company’s app from start to finish. Another option is raising money on crowdfunding platforms. Crowdfunding is an alternate venture capital option that allows you to raise money from a large pool of donators or investors. There are many crowdfunding platforms to choose from out there, some of the most popular being KickStarter and Indiegogo. However, there are crowdfunding sites specifically structured for app startups. Here’s a list of crowdsourcing platforms for apps.

3) HR: Building a technology team. Some people sitting across from me during a consultation assume they can go at it alone. Visionaries tend to think this way. But you’re going to need help if this dream app of yours is going to work.

Reminder: An app is a technology tool, requiring technological expertise.

This expertise is a team effort. “All-Star” teams typically have several types of people: the Visionary (the innovative “big idea” person), Executioner (the person(s) who knows how to execute big ideas into technical action steps), the techie (can solve front-end and backend issues), and the marketer (someone who is a natural salesperson). Each type of team member has a specific function that makes every business work.

(Remember, your app IS a business).

Tech industry leaders emphasize the human element of team selection. As Bruna Pellicci, IT director at Ashurst law firm explains:

“IT is all about people. Who creates the computers and the applications? It’s people. And who makes use of those systems and services in the business? Once again, it’s people.”

Bottom line: Putting together a team in the early stages will set you up to win.

Suggested Reading: Where and how to find your Tech Team

4) Operation. Again, if you build it, it doesn’t automatically mean they will come—but it will have to be maintained. Sustainability is the name of the game. Once you build your app, it needs to be managed to ensure it is operating correctly.

A mistake many app creators make is thinking they can “set it and forget it”. Apps, like any viable business, don’t work that way. If you want to stay relevant, you have to make the necessary changes to meet the current market. For example, Facebook (like it or hate it) is constantly making changes to their site to remain competitive. Recently the company started offering video capabilities to compete with YouTube and sites like Vimeo. It’s been estimated that YouTube currently makes 18 million dollars a day. Facebook is smart enough to upgrade in order to get in on the action.

The same goes with your app. Apps require regular upgrades to remain relevant in the ever-changing tech market. A great app today can easily become a useless, glitchy, bug-ridden app tomorrow. Just like a new car that has to have parts replaced over time, codes for your app break down and have to be replaced. Sometimes the app is a flop and has to be scrapped and rebuilt from the ground up. It’s par for the course. Don’t be afraid to rebuild your app over and over again over the course of your business life.

Functionality vs. Design: Who wins?

After you have your Tech team in place, expect this dilemma: Functionality vs. Design. App makers have to contend with both a competitive marketplace and changing trends. The winner, according to users, is functionality. This means ongoing tech support, such as upkeeping source code, feature sets, and server maintenance. If you go into any app store for Android or Apple, you’ll see that the biggest customer complaints are app glitches or malfunctions.

My goal at the end of a consultation is not to bust anyone’s bubble—it’s to prepare them for what needs to be done for their app to be successful. Your app IS a business—run it like one.

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