This is intended to be a work in progress, aiming at a comprehensive itemization of the components and tasks in creating a five year business plan for mobile app development. This will involve more than one post.
It is necessary to draw attention to the Pareto Principle in that:
You can develop today, tomorrow, and forever — but without marketing, sales, and public relations, not to mention several aspects of business development, you will make little to no money.
From the outside looking in, the whole mobile app business can be confusing and leaves a lot of non-mobile oriented businesses out of the loop. Here, we will focus on bringing small business owners and other decision makers up to speed on the possibilities mobile apps offer for growing your business. For the most part, it is relevant for the full spectrum of small business, from restaurants to legal services.
Where nearly every product or service you offer has a price tag, a majority of mobile apps do not. Most mobile apps are available for free and make money through in-app purchases and/or advertising. The special point to observe is that almost every dollar generated by a mobile app from any revenue source accrues first to breaking even on development costs, and thereafter to its profitability. Many retailers purchase products at 40 -80% of their sale price, may incur shipping & handling charges, alongside other overhead expenses. You have a higher threshold to meet before your sales begins applying to your bottom line.
The second point to be aware of is that many independent developers are not breaking even on their development costs, but also a majority of developers are not very active in marketing their products. These points often go hand in hand.
Mobile advertising reaches more people dollar for dollar than virtually any other advertising method. Where your business may not be suited to having an app of its own, you might think, Why bother? This involves consideration of how your business reaches and attracts new customers – the effectiveness of your current marketing and advertising activities. This likely involves determining your target audience and selecting advertising venues capable of reaching it.
This is where the primary question comes in for you and your business,
Are there any apps or app developers out there trying to reach the same audience as you are?” Would you be willing to explore doing business with them?
This could take any number of forms. It could apply to helping finance or sponsoring an app or paying to run a coupon promotion through an app. The less your business requires customers to be local to you (i.e. an online store, subscription service, etc.) the better this can work for you. For more geo-centric business models, you may have to look at developers engaged in community-centric products. There are plenty of those out there.
Another component of this model involves expanding it to include several businesses related to the nature of a given app. In example, a strategy game might be useful in promoting a hobby store, a paint gun park, a similarly oriented book, ebook or movie, or even a web site. Suddenly, you can find your business developing networking relationships and promotional opportunities with multiple non-competing businesses.
The cost of advertising is the same regardless how many companies or products end up getting promoted by it. Within the mobile advertising market, it is most likely to be a mobile app that is the primary beneficiary of the advertisement. Once an app is downloaded and installed, each party participating with in-app promotions is reaching a customer in their target market. This also adds value to the app and increases the potential for it to be used more.
Take some time and talk to some local mobile app developers.
Following on the matter of non-developers with ideas for mobile apps, the focus today is on practical though somewhat abstract business considerations that should be useful to everyone.
Learn how to Bootstrap. To help you out, Seth Godin made The Bootstrapper’s Bible available for… Free.
Bootstrapping practically enables you to do anything you want even if you are starting with nothing. Time is money, but it has the worst “conversion rate” of any currency. It is probably necessary to change your way of thinking to get better value from your time. Information has a monetary value, ideas can also have value. With money, you can hire people to spend their time advancing your projects.
Time to Market. The biggest obstacle with any new idea is its time to market, which can be highly dependent upon available funding. Being first is not always best, Everquest was regarded by many as the first modern MMORPG and it took second seat to World of Warcraft. Both had huge amounts of money and resources behind them. While bootstrapping may get you to where you want to go, it will take far longer than having money and resources available from the get-go. This leads to…
Networking. Be social even if you really are a hermit. It is not what you know but who you know – and who knows you, and what they think about you that is most important to being able to move on an idea. While it may help to have connections in big companies, all big companies generally started as ideas and more often than not, as small companies. Social networking is not about what you might need or want now, it is all about what tomorrow might bring. It is something you should never stop doing until… maybe, when you get to retirement. To this end a networking strategy is important, but a topic for later.
Networking is your means to accelerating your time to market when you don’t have the money or materials or team.
Develop your Core. I’ve covered this before, suffice that it deserves emphasizing again. When you have friends who are competent business professionals in their own right, you have a talent pool for sharing knowledge, skills and sometimes, resources. Retired professionals are often happy to serve as a mentor because they tend to be financially established, have time to spare, and can appreciate the possibility of becoming a shareholder if and when your start-up leads to an IPO.
People – Time and Money. Everything about business concerns People first, and by extension, their Time which serves as the primary basis for measuring Money (rent, wages, etc.).
The more Time people invest in you or your idea, the more successful you are. Money, not so much – money can help you be successful, but only to the extent that it is used to bring more people to spend more time on what you have to offer. At least, what I want to emphasize is that money is a means, but not an end unto itself. It is VERY EASY to see how a lot of companies today have gotten this terribly confused, to the point they focus on making money at the direct expense of their own customers. Some institutions are getting the drift.
Process vs. Result – Perfect the process and you will consistently get good results. Focusing on results without care for the process is extremely hit and miss and leads to things like the global financial crisis. Not to ruffle feathers, but to emphasize further that People are the most important considerations where Processes are concerned. Helping others to do what they want to do or get to where they want to be is the time tested best way of getting to where you want to be and doing what you want to do – in business or life in general.
Measuring processes correlates to things like A/B and multivariate testing to see which of two or more screens yields a higher conversion rate. That’s probably going to tie in to making it more visually appealing or easier for the end user – the Person at the other end.
The thing about perfection is that it will never happen. That doesn’t mean you stop trying to realize it. Functionality, by the time you achieve whatever you thought “perfection to be”, your standards for perfection will have changed. If your standards don’t, odds are your customer’s standards will.
1% More. Or Better. Or Less Expensive. One percent of your day is about 15 minutes. You can do the math if you like. Apply that 15 minutes per day to your social networking, or another activity useful to your business or life. In 15 minutes you can easily introduce yourself to one more person on LinkedIn or write a short blog post. Even if you do it only on work days – that’s 260 new contacts or blog posts or discussion comments each year.
Consider the Pareto Principle – 20% of your efforts will produce 80% of your results. Looking at the second tier, (20% of 20%) 4% of your efforts may generate 64% of results. Further yet, (20% of 4%) .8% of your efforts may account for over 50% of your results.