These days, everyone wants to create a mobile app and find internet riches in doing so. While some apps are free, others are sold on a freemium model, where they have limited features that expand when registering. Sometimes, revenue includes in-app purchases at various stages. And, there’s ad revenue too. It all gets quite difficult to figure out from a business standpoint.
In this article, we look at 3 considerations to make when you want to create and sell a mobile app.
Defining the Market
Is there a market for the app (or series of apps) that you wish to design and build?
Are there existing apps that mine this market that you believe it’s possible to beat? Or, are you aiming to create a whole new category with your app?
With the existing apps, how do they earn their revenue? Have any of the founders been interviewed and provided information that can be used to estimate revenue or market potential? Are there industry estimates that might be useful too?
Figuring Out the Profit Potential
When marketing anything online, it’s important to know where the money is going to come from. Many creators design things and don’t verify first if there’s a likely market for it. Others don’t have any idea how to reach their target market and hope customers will just magically appear.
When you’re selling on the web, you must know your profit margins. Use a profit margin calculator to do so, and it will help you look at the mobile app market from a business perspective by expressing costs first, your intended gross margin, then revenues and finally profit. It forces you to breakdown the sources of revenue and how they’ll be divided between ads, in-app purchases, premium app purchases and any other potential revenue sources.
Reaching the Target Market
App marketplaces are absolutely packed with apps. Some are excellent, and others, not so much!
Sometimes, it’s not the best designed or most useful apps that gain recognition and early adoption by thousands of users. Often, it’s the best marketed apps that gain a market share quickly even as other app developers scoff at how underdeveloped the code or features are.
To be successful in the app world, it’s necessary to become effective at marketing. If you’re a one-person studio, you must learn to be a marketer unless you have the money to outsource it. So, how will you market your app and get it in front of likely users?
If you don’t have a marketing budget, it’ll be necessary to become really creative, so it’s time to put your app marketing thinking cap on. Look at how other app companies got their start and raised their profile quickly. See if their approach is still valid and would work today with a little tweaking to call it your own.
Creating an app is not only about the code or the user interface. There’s so much more involved in producing a successful digital product and turning it into a viable ongoing business too.