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There is no such thing as an overnight success, especially not in the app business world. It takes hard work and a whole bunch of strategies just to bring a fraction of the market’s attention to your app; not to mention the time, money, and efforts it took to build the product.

The app industry is growing by the minute and another great idea could have just transformed into the real thing right at this moment. Sadly, not all ideas were given the time to blossom.

In fact, many innovative app ideas may have gone down the drain just because some app entrepreneurs didn’t have the clarity of direction to begin with and in the process sabotage its own growth. This is one of the many mistakes app entrepreneurs commit and had only been aware of it when it’s already too late. Here are other common mistakes app entrepreneurs make that are proven lethal to any app business:

1. Unclear Monetization Scheme

Free or paid? Includes in-app purchases or not? How will you gain profit from this app?

By the time you finish building your app, you need to start identifying how you will make money from it. Some newbies in the app market are so eager to jump into launch without having a clear understanding on different app monetization models and fail to determine which suits them best.

You need to identify head on the type of  monetization scheme that fits the current standing of your app and your company as an app builder. One best example of using a well-strategized monetization scheme is Rovio, the maker of Angry Birds. They are using a lot of methods that can help them get as much profit as possible without risking download rates. They have a paid download model, free advertising-supported versions, and include in-app purchases. They even have licensing which boosts their profit.

2. Poor Budget Planning

Efficient budget planning is crucial to any business. In the case of an app business, you need to see beyond development costs. This is where many aspiring app entrepreneurs fail. They think development cost is all that will take a big cut out of their budget pie and then end up not having enough to sustain marketing and growth later on the process.

There are primarily three basic categories where the budget for app business will fall:  (1) The cost of app development, maintenance, and upgrade; (2) Cost of setting up the business; and (3) cost of marketing. Since not all apps are created equal, so do the expenses necessary to run the business.

It is always best to understand the requirements for each of these categories and their equivalent cost, or you’ll end up not being able to sustain your business growth and fail.

Take the lesson learned the hard way by NYT best-seller Michael Hyatt in 1992. He miscalculated the money needed by his established company to sustain growth and ended up borrowing money. In the end, the borrowed bucks were not enough to keep up with the growth that it consumed all the capital and the business failed.

3. Faulty and Unstable Development Plan

Planning is the most important part of any business and failing to do it efficiently will cost a lot. After traveling around Asia in 2009, Pierre-Olivier Latour decided to build Everpix, an app that sorts and organizes photos. By 2012 they reached 55,000 users, and the following year, they were broke.

Everpix, accordingly was a great product, yet it failed because Latour and his partners failed to plan the business accordingly. They spent too much time on building the app that they ran out of money before they even reach the users. Also, they never had a marketing plan that totally sent the app down the drain.

4. Less Competent than Similar Apps

As of June 2016, there are 2.2 million apps available for Android users and 2 million in Apple’s App Store. These staggering statistics is expected to grow exponentially. And while downloads already surpassed the 200 billion mark to date, the competition remains stiff among similar apps, which raises the bar higher for app features in terms of quality and experience.

Building an app that is less competent than the others, even if free, can only expect to be buried underneath the pile of competent ones. App entrepreneurs may already know this, but they don’t know how to rise into the competition and ending up settling for a less competent app and then shoot in the dark.

Do your research, understand your user, and improve your app.

5. Undetermined Target Market Demographics

Sandi MacPherson, Editor-in-Chief of Quibb spent 6 months building a product and later on realized her failure: she doesn’t understand the market and the users, and ended up spending money creating a product that no one wanted.

This is one of the biggest pitfalls in app business. A smart app entrepreneur should have a comprehensive understanding of the people who will use his or her app. Without knowing who will use your app, you can’t expect to hit your goal downloads.

6. Ineffective Marketing Strategy

Marketing disasters are not uncommon. They are sometimes hilarious but they are never fun for business owners. This is why an effective marketing strategy is very important to make sure your apps will reach your target market’s mobile phones.

An Adobe Mobile Maturity Survey in 2015  revealed that 78% of companies used paid media to drive downloads. This shows how serious the competition is in the industry and that you need to take app marketing seriously.

7. Lack of Flexibility

With new apps introduced in the app market regularly, a shift in user preference is to be expected. Users’ demands are changing and they tend to quickly lose interest in one app when they stumbled into another. This is a harsh reality that app entrepreneurs face every day and lacking the flexibility to cope up with the changes can cause eventual failure.

Such is the story of “Yo”, a one-tap notification app that raked in millions of downloads in a matter of weeks. It ranked #1 in the US app store and was even sensational in the 2014 World Cup where a “Yo” was sent to users every time a goal was scored.

But since then, the app’s popularity plummeted. Users got tired of using an app that essentially does nothing and then moved on with new and exciting ones. The developers of the app failed to reinforce changes that have been obviously necessary at the onset of the app’s decline in popularity and eventually sent it down to #1277 from its #4 overall high.


While there is no “one-size fits all” solution to guarantee app business success, there are ways to avoid a surefire failure in the industry. Learn from the experiences of successful and unsuccessful app businesses and spare yours from a certain downfall.

One Comment

  • Lucas Bazemore says:

    Great Article!
    So then concerning point #2, What do you consider to be reasonable or good budget planning? What are the factors to consider for that? More specifically for the marketing budget as well?

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