Why Tech-Startups Are Focusing on Growth First and Revenue Later

Posted on Posted in Mobile Apps, White Papers

Why Tech-Startups Are Focusing on Growth First and Revenue Later

Would you like to know why most app developers fail when they get into the business? I will tell you. It is because they start to focus on revenue generation when they went into the business with the goal of making a great app first. That is why they fail.

They do not concentrate on getting users to like the app first and spread the fan base. That is the reason why you are warned to make sure that you do not fall into the same pit. Sometimes you will find that it is good to focus on revenue and sometimes, you just need a fan base first.

There are so many big apps that are focusing on growing before they can start to cash in. We will look at why they do this and why it may be the best idea.

  1. Pro-Growth First

One of the most influential Silicon Valley bloggers Chen said that “It’s very smart and rational to focus on getting millions of users first.” Focusing on revenue is what kills startups and that is why you need to make sure that you do not fall into this pit too.

Once you have millions of fans or a large portion of the market that you targeted, then you monetize the app and watch them buy. When you know that the people you have attracted will be around for a while, you can then monetize the app.

  1. Monetization Can Harm You

I daresay that even using ads to get revenue will make the app look less attractive and that is something that will make it harder for you to get what you need. There has been no case where there was growth because someone monetized their app.

That is the reason why you need to make sure that you have so many people who love the app that if some of them leave, you have a large number that will remain with you. If you get money from charging the users directly, you need to be tactful about how you do it.

You might think that the users will be willing to pay the price but you will be the one that will be paying the price if you are tactless about this.

  1. Free Apps Spread Faster

If you make an app that is great and ten you give it out for free, you will notice that there will be many people who will download it and then you will find that it gets so many reviews that are great. Use this kind of strategy because it will work.

You will be able to acquire the fans that you want and then you can start making the money that you want and that is how you do not phase yourself out with unnecessary revenue seeking behavior.

Offer the app for free first and then make sure that they have seen it and you will find that if they like it, it spreads more or less like a wildfire. That is what you need to do and achieve.

  1. Focus on Growth

There are so many ways to make sure that you can grow and they will include you having the courage to give it out for free first and then you wait for the fan base to accumulate. You can do this by making sure that there are updates that will make the app better.

There is so much that needs to be done before you can monetize the app and that is why you need to make sure that you have all the information that you can about the users before you charge them for it.

The users need to know that what you have is what they need and that is why you need to focus on the way that you can make them come to you. Think of the free-trials as bait and the updates that make it better every day as even better juice for the whole thing.

  1. Time It Right

Take the example of Instagram. They debuted at the right time and this was because the iPhone 4 was coming out then and the camera had been improved to be good enough that you could just point and shoot pictures that were high quality.

To date, they haven’t made a single dollar from this app but Facebook saw that they had the potential that was needed because they had a million users in about three months. Facebook paid $1 billion to buy Instagram because if the asset worth that they had.

If you do not time it right, you may sink into obscurity. Once people have used an app and they have deemed it unworthy, there is not much can be done to revive it.

  1. User First

As much as you want to benefit from this, you will need to make sure that you have put the user first and that is something that a lot of people do not realize to be important. There is so much that you will need to do to make sure that you have made the user base be huge.

The user experience is very important in getting the people that you are targeting to like the app that you are making. That is why you need to make sure that you have improved it regularly and that when you get an idea that will make an awesome update, you use it.

This one will need you to use a free-trial option too to make sure that the users that you have get to see what you have made and the awesomeness that is characteristic of it. The free trial app will have limited capabilities but enough to show that it is what they need.

There Are Multiple Ways to Do This

Basically, if you find a way to get the users to come to you first so that you can grow, you will find that there is no way for you to lose. Every other step is easy if you have the users for it.




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