App Developer Melbourne

The 4 Characteristics of Successful App Startups

What are the shared traits of apps like Uber and Airbnb that help them become impactful multinational companies? The answer can vary depending on industry and business model. In this post we share the four most common characteristics of successful app startups.

Not since the dot-com days of the late 90s has there been such a prevalence of tech startups. The rise of mobile technology and innovations such as cloud computing has spurred this latest round of tech entrepreneurship.

As the mobile revolution becomes mainstream, new business opportunities are being presented. At Launchpad App Development, we help entrepreneurs and emerging businesses realise these opportunities through iPhone, Android and Web App Development.

Here are the important qualities to achieving app startup success in the evolving mobile marketplace.

They are disruptive

One of the defining characteristics of successful app startups is Disruption. A disruptive app challenges the status of an industry – transportation, retail, lifestyle, etc. – to such an extent that the traditional way of doing business becomes practically obsolete.

That’s easier said than done, and a lot more difficult than creating an app that follows consumer demand and market trends. So why are so many app startups aiming to innovate rather than regulate?

As the late Steve Jobs succinctly put it: “Innovation distinguishes between a leader and a follower.”

So is a disruptive app created?

Clayton Christensen – who introduced the disruptive innovation theory in the Harvard Business Review – notes that disruptive innovation often starts from the low-end market foothold.

Consider an industry where companies try to provide their most profitable and demanding customers with ever-improving products and services. In such an industry, these companies are paying less attention to less-demanding customers. This opens the door to disruptive apps to provide these low-end customers with a Minimum Viable Product.

Example – Uber

The taxi industry is tightly regulated and the drivers face strict obligations. In most cities, drivers need a special operator’s license in order to act as a taxi. Furthermore, there are restrictions to what cars they can legally drive.

In comparison to traditional taxis, Uber started in the low-end market by allowing anyone with a car to drive other people around for money. No special certification or knowledge was required.

As Uber’s network grew in each city, ride costs and waiting times declined and the rating system ensured that the driver quality was relatively consistent. With this improved service quality, Uber was able to move upstream to attack taxis directly – a classic disruptive move.

Uber Most Valuable Startup

Now worth $85 billion AUD, Uber is the World’s most valuable startup. Source: Statista

They have a well-defined Value Proposition

A value proposition is a statement that explains what benefits your app provides and how it does it uniquely well. It describes your target users, the problem your app solves, and why it’s distinctly better than the alternatives.

A significant part of defining a value proposition involves what Forbes writer Michael Skok calls the 4Us:

  • Unworkable: Does your app solve a broken business process where there are real, measurable consequences to inaction?
  • Unavoidable:  Is it driven by a fundamental requirement for accountability or compliance?
  • Urgent: Is it one of the top few priorities in the marketplace that your startup is entering?
  • Underserved: Is there a noticeable lack of valid solutions to the problem you’re looking to solve?

If you answered yes to these questions, then you’re on the right path toward a compelling value proposition.

Example – Evernote

Evernote’s value proposition is to “help the world remember everything, communicate effectively and get things done”. From saving ideas and thoughts to preserving experiences to working efficiently with others, Evernote’s distinct app offering makes it easy for users to stay productive and organised.

With a well-defined value proposition, you know that your target market is primed for the solution that your app provides.

They start with a small market

When it comes to successful app startups, there’s been a lot of talk about the huge market that’s readily available through the ever-evolving mobile platform.

While it’s true that a startup must eventually reach a large market to transform into a large company, it’s actually best to identify a narrow market segment to begin with.

As we covered in a previous post, starting with a small market helps you to understand the behavioural traits of app users in an insightful manner, while also underlining any issues that need to be rectified more quickly.

“Begin with a really small market, take over said market, and then expand that market in concentric circles.”

Peter Thiel, PayPal Co-Founder and early Facebook Investor.

 

Thiel advises in his lecture , “the greatest mistake you can make as a new startup is going after a giant market from the get-go. That signifies that you haven’t defined categories properly. And you’re going to be dealing with too much competition in one way or another.”

If you want to turn your app startup into a successful company, you should first capture targeted small markets and then help that market grow over time.

They provide an outstanding User Experience

By definition, a startup is a new company. They can’t be dependent on brand loyalty built over years or decades like their big, entrenched competitors can.

This is why providing a useful app product that’s simple and intuitive to use is so important to the business’s long-term success.

So how do you deliver a great user experience for the app that you’re building? Here are some guidelines to get you started.

  • Easy flow and navigation – Once you’ve decided on the first set of features you want to be part of the app, it’s essential that you make it easy for the user to navigate from screen to screen, or from one feature to another. Your aim should be to reduce the learning curve for the users and make navigation more intuitive.
  • Understand your customer What is the profile of your typical customer (E.g. Age group, gender, their behaviour with technology, etc.)? The navigational features (such as button size, easy tap instead of swipes) will differ from a 5 year old compared a 55-year-old mobile user.
  • Utilise the platform – Each platform, iOS or Android, offers various gesture-based navigation tools. Swipes (left, right, up or down) can bring a new screen and remove another, while a pinch can zoom into content or move out of the current screen as well. Depending on the nature of your application and its purpose, platform-specified gestures should be offered to provide an intuitive navigation experience.

App User Experience

The iPhone’s gesture-based navigation tools. Source: Business 2 Community

The User Experience your app offers should be an integral part of your product strategy. Remember, success is by design, not by chance.

Remember, success is by design, not by chance.

Concluding Thoughts

Whether your app idea will grow into a successful startup depends on a variety of factors. They have common characteristics that can be identified.

Successful app startups are disruptive, have a well-defined value proposition, start with a small market and provide an amazing user experience. Making sure that your app concept has these four traits will set you on the right path to achieving startup success.

What additional characteristics do you believe lead to app startup success? Let us know in the comments section below.