Although we hate to start out on a sour note, it’s probably best to get the bad news out of the way. Most startups fail and that includes companies looking to develop apps. There are some figures that claim as many as 90% of startups will ultimately fail, and it doesn’t take a statistician to tell you that’s a whole lot. So why do so many app startups fail and more importantly, what can you do differently?

They Don’t Put The Time Into Finding Their Market Fit

We’re not just talking about failure when your app hits the app store, we’re talking about failure before you even make it online. As a startup, you need an audience, and the best audience is one that has a problem – a problem that you’re going to solve. Startups that fail pour money into acquiring customers before they have even determined exactly who those customers are. Overspending on PR and marketing is the fastest way to drain your funds with absolutely no promise of return.

This is the ‘Field of Dreams’ fallacy. Just because you build it, doesn’t mean they will come. Before you build, before you promote, you need to define your users, determine your market fit, and gather as much feedback as you possibly can. This isn’t a problem you can throw money at; you have to do the groundwork. If you’ve done your homework, however, you’ll have a product that you know customers want.

They Try To Build Their Business Faster Than They Can Afford

Premature scaling will empty your coffers as quick as anything else. What’s premature scaling? It’s when you’ve built and scaled your app before you’ve found your solution fit. You haven’t done your homework. You’re spending money on the future (advertising, customer acquisition) instead of putting your efforts toward validating your product.

Maybe you’ve even brought “experts” in too early. Now you’re already paying people. Now you’re worried about making money before you even have a product that can generate revenue. You’re going down fast. Make sure the market is there before you start to spend.

They Never Find a Scalable and Repeatable Business Model

This is the ultimate goal: acquiring users quickly and at a lower cost than the revenue that is being generated by those users. That’s the scalable. The repeatable is continuing to be able to get new users without over-increasing your cost.

You shouldn’t be getting into any heavy spending until you’re crystal clear about your business model. If you don’t, you be out of money before you know it. You’ll have nothing to show for it and if the numbers are correct, you be in good company with 90% of other startups.

We started with bad news, but here’s the good news. You don’t have to do this alone. You can bring in professionals that have launched successful apps. That’s what we do at Rootstrap. We prefer to hang with the elusive 10%, and we’d like for you to join us.

Photo Credit:

CEO and Co-founder of Neon Roots

Ben Lee is the co-founder and CEO of Neon Roots, a digital development agency with a mission to destroy the development model and rebuild it from the ground up. After a brief correspondence with Fidel Castro at age nine, Ben decided to start doing things his own way, going from busboy to club manager at a world-class nightclub before he turned 18. Since then, Ben has founded or taken a leading role in 5 businesses in everything from software development to food and entertainment.