WHY STARTUPS FAIL

The number of failed applications produced has gone significantly higher in the past decade due to massive technological boost in our planet. Which makes you wonder why app-based startups fail so often. According to an article in FastCompany, "Why Most Venture Backed Companies Fail," 75% of venture-backed startups fail.

There might be some basic underlying causes we need to look at before committing ourselves to invest in an app-based startup.

First Movers Advantage

The number of apps seeing the light of the day is overwhelming and users are always in a dilemma to know to what to choose from. So, knowing that the app you are investing in is actually solving a real-life problem is important. Which means, the app should be original and the first of its kind. Pathao has gained so much more popularity than other ride sharing apps because they identified the problem right when it was needed and capitalized on it before anyone else.

A well-formed diverse team

The company we are about to invest in should be unique as well. Its vital to notice whether the team/group of people working behind the scenes are a unique blend of creativity and analytical prowess. A well-balanced startup ecosystem can rule the world. People management is that one latent matter everyone should be well aware of while investing in a company. It is the same for an app-based startup as well.

User friendly interface

This is where we should stress the most. Whether the app is user friendly and usable in all android, iOS and other platforms or not is going to determine its longevity in the market. Most common people like me prefer an app which is simple and easy to use. The numbers support my hypothesis as well. According to an article in FastCompany,

75% prefer ease of usage, 74% thinks it should do exactly as it was promised and 57% prefer the design to be lucrative and visually appealing enough to maintain its retention rate.

Tracking the reviews

A smart investor does his research. So before taking such a big decision to invest, tracking the reviews of the app (if it has been commercially released for pre-testing i.e.) would be a good way to start the research. People are most of the time honest about their feelings about an app after they have used or downloaded it.

Beta Version of the App

And of course, pre-testing of an app by releasing the beta is as important as the app itself. A demo can tell you how long the app will run for and you can also monitor user feedbacks to adjust and tweak the app to your customers’ needs.

Understand the flow of supply and demand

This one is the most important but the most overlooked one as well. If your startup is meant for delivering a service to customers, then it must be fed for free initially. If not free, discount or promo codes won’t hurt the bank. The free money motivates users to use your apps as much as possible.

User retention rate shows the usage frequency of the app so it will be easy to find out the exact number of times the app is being used all over the globe.

When the demand goes up, the time is perfect for introducing in-app-purchase options. It’s similar to Tinder because they have a boosting option.

Thats all folks.