Building and operating a successful mobile app is a badge in the world of business and technology. And to a certain extent, even in culture. The diversity of individuals venturing into the world of startups to solve a problem or address a need through a mobile app is at an all-time high. However, building a well functioning and aesthetically pleasing app is difficult. It requires a strong understanding of user experience needs, bug-free engineering and the acumen to operate the digital business. So, app entrepreneurs turn to mobile app development firms to turn their vision into reality. But, entrepreneurs don't want a gimmick or a toy that users throw out after downloading. They want a mobile app business. Here are three boxes to check to ensure your mobile app is a sound and scalable technology business:

1. Decide between linear or networked value.

What is the reason consumers keep coming back to your mobile app? What incentive does your app provide to increase utilization? In order to acquire super users your app must provide repeat value. And, that value needs to provide at least the same utility or satisfaction that it did the first time. For instance, the value that Uber and Airbnb delivers the first time is the same as the tenth time. Delivering consistent value is a requirement if your app is to succeed.

Let's dig a little deeper.

If you are building an app that features digital content, are you creating all the content yourself? Are you doing an integration into another site or using an API to tap into other existing content platforms? Remember, those integrations are expensive to engineer and you may not be approved by the provider. For instance, Instagram requires you to build a production ready app and then they will let you know if they accept your app to integrate into its API. That's a lot of up-front cost and risk.

Or, are you trying to build an app that aggregates and displays content from a network of creators? Think Instagram, Youtube, Twitch, Snapchat, Facebook, etc. Producers upload content to these platforms for consumers to engage with. Successfully cultivating a network of content producers can create a wealth of opportunity. However, this don't happen overnight. What are the incentives to compel these individuals to produce content? Welcome to the chicken & egg problem.

In short, platforms are the way to go. You shouldn't be creating the value you sell to consumers because you can only achieve so much as one person. Instead, you should create a platform that facilitates the exchange of value between producers and consumers. A local cab company can only make so much money, while Uber's network is a modern monopoly.

2. Pick one type of business model

If a networked model of value production sounds possible for your mobile app, you are probably trying to create a platform. Platforms are a new form of business model that only a small portion of the population is familiar with. That's good news for you! However, there is still a lot of challenges ahead.

If your business model is linear, make sure your supply chain can provide enough content to satisfy your consumers and achieve that desired repeat frequency. There is a good deal of background information about linear models on the internet as compared to that about platforms. Modern tech examples of a linear model would be a SaaS company like Salesforce. When Salesforce opened up API's and let 3rd party developers create apps for Salesforce's customers, they added a platform business model on top of their linear model.

You don't want to start out trying to do two different models. That said, a platform can use linear tactics to get going and hit an early point of critical mass. One of the chicken and egg strategies is to Act as a Producer. Amazon started out owning its inventory and storing it in its own databases at its own expense. If items didn't sell, they were kept on Amazon's balance sheet. Today, the majority of their margin comes from their marketplace model where sellers pay Amazon rent to store their goods in Amazon's warehouses to qualify for Amazon Prime, as well as pay a fee on every sale.

3. Make sound product design and development decisions

After figuring out your business model and strategies to hit critical mass, now it's time for you to start to figure out what app you need to build. The features and functionality that go into your MVP should tie directly back to your business model, core transaction and user acquisition approaches. Sometimes you may not be confident enough to dive right into product development, maybe you want to validate your business model assumptions further. There are plenty examples of successful platforms taking this approach. We call it Platform Modeling. Handy, the largest on-demand cleaning platform, started with a template website and a whiteboard according to Oisin Hanrahan, the CEO. So, you may not even need an app to get your business started and validated!

Published on: Apr 24, 2016