When I hear how excited tech entrepreneurs, corporate marketers and corporate IT departments are about building and marketing mobile apps, I often wonder how rational their thinking is.
Is irrational exuberance in play here? Are many of us chasing the latest bright shiny object because it's the thing to do, even though our odds of succeeding are minimal?
And are we doing so at the expense of other things we could spend time and money on that would have a much higher ROI?
It's Like Those Pathetic American Idol Tryouts, Isn't It?
If you've ever watched American Idol, the once-very-popular singing competition, you'll remember those early tryouts they showed in which there is inevitably a highly delusional person who truly believes they've got singing talent but they're actually dreadful.
Despite their sincere (albeit insane) belief that they've got talent, they are crushed when Simon Cowell stomps on their bubble and says something like "If you had lived 2,000 years ago and sung like that, I think they would have stoned you."
How many mobile app developers are equally delusional? They expect that their app will be the "pop star" equivalent of the app world, but in fact, if Simon Cowell were to review their app, he might well respond with "There's as much chance of your mobile app getting any traction as me flying to the moon tomorrow morning for breakfast."
Against All Odds, Mobile App Developers Keep At It
Market research firm Comscore noted in a recent Mobile App Report that, in any given month, only about 35% of smartphone users are likely to download an app.
In other words, if you are marketing a mobile app, and you pick out any person at random, there is just a one-in-three chance that they'll download an app in the next thirty days.
Of course, the odds that they will download your app are much lower.
I think my math is right on this. If there's a 35% chance that I'll download an app in any given month, that equates to me -- and everyone -- downloading about 4 apps per year.
But most of us are only going to download the most popular apps, the ones that everybody else is downloading. The odds of us taking a flyer on your new, unknown and untested app are pretty small.
It's a Hits Business
Yet, we keep spewing out new apps, don't we?
As of July 2015, Android users could opt to download any of 1.6 million apps. Apple smartphone owners could choose from any of 1.5 million available apps.
Given 1.5 million or more apps to choose from, what are the odds that somebody will actually try your app? Not very high, sadly.
But wait, you might say. Isn't it the case that there have been more than 30 billion app downloads on these platforms? Doesn't that mean that the average app will get 20,000 users?
No. Averages are usually a useless statistic, and they are definitely useless in this case. I'd love to see a mobile app download histogram that shows every app and how many downloads it's gotten, but I don't believe it exists. Still, all the research says that the vast majority of downloads are for a very few highly popular apps (e.g., Facebook, Instagram, etc.). Everybody else just gets the leftover crumbs.
In effect, it's a hits business, like the movie industry. Is your mobile app going to bomb like Jupiter Ascending, which lost $172 million at the box office despite starring Channing Tatum and Mila Kunis? Or are you more like a Jurassic World, which has already grossed over $650 million?
What Mobile App Makers Should Be Thinking About
Long story short, this is a tough business.
Tech entrepreneurs who are developing mobile apps may think they are on the path to riches. But now-defunct GigaOm did the math and determined that most app developers will earn less than $500 per month.
That's around $3 per hour for your salary if work on your app full-time and by yourself. You'd be much better off working at the local McDonalds.
Same with corporate apps. You spend a boatload developing the app and talk it up to the organization as a big marketing and IT achievement. But, then nobody downloads it. Or they do, and then they never actually use it.
If the market is really this challenging -- if 65% of smartphone users are not downloading even one app ever month, as the Comscore stat suggests -- what's a mobile app marketer to do?
Go back to the basics. Don't build anything unless you've tested demand and determined that there really is a business case for creating your app. Then, user test as you build your app to see if what you are building is actually something that people will like and use. Fight irrational exuberance and make smart decisions based on facts.
While the odds are against you, you may yet succeed. Those who think "If I build it, they will come" are usually the first to fail. Do your homework, and slow down to move faster. If you play your cards right, you just might be one of the lucky few who make it big.
If you enjoyed this article, you can find plenty more like it on our site. We cover current news stories for entrepreneurs. In addition to breaking news for entrepreneurs, we also have tons of how-to articles that cover things like writing a business plan, buying advertising, selling a business and much more.