Growth Challenges for an App Based Startup

Can you name a few successful businesses that are solely app based?

Well, for starters there are all the companies behind popular games such as Angry Birds or Pokémon Go. We know these companies are making millions. Now they even have dozens of other products, albeit similar to their flagship apps.

And then we have the likes of Instagram and Snapchat. Social apps that got so popular that giants like Facebook, Google, and Microsoft compete to acquire them. But it isn’t all about entertainment. Numerous utility apps witnessed groundbreaking growth in a short amount of time. All you need is an idea. However, the problem is that while every entrepreneur thinks that they have the next big idea, many challenges keep those ideas from going big.

If you too feel you have a winning app idea that can change the world, you need to be aware of common challenges that can compromise your dream. That is what we are here to discuss.


Challenge 1 – Finding Investors for Your Mobile App

If you want to create an app that can earn millions, you can’t do it without investment.

Even if you have the development skills, setting up an app-based startup isn’t inexpensive. There are many different expenses most entrepreneurs don’t realize in the beginning. The truth is, the more you invest, the more you get, provided that you are investing in the right things. From hiring the right resources to acquiring a customer, everything has a cost. And that cost may be higher than the capital you have.

Now, your idea may seem amazing to you but can you convince others? Sometimes when you come up with an out of the box idea, it is hard to make others believe in its potential. It is why acquiring funding for an app a startup isn’t easy.

The Solution:

You need to take a step by step approach to ensure successful funding. Start with bootstrapping in the initial stage. Once you see the probability of success with your minimal viable product (MVP), you can approach angel investors and seed funding entities with some solid data to show the potential.

Once the startup starts showing great potential for growth and success, you can begin seeking big funds from venture capitalists.


Challenge 2 – Technical Decisions

It is not common for a person unaware of the technical aspect of app development to come up with great app ideas. However, even when app startups are founded by developers, a number of technical challenges can impact the growth in the long run.

Two of the most crucial decisions in this regard include the language and the platform. You can go for iPhone App, Android App, both or a cross-platform one. There are a lot of differences in the ways apps are developed for all these frameworks.

Since Android and iPhone make up 85 percent of the market, it is best to go for a cross-platform app or both iPhone and Android. That said, for some apps, in-depth market research will give you a better idea of where your target audience is.

The Solution:

If you are outsourcing your mobile app development services, you need to make sure the team has the required expertise, and also interest and experience in the type of app you require.

However, for a business that plans to create an app that will be the main source of revenue, it makes more sense to hire in-house resources. A startup backed by a team of high-level resources is more likely to gain investors’ trust.


Challenge 3 – Creating an MVP

Growth strategy must be iterative. You can’t put it all out there at once and expect it to work. It can be overwhelming. When your app idea is groundbreaking, it is best to launch an MVP first. It is the version that has just enough amount of features to attract early adopters.

MVP requires minimum efforts and investment. It gives you a chance to test the waters, create a need, and even spark anticipation for the next version. Otherwise, we have seen plenty of examples of apps that were too ahead of their time.

The Solution:

Do not over-commit too early in the process. Don’t put all your money in an app before you are sure that there are users out there.

The challenge, however, is to understand how ‘minimal’ it should be. Experts usually like to say that it should be more ‘minimal’ than you initially assume. It should be enough to convey the main purpose of the app and also to assure you that people are actually interested in that app.


Challenge 4 – Monetization

You can’t have an app-based business without a proper app monetization strategy. It is one of the trickiest aspects of this business because most users are only in for freebies. And in all honesty, even the biggest apps such as Facebook had a hard time figuring out a proper monetization model and strategy for their app.

As an entrepreneur, it is important to know that the app is good enough to make people pay for it. Sometimes, introducing a paid feature can result in reduced app usage, and worse, abandonment. That is why many apps solely make money through in-app ads. Users can opt for an ad-free version for a certain cost.

The Solution:

Game apps are also easy to monetize. When a game gets too viral, you can add in-app purchases such as game currency or boosts. There are hundreds of examples of games that made a lot of money through these purchases.


Challenge 5 – User Acquisition Cost

You need a marketing plan to acquire more users. That is just one part of the challenge. The bigger challenge is the cost. The per-user acquisition cost is constantly on the rise.

Of course, there are ways to acquire users without a cost, but there is a limit to it.

The Solution:

If you are aiming for growth, you need to continuously work on the acquisition. You need to eliminate the abandonment and churn rate. Think beyond clicks; they aren’t the best metric to measure usage and acquisition.

This requires continuous optimization of your marketing campaign. You need to find ways to reach and acquire more users in the least possible cost.


Challenge 6 – Dealing with a Bad Launch

You had an amazing MVP response, and everything seemed positive. You launch the full-fledged app, and negative feedback starts flowing in. This happens more often than you can imagine.

Many factors can affect the launch. Your launch timing can be wrong. You launched too early before you had enough feedback, or maybe you waited too long. Maybe someone came up with a clone while you were working on that ‘one more’ feature.

The Solution:

Finding balance is a challenge. You need to make sure the app is launched exactly when it needed to be launched. More importantly, you need to be ready to tackle the consequences of any miscalculation in this regard.



These are the common challenges that can compromise the growth of an app-based startup. While this seems like a lot, the good part is that all these challenges are easy to handle. With the right people, a realistic mindset, and a flexible strategy, you can be the next million-dollar app startup.

Mehul Rajput

Mehul Rajput

Mehul Rajput is a CEO and co-founder of Mindinventory, a software development company that provide web and <a href="" rel="nofollow">mobile app