Business Overview

Has every app conceivable already been invented? Not at all. There are literally millions of apps that have yet to be created. Some have an obvious demand while some apps introduce new emerging ideas. Going into this business is very rewarding because it is getting easier to create software applications. Additionally, new users tend to multiply, which continues to create more demand for apps.

Who is this business right for?

Anyone who loves computer programming or general problem-solving would be great for this business. It helps if you have experience working on software development teams that produce popular applications before you try to go off on your own to start an application development company.

Software programmers often work very long hours without immediate reward, because solving the programming problem is the driver that pushes them forward. In this type of work, it is rare to have regular working hours, so you should be prepared to adopt a schedule that can adjust according to changing workloads.

What happens during a typical day at an app development company?

As a business owner of a software application company, you will need to be able to interface with clients (if doing work-for-hire) and manage the interface with the public if your programs are sold on an advertiser-supported model or on a subscription basis.

Your other main job is to manage the software development team. Your software development team may be on the edge of eccentricity and on the border between genius and insanity. This is normal for this business.

Your daily job is to create an amazing creative environment where other geeks will want to stay in and spend many days or maybe many weeks creating software code without much need for doing anything else.

Another part of your job is to keep the team heading in the best direction. Really intelligent people have a tendency to wander off into tangential thoughts that are not part of the project they are supposed to be working on. As the business owner, your job is to guide them towards producing positive and useful outcomes.

What is the target market?

If your business model includes creating apps for other companies, you will want to find companies who will give you a steady workflow to keep your software programmers busy and also pay you a fair price for the work.

If your business model includes selling the apps you create yourself, your customers will be as many people as you can possibly find in your target market. If the app has a lot of interest by the general public it will sell easily. On the other hand, if the app solves some critical problem for a niche market it will sell to a smaller group of people or companies, but at a higher price.

How does an app development company make money?

There are four business models for applications and various combinations of them, which are:

  1. Work For Hire - Getting paid to create applications for others.
  2. Advertiser Supported Free Apps - An app that is popular can earn revenues from associated advertisements.
  3. Free to try (or limited version) with Premium Paid Service - An entry level app is either a free trial for a specific time or a limited version. Those who pay for a premium version get enhanced features and can remove advertisements.
  4. Paid Apps – These apps charge for their use by timeframe, by the number of users, or by other means, such as a license fee. There are no free versions. These apps may be highly specialized and very valuable to those who pay for them.

What is the growth potential for an app development company?

Depending on your skills to make apps that attract attention and gain paying customers, you can start with a single successful app and build a business worth many billions. Software development is always about being new, innovative, and showing your paying customers ways to do things they never imagined before.

Any newly starting company has the same chance to create an industry disruption coming from their new ideas.