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5 Situations When Building an App Is Just a Dead End Without a monetization strategy and business model, building an app is just a waste of your time and money.

By Rahul Varshneya

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


Not everyone needs to build an app. Yes, it's true even in the year 2016 when apps are part of our everyday lives. You don't want to invest your time or money if you know you're not going to see any returns.

And how do you know whether the you're going to see returns or not? There are a few ways to tell. If any or all of the following five conditions hold true in your case, you absolutely shouldn't invest in building a mobile app at this stage.

Try and turn these around and you're then set to start your journey as an appreneur.

Let's take a look at the five conditions when you shouldn't waste your time or your money in building an app.

1. When you can't track ROI.

This one's true mostly for existing businesses that are looking at building a mobile app as an extension or their existing product or service offering. Unless you have a strong, measurable ROI that you can track from building a mobile app, don't.

Where it doesn't make sense is when you're building an app to improve a certain process that isn't directly linked to a revenue generating activity internally in your company.

Related: Dream On: Here Are the Real Reasons You Should Build an App

Or in the context of a customer facing solution, it wouldn't make sense when you feel you can increase the engagement of your customer through a mobile app. The truth is, if you can't increase the engagement of your customer with your existing product, chances are, there's something wrong with the core product or offering itself. Don't invest your money in building an app just yet.

2. When you don't have a budget.

Don't build an app if you don't have sufficient budget. This one's relevant for all non-technical founders who don't have a technical co-founder to help build the initial version(s).

Don't compromise on the quality of the app because you have limited funds just so you can launch something in the market. If the experience is poor or your app is buggy or it doesn't match up to current usability or design standards, chances are it would be a total waste of money.

Users aren't forgiving. And when it comes to the mobile app ecosystem, even more so owing to the shorter attention spans. Build something you will be proud of, that users would be delighted by -- not because you want to be an appreneur.

3. When the frequency of use is limited.

Apps that do well are those that have a frequent touch point with their customers. If your mobile app is built to be used once a month, a quarter or a year, users are going to forget that it exists on their phone.

Related: 10 Reasons Not to Build a Mobile App

Either the app has to have a use case that compels the user to access it frequently -- at least once every week, or there's an event that occurs frequently that compels them to access the app frequently. In both of these cases, you've got an app that will stay at the top of the mind for the customer.

4. When you've not nailed a niche.

In his latest book, "From Impossible to Inevitable," Aaron Ross and Jason Lemkin write, "You can be a Fortune 100 company, or the greatest expert at organization design, or have a killer SaaS (software as a service) subscription model app for managing employees. But, if you can't predictably go out and generate leads and opportunities where you're needed, win them, and do it profitably, you're gonna struggle."

If you haven't nailed your niche, your target audience, you'll end up spending tons or money in marketing and not getting any returns and relevant feedback about your product.

Have your target audience defined down to absolute specific when you're launching your first version of the product -- first-year undergrad Harvard medical school female student who owns an iPad and drives their own car is nailing a niche as compared to "female college student."

5. When you don't have a monetization model.

Less than 1 percent of apps on the app store make any money. Is building a mobile app a hobby or do you want to build a business and generate wealth off it?

Every good business model has a defined plan to monetize the product based on the value you'd provide to the customer. Besides, it would also motivate you to delight your customer to get them to pay and have a great experience while using the app.

Related: 4 Reasons Your Startup Needs to Launch a Mobile App -- Now

While you may not actually monetize from day-one through your app, but at least have a monetization strategy or business model in mind before building the product.

Rahul Varshneya

Co-founder at Arkenea

Rahul Varshneya is the co-founder of Arkenea, an award-winning web and mobile app development agency.

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