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Biggest Challenges Of Starting an App Development Company



App Development Company

Photo by Christina Morillo from Pexels

In the digital age, starting an app development company can be one of the business models with the greatest opportunity in terms of profit, equity value, and growth potential.

However, we are living in unprecedented times for all industries on a global level.

Standing out from the competition is more difficult than it ever was before. What’s more, if you don’t avoid key mistakes when building your app development company, you could end up wasting time, resources, and energy on a path that doesn’t meet your business objectives.

In this article, we will discuss various challenges you will encounter when looking to start your company. That way, you can leverage your team and vision to get the most out of your app development company in a way that boosts your bottom line.

Let’s get started:

Choosing Your Niche

The first step to starting a successful company is understanding exactly who your target audience will be. Far too many businesses overlook this process and assume that the clients will come to them if they just build a great team or product.

To help you in defining your niche, there are a few strategies you can look to.

The first one is using Google’s free Keyword Planner. This allows you to view the estimated search volume for certain key terms related to your app development company. Having this insight helps you to determine the right angle for marketing and the overall market demand.

The second way to choose your niche is to look at successful app companies that already have a customer base. You can spy on the competition by using their services and identifying weaknesses in their service — weaknesses that you can build on in your company to give you a decided advantage from the start.


The odds are that you will require some form of outside funding to get your company started. Experienced app developers are not cheap. This will be your largest expense, along with legal and organizational costs.

There are a few avenues to turn to when looking for your startup funding.

The first is traditional investors — or angel investors. These investors can bring their prior experience to the table, which could be more valuable than the money itself.

The second option is to accept smaller sums from a larger amount of people via crowdsourcing.

Hiring the Right Team

As an app development company, your success will depend on the kind of team you build around you. The first and most important hires will be your CTO (Chief Technology Officer) and your programmers.

It is often a good idea to “overpay” these positions. Eventually, you can even promote your initial programmers to higher roles to create and automate a workflow that less experienced programmers can execute (at a lower cost than senior developers).

Don’t cut corners on your team, as they are the lifeblood of any application business.

Fierce Competition

While you can reach customers from across the globe today, keep in mind that your competition can too. That means that one of the biggest challenges you will face is the industry itself.

Before starting your company, determine the level of competition in your space.

If there are multiple mid-late stage startups already generating revenue in that niche, you might be up against huge funding and market penetration challenges.

It may be best to choose a smaller market to start with.

Validation and Testing

Assuming that you have a great team together and you have done your initial market research, your work is still cut out for you. Now it’s time to put your hypotheses to the test by putting your service into the hands of customers and getting feedback.

If you don’t get much interest at first, it’s a sign that you need to pivot. And even if you achieve initial success, you should always be looking to improve your approach to increase your bottom line.

A good way to do this is to set pre-approved deadlines for reviewing your results. This could be every week, quarter, or even every year. The key is to look at your market and see if your offer is really aligning their core needs and the problems they are looking to solve.

Deciding on the Technology to Use

Technology is evolving faster than ever. Some decisions you make today could become outdated by next year. This is further complicated by the fact that there is no one-size-fits-all solution when technology is involved.

Whether you’ll use JavaScript, C++, Python, or one of the many other programming languages and frameworks will therefore depend on your ideal clientele and the purpose and goal of your app.

For instance, if you have an audience that is quick to adopt new devices and solutions, you’ll need to constantly stay on top of trends to provide an exceptional user experience.

Furthermore, if you plan an expansion to international markets, you’ll need to keep in mind whether your target audience prefers iOS or Android apps.

Making all the right decisions now might look like an impossible mission because you can’t predict the future in such detail as necessary.

Nevertheless, knowing the core requirements of your market and maintaining detailed audience profiles will help you steer your strategy in the right direction and help avoid some common mistakes that could eat up your resources further down the road.


If you are looking to start an app development company, you need to implement the right strategies and methods from the very beginning. Otherwise, you could end up spending your investors’ money or other budget resources and end up with a service that doesn’t appeal to your market.

Still, with the right approach, app development can be incredibly lucrative and create financial freedom for you and your entire team.

Review the tips above to make sure you are clear on your niche, funding, technology, and other key aspects.

By doing this, you can create a company that leverages your market’s needs and the powerful technology available today to create a consistent and successful long term business model.

Lisa Michaels is a freelance writer, editor, and a thriving content marketing consultant from Portland. Being self-employed, she does her best to stay on top of the current trends in business and tech. Feel free to connect with her on Twitter @LisaBMichaels.

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