You know what it’s like when you get a new smart phone. Once you’ve got the phone connected to the cellular network and tried to figure things out without the manual, you start looking for the smart phone apps. You might download a few of the apps and even buy one or two that you think will be useful or provide entertainment.
Flip forward a few months and you have not used many of those apps and wish the ones that you had bought you could claim a refund for. Some smart phones do provide an app refund but you have to request within 15 minutes of paying for it. Others offer refunds but it’s a hassle to go through the rigmarole to claim back your money.
All over the world more and more apps are being developed by entrepreneurs. About 90% of them are free to download and most use the freemium model where the apps are free to download but if you want the advanced or additional features, you need to pay. Much experimentation is occurring in the app development space — and will continue as start up developers come up with new and better ideas.
Although many of these apps won’t make a cent, does it mean that these app developers shouldn’t have even tried? The thing is that it is only through experimentation that some app developers eventually hit the jackpot. Unless you know what you are doing, app development seems similar to a lottery.
But the point is that experimentation is important. What is a start-up? A start-up is really an experiment in search of a repeatable business model. That leads to the question of, well, if you are not getting return on your capital invested then what are you in it for?
A strict, severe requirement for return on investment for a start-up isn’t always the primary objective. Yes, it is vital for a start-up to have return on investment as a longer term objective but in the start-up phase there could be other motivations. Some people may want to make a difference – especially if they are starting up a social enterprise where they want to do good. Others may build a prototype of a small drone, for example, not because they see dollar signs but because they enjoy the challenge and find it fun to do.
Few brilliant ideas are going to make it through the start-up phase and become a viable business with a scalable business model. But where would you be sitting back and doing nothing? Trying to make it work through brilliant execution has much value. Your experiment could find a market demand and with luck become the next big thing.