The Classic Mobile Growth Formula is Broken: App Store Challenges

The traditional 'build it and they will come' strategy for mobile app success is no longer effective. Getting traction in the app store has become much more challenging, and the classic growth formula has become obsolete.

• App store competition has increased drastically since 2010.
• Cost per install (CPI) has skyrocketed due to increased demand and limited supply.
• App store editorial teams are prioritizing established brands and platform goals over new developers.
• Investment in experimental consumer mobile apps has dwindled.

The Evolution of the App Store Landscape

The app store ecosystem has matured, leading to a significant shift in the dynamics of mobile app growth. The once-simple formula of building a great app and securing a feature has become ineffective, forcing app developers to adopt new strategies.

• Competition has intensified as the number of apps in major categories has exploded, meaning a new app must compete against established players and a vast pool of alternatives.
• The Cost Per Install (CPI) has increased drastically. Initially, buying an app install was inexpensive, but as demand surged, the supply of paid installs dwindled, driving up prices. This makes it cost-prohibitive for many app developers to rely on traditional acquisition tactics.
• Apple and Google's app store editorial teams are more focused on promoting established brands and apps that align with their strategic goals. This makes it difficult for new developers to gain visibility and attract users through featured placements.

The Shifting Investment Landscape

The investment landscape for consumer mobile apps has also changed. While investors remain optimistic about the overall mobile market, there's a reduced appetite for funding risky new consumer mobile startups. This shift reflects a sentiment that the initial "great consumer mobile experiment" has concluded, and investors are focusing on different areas, such as SaaS, hardware, and marketplaces.

App Store Competition

The sheer volume of apps in the app store has made it extremely difficult to stand out. In 2009-2010, a new app had less competition, making it easier to gain visibility and attract users. Today, however, the landscape is saturated with high-quality apps, forcing new developers to compete with established players with strong brand recognition.

Rising CPI

Cost per install (CPI) has become a significant obstacle for mobile app developers. While it was once relatively cheap to buy an app install, the increased competition and limited supply of paid installs have driven prices up. This makes it challenging for many developers to afford traditional acquisition tactics, such as paid advertising, incentivized installs, and other strategies that rely on buying users.

App Store Editorial Teams

App store editorial teams play a crucial role in promoting apps and driving visibility. However, their focus has shifted towards apps that meet their strategic goals, which often favor established brands over new developers. For instance, Apple prioritizes apps that offer amazing experiences and are from well-known brands, while Google prioritizes apps that are optimized for tablet devices and align with their Google+ platform.

Strategies for Success in the Changed App Store

Despite the challenges, the mobile app market remains a promising space. However, developers need to embrace new strategies to navigate the evolving landscape. Here are some essential considerations:

Focus on Product Differentiation

With so many apps competing for attention, differentiation is paramount. Developers must focus on creating unique and valuable experiences that solve user problems in innovative ways. This requires a deep understanding of user needs and a commitment to building a product that stands out from the competition.

Leverage Organic Growth Tactics

While paid acquisition tactics are still viable, organic growth strategies are crucial for long-term success. This includes building a strong community, fostering user engagement, and leveraging content marketing and social media to reach potential users organically.

Embrace Growth Hacking Strategies

Growth hacking involves using unconventional and creative approaches to achieve rapid growth. This could include leveraging referral programs, optimizing for virality, and finding unique ways to acquire new users through non-traditional channels.

Invest in Data and Analytics

Understanding user behavior is essential for optimizing app performance. By investing in data and analytics tools, developers can gain insights into user engagement, retention, and conversion rates, allowing them to make data-driven decisions that improve their app's success.

The Future of Mobile App Growth

The mobile app landscape is constantly evolving, and developers must adapt to remain competitive. By embracing new strategies, leveraging data, and focusing on user experience, developers can thrive in this dynamic market and achieve lasting success.