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The killer app is not a business model

There is an enormous buzz out there at the moment regarding high-tech startups. There is also a particularly large proportion of these startups that focus on developing a ‘killer’ web or mobile application. The notion of the killer app is simple: Make something as successful in terms of user base as Facebook.

There is a real danger here, that people actually believe that such a thing becomes so successful due to an amazing technical ability or foresight into the psyche of a huge target audience. The reality is that chance has a huge part to play in such a venture becoming the next big thing.

The antidote to this kind of misplaced ambition (note I call it misplaced but the ambition itself is an admirable thing), I believe is to ground oneself in the basic principles of business if one hopes to make any money. And that means having a strong business model to follow. This means thinking about finding a reliable way to make money from your ‘product’ or service, before you begin to provide it.

This kind of back-to-basics business thinking is something the world economy could do with more of right now. I personally believe in the simple idea that money works when it is exchanged for a party providing another with a product or service which is as effective as possible proportional to the money spent on it. Unfortunately this only relates to a subset of all the business carried out in the world today: I’m going to shoot myself in the foot here and say – people invest too far in advance with uncertainty as to whether, as they love to say in the business world, the end result will add real value or not.

Put simply: an app needs a good business model to succeed monetarily, as does everything else.

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