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5 typical mistakes made by SMEs

And how you can learn from them


From the series "the most common mistakes app newbies make", today it's the turn of SMEs. In contrast to start-ups, which often think about an app "from scratch" and

and "mobile first", SMEs often try to "digitalize" their existing business via an app. Here, too, I see recurring errors in thinking that need to be avoided.


A medium-sized entrepreneur


Here are my top 5 most common mistakes SMEs make when it comes to app development:


1. "We are now bringing our offer into an app."

In most cases, your portfolio cannot be transferred one-to-one to an app. And more importantly, it doesn't make sense. Instead, you should think about where the added value lies in using the app. Having an app because it's part of today's business is not a strategy, it wastes money and brings no value.


A good reason for an app is if you can satisfy a customer need that is context-sensitive, i.e. requires no planning but a quick solution. If I hear a song on the radio and want to know what it's called, I pull out my cell phone and "shazam". If I want to know how to get from A to B, I pull out my cell phone and look at Google Maps. If I'm bored on the train, I scroll through my social media feed or play some casual game. The same applies if I want to quickly organize an Uber, a pizza or a date, or if I want to check my account balance, my shares or my likes. All these events are context-sensitive and rather spontaneous. They don't require any planning and can be solved quickly and easily with an app. Analyze your customer journey and find use cases that are context-sensitive. Identify the most suitable ones and focus on them instead of trying to map your entire portfolio of offers in an app.


2. "The app project will be completed by the end of the year."

One of the most common mistakes made by SMEs is that an app project is budgeted and should be completed by a certain date. As a rule, this is not the case. On the one hand, because customer needs and technological possibilities change and you should react to them. On the other hand, because you have to "maintain" your app and publish regular updates to ensure that it works flawlessly. With app development, you are opening a construction site that will never be finished and will therefore incur ongoing costs. You should be aware of this before starting the project.


3. "I have a good idea. Please put it into practice."

Software development follows different rules than your analog business, where you can quickly make adjustments or spontaneously take a different direction. Spontaneous ideas dilute the core idea, delay the project and frustrate the development team. Get a good software architect and an experienced app business expert. These two will lay the foundations for your app and can evaluate the pros and cons of your ideas. Once the technical architecture and concept have been approved, you should not change the basic idea. To this end, development teams usually work in 2-week sprints in which they define sprint goals and then work through them in the best possible way. Rushing in here top-down only causes unrest and leads to the sprint goals not being achieved. It's better to collect ideas, discuss them, challenge them and then plan their implementation in the long term. Listen to your team.


4. "When the app is available, our existing customers will also use or buy our products/services/content via the app."

This won't happen on its own. Instead, you should invest at least as much time in a go-to-market plan, a sales strategy and in optimizing your engagement and retention metrics as you do in the app development itself. And yes, that costs money too. Many SMEs underestimate the importance of marketing and sales, don't budget for it and then launch an app that nobody uses. I often see business plans in which the costs for the app development are calculated as a lump sum, but customer acquisition costs do not appear or are so high-level that it is completely unclear how the app will reach its users. If you launch an app and don't plan a budget to market it, then the whole app project is of no use to you. Don't save money at the wrong end.


5. "We only launch the app when it's ready. Otherwise it will quickly be copied by others."

As the saying goes: "If you're not ashamed of your first launch, then you've launched too late." Think big and long-term, but start small and, above all, fast. Launch an MVP (minimal viable product) to get user feedback as early as possible, which you can use to improve your app. The longer you wait, the more expensive the whole project will be. In the end, pretty much any app can be copied - but your team, your experience and your ability to iterate quickly cannot. Go out quickly, identify "leaks" and learn from your mistakes. Instead of building a finished house where it then rains in. No one will want to copy it anyway.


Dear SMEs out there, I hope you take my recommendations to heart. If not, it's your own fault ;-)


Next time it's all about the corporates, the big players, the tankers among the companies. Yes, they also make mistakes and often burn a lot of money. Because they have it.


See you next week

Tom 


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