Overrated startups – On the Hunt for the Unicorn

Overrated startups-On the hunt for the Unicorn

In recent months we have been experiencing an unexpected phenomenon in the startup world, which we would like to talk about, since it affects, in large part, the business and the development of Apps.

For several years, there has been a gold rush worldwide, in which some entrepreneurs, blinded by the rapid growth and market valuation of some well-known startups, try to repeat these successes, many times with more desire than knowledge and with the conviction that their great and unique idea will have a spectacular reception among investors.

My opinion, in this regard, after having worked with several hundred startups both in the UK and Spain, is that further from reality, the day-to-day of the entrepreneur, is rather the opposite. It’s hard. Very hard. Acquiring users is much more complex than it seems. Everyone loves your idea, but no one dares to “buy” it. Selling services to your users is even harder. Everyone loves it, but no one is able to pay a single euro to have it. Investors, if you have them, are not your guardian angel. They want your money… and multiplied by ten to be able, and in the shortest possible time. In the same way, developing and maintaining an online service or product with the necessary quality to satisfy this market is expensive and cannot (or should) be done by your brother-in-law’s cousin who is a computer scientist. It is therefore an almost “impossible” business in which approximately 80% fail, 15% survive and 5% succeed.

A few months ago, I participated in a debate, called “The App Bubble”, in which I defended that Apps, unlike dot-coms or startups, have not generated any kind of bubble. Apps are fundamentally tools at the service of companies and entrepreneurs, with the additional advantage that they can become a business in themselves, although they do not have to be the most common cases.

Moreover, according to our experience in Develapps, Apps that act as a service or support for a well-established business, usually have better acceptance and travel, than the Apps of “revolutionary ideas” or as we affectionately call them, the “illuminati”. We just have to do an exercise, open our mobile phone, see which Apps we have installed and which ones we use frequently. Surely most people, we use no more than 10-15 Apps and most come pre-installed on the phone.

All this theory, based on professional practice, only takes hold after seeing the latest news related to the world of startups. Famous and overrated startups aka “unicorns” like Mailbox, Carrousel, Parse.com they have announced their definitive closure. Purchases like WhatsApp by Facebook, seem to make no sense economically speaking, and leading companies like Twitter still do not know how to generate enough income. Other companies such as Uber, AirBNB, BlaBlaCar and in general collaborative economy startups, raise serious doubts about legality, or at least work in an allegorical way, depending on the country where they operate, and it is likely that many will not be able to continue their multimillion-dollar businesses in the near future, leaving great doubts along the way.

In short, what I want to explain with this is that Apps are not a passing fad. They’re here to stay. They are tools, nowadays essential. Of course, I predict that in a short time we will begin to see fewer Apps as a business in itself, and an increase in applications oriented to a more professional sector. The traditional company seems to be starting to give importance to Apps as a tool, especially for support, attracting and loyalty of its customers, understanding that this is a key part of its business, in which it is worth investing. In fact, sectors such as health, fintech and m-commerce or e-commerce through mobile devices are already emerging with great force.  It is in these areas, in which from our company, we have been specializing for years, with a large portfolio, having obtained awards and experience in a way that we hope the “unicorn” does not catch us by the horn.

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