Starting a business in today’s competitive environment begins with a Minimum Viable Product (MVP). This scaled-down version of your business tests the waters. Then, you can have your business model, pricing, and target users figured out. Then, you scale up with that. However, not all start-ups’ MVPs are created equal. The decision of how far to invest in technologies and leveraging digital channels is a crucial one. This is especially true for those who focus on digital products or MVPs.
To establish a secure and lucrative future for your business, you must carefully consider investing resources in embracing the digital strategy. Why do you need to consider this from the outset? It will enable your business to:
- better engage audiences,
- boost operational efficiency,
- speed up time-to-market for your products and services, and
- facilitate innovative efforts.
Here are some numbers to highlight the speed with which companies embrace digital transformation. The experts believe investment in it will rise up to 2.6 trillion dollars by 2025 and 3.4 trillion dollars by 2026. 0.8 trillion dollars per year! Businesses make this kind of investment for the returns it brings. In this blog post, we will share 10 signs you should join this digital transformation and invest in custom MVP app development.
Table of contents
- Sign 1 – Recognizing MVP App Development Signs in Consumer Culture Reigned With Video
- Sign 2 – Targeting the Digital Native Generation: Key to MVP App Development Signs
- Sign 3 – Utilizing Consumers’ Mobile Dependency as a Path to Purchase
- Sign 4 – Accelerated Time-to-Market: Critical MVP App Development Signs
- Sign 5 – Digital Savvy Leadership: Noteworthy MVP App Development Signs
- Sign 6 – Integrating IoT technologies and automation: Sizeable MVP App Development Signs
- Sign 8 – Digital Consumption Dominance
- Sign 9 – Covid Impact on Digital Acceleration
- Sign 10 – Diverse Digital Channels for Securing the Market Niche
- Frequently Asked Questions (FAQ)
Sign 1 – Recognizing MVP App Development Signs in Consumer Culture Reigned With Video
It is essential to get discovered when starting a business. You need potential customers, partners, and stakeholders to find you and know you. 50.3% of the world’s population go online to watch videos. It is not the number one reason to go online. Yet, it is the first and main one that provides a unique opportunity to captivate viewers with something new. It will happen without them feeling bombarded or interrupted. And today, an average person watches videos online for 1 hour 40 minutes a day in 2022!
So, what is video good for?
- Video creates a receptive environment for discovering new products or services. These days, some viewers even complain that they miss advertising breaks compared to the TV era!
- In-video advertisement isn’t the only way. There are multiple avenues of advertising through the video. Even more sales come from strategic product placement in the videos.
- If you need to sell anything complex or innovative, explaining it through the video is the best way. Consumers, potential partners, and other interested parties can be easily sold on an idea via visual material. And video reigns the visual category now.
- Moreover, video content engages consumers like no other type of content online. So when you think about your new business, how important is engagement? It is vital.
Being able to utilize video in the most efficient way is in tune with custom MVP app development. Traditionally, custom MVP development creates a groundwork for efficient and tailored video content. After all, you dive into understanding the pain points and preferences of your audience. In addition, custom MVP is all about iterating and learning the best ways to showcase your business. Custom MVPs are synonymous with compelling videos.
Video as a digital product
Video can become a digital product on its own. Let’s imagine opening up a regular brick-and-mortar culinary school or an art studio or whatnot.
- It wouldn’t be easy to promote it.
- It is quite a task to assemble a group of 5-10-15 people to come at one time to your location.
- It is limiting in terms of profit.
Compare it with recording a video course and maybe having a chat for Q&A.
- The course can be sold 24/7.
- An unlimited number of people can purchase it.
- You don’t need to pay rent unless it is for the recording.
No wonder online courses are the most profitable digital product there is. Sure, you can buy courses for less than 20$ on Udemy, for example. However, most course makers start at least at 99$.
Video course platforms can make more money by charging subscription fees. Subscription overall is a very profitable pricing model at present. And the path for video as a digital product business is clear. Start by releasing one course at a one-time price. As you record more courses, create a platform, launch a subscription, and add new videos to existing courses as you go.
Connected entertainment and services
People are open to advertising when they have fun. The video boom boosted growth in other connected areas: gaming, music video streaming, educational video content, and more. More video content triggered the need to improve the internet speed. The improvement isn’t insignificant. The year-on-year change for mobile is +40.6% and fixed internet connection is +33.7% improvement in speed of Internet connection.
The combined effect led to digital innovation in educational, healthcare, and financial services. Telehealth services and telemedicine were made possible. Financial services are often complicated, which is where video steps in to make things easily understood. Financial apps offer real-time online consultations. They make dealing with complex and sensitive issues increasingly easy and stress-free.
Sign 2 – Targeting the Digital Native Generation: Key to MVP App Development Signs
While it may come across as a humorous fact, this fact is undeniable and undisputable today: the new generation of consumers is born and bred online. The new cohort of consumers is inherently native to the digital landscape. Most of today’s students haven’t ever sent a regular letter or written with a pen unless forced. They write notes using a comment feature and highlight with their fingers moving across the screen. They are tech-savvy by default and their world is the world of clicks, swipes, and instant connectivity. This generation is growing up to be the primary target audience as they start working, making money, and experiencing growing needs.
If you plan to get leads and drive your revenues with this cohort, you need to have a digital presence. The custom MVP app development would be the most optimal way to grab their attention and engage with them. After all, they would not be impressed with templated standard functionality and regular UX. So if your plan is to have a prosperous business in 5-10 years, you should be approaching this audience and making your business recognized. It stands as one of the most compelling custom MVP app development signs.
Sign 3 – Utilizing Consumers’ Mobile Dependency as a Path to Purchase
What is one single action that 80% of people do in the first 10 waking minutes of the day? Yep, they check their mobile phones. 62% of those actually sleep with their phones. This trend is growing. This trend is one of the reasons mobile app development is growing. Most of the e-commerce giants have released mobile apps for shopping. An optimized mobile app or a responsive mobile-friendly website is a power tool for selling online.
If you haven’t thought about custom mobile app development, check out this article to see the variety of options available for you. There, you can also see the range of businesses that are going mobile.
It is quite possible these days to set up a smooth customer journey leading straight to the target action – purchase. In addition, shoppable posts and social commerce are two big trends revolutionizing selling online.
Amazon’s e-commerce sales in 2022 were $514 billion (which is $514,000,000,000). Is there an offline shop that can boast such a number? Ok, Walmart US stores generated in-store sales of $393.3 billion. It is 75% of Amazon’s number. But consider that Walmart sells mainly groceries, has 4,743 stores, and keeps 2,300,000 employees. In contrast, Amazon didn’t start selling from necessity goods like Walmart. Plus, Amazon has 1 million fewer employees. In terms of stores, Amazon has only 22 Amazon Go in the US.
Sure, it is hard to find a big company that does only online or only offline these days. For instance, Amazon chose to run stores to support its online sales growth. Conversely, Walmart launched its very own successful marketplace to not be left behind. Overall, online+offline create the synergy for even bigger growth.
Online VS Offline
So, if you ask what to open first – online or offline business these days, we shall transition to the next point for consideration: Time-to-Market. But, going online first makes more sense.
Sign 4 – Accelerated Time-to-Market: Critical MVP App Development Signs
Time-to-market is a term that describes how much time it takes to go from having an idea to getting with product to market. Nowadays, things are running at lightning speeds, so timelines for joining the competition get narrower. The window of opportunity is closing pretty fast. With digital products, even a 6-month delay may result in a different company getting there first and grabbing your customers.
To indicate how much more efficient an online digital product is compared to an offline one, let’s consider a hypothetical scenario. Imagine, you’d like to open a specialty shop selling hand-made bath products. You have a limited budget and time is of the essence. How will that go in both scenarios? A detailed plan is outlined in the table below. Overall, the offline option will take up to a year longer and cost you up to 90% more money. So, custom MVP app development opens up an opportunity to bring down Time-to-Market as well as do that for just a fraction of the costs.
Of course, all numbers are average because prices depend on location. Sales depend on the efficiency of marketing efforts and so on. However, you see that Time-to-Market is twice as short for online stores compared to offline. In addition, it takes less initial investment and lower monthly upkeep. Furthermore, if you want to expand your product line considerably, you don’t need to spend time on finding a bigger store and relocating. So, it brings down Timeto-Market for all follow-up new product introductions. Along with time-to-market, online businesses have shorter timelines for reaching break-even points, initial sales ramp-up, and more.
Sign 5 – Digital Savvy Leadership: Noteworthy MVP App Development Signs
Recent statistics reveal that companies led by tech-savvy management significantly outperform those who aren’t. To be exact, by 48% in revenues and valuation. What do they do differently? They see the success of their business in the light of current digital technology. They equate the use of technology with:
– achieving better results,
– improving productivity, and
– generating new business.
Interestingly though, the same research indicates that only 7% out of all companies are led by digital-savvy leadership. This gap gives an opportunity. Opting for new technological solutions as a strategic move can be a competitive advantage for your business. Startups and more mature businesses know that a way of doing business that isn’t saturated with competition is golden. When you join 7% of leadership, you stand a fighting chance of producing qualitatively different results.
With custom MVP app development, you can integrate technological tools into your digital product from the get-go. You can also tweak and fine-tune whatever you need. This ensures that your business gets the technological edge where you want it.
What is so special about technological savvy? What’s the difference?
As an example, a simple decision to get a CRM system can mean a world of difference. With leadership being not into technology, the impulse for such change must come from employees. This usually means an overworked employee who has been doing it all manually and had enough. Then this person would quit. Their manager would struggle to find a new hire. And then in desperation this poor manager would hectically start looking for a different way to solve this. That’s when a discovery of CRM would seem like a light at the end of the tunnel. But then this manager would need to sell the idea to the top management. It would also take some time and energy. Why mention energy? Because instead of focusing on finding new ways to attract more customers, the energy is wasted on ‘saving the day’.
This kind of example is unfortunately an all too common practice for many companies. It might not be a CRM system, but it can easily be something else. For example, a decision to automate emails. Or sync up all the social media channels to gather data in one convenient way. Then, display the data in a dashboard view of all marketing channels.
Targeted thought-out marketing vs. old ways marketing are very different in terms of technological implementation. Consequently, they produce very different results. A regular example is SM posts. Rarely, you can hit the target with one post. Often, your SM manager will rewrite and report one post 5-7 times based on the audience’s reactions. So, it means that this employee monitors the reactions at some intervals. Imagine, this employee manages several SM networks with a few different posts for your company. How fast can that person catch the indicator for rewriting? Will they be able to track this efficiently for all posts? This is not humanly possible. This can be technologically enabled though.
The examples exist in abundance where a technological solution wins. It wins by saving your employees time for which you pay. It wins by freeing up employee energy for better use. And, providing synced-up data can often bring in invaluable insights. Those can lead to handsomely paying off business moves.
Sign 6 – Integrating IoT technologies and automation: Sizeable MVP App Development Signs
Whenever the words “operational efficiency” and “real-time data” come to your mind, think IoT. As an example, let’s consider a platform that sells personalized fitness trackers and accessories.
- Whenever you start a business, you know it has to offer something unique and personalized. So, IoT can simply be your USP – smart fitness trackers with personalized recommendations based on users’ data. That’s impossible without an IoT.
- Then automated warehouse management system can be placed in your warehouse. Even if during the ramp-up stage you can do without it, you have to have a custom MVP that will be able to include it later down the road. As soon as you have popular products and expanded inventory, you want to make sure you don’t have stockouts or overstocking.
- With a growing number of customers, IoT can be utilized for customer engagement, personalized recommendations, and customer support.
- With IoT technologies embedded into your custom MVP app, you enjoy the benefits of reliable computerized robustness. You remove inefficiencies.
It is very easy to prove that businesses underutilize this technology. It is so common when last-minute orders get canceled the next morning. Why? Because the employee who was supposed to mark the order for sending had the end of the work day. The order was left hanging overnight. The customer got anxious and felt ignored. Then, the customer canceled this order. Especially, if it is a big one. Sometimes customer cancels because they placed a huge order and the next day, an employee calls up to say that several items are out of stock. Sure, the employee is polite and offers replacements. But the customer gets discouraged, upset, and cancels.
The lesson is simple: with small simple orders, businesses deal just great and they don’t need technologies. It is when the numbers go big, the losses start pressing and taking business down.
To explain the role of automation in that, consider the following questions:
- Once the order comes in, do you have to manually check the payment? Or is it done automatically?
- Do you then transfer this information to the warehouse? Or does it get passed automatically?
- When you inform the client about a package being sent out, do you wait for a call from the warehouse? Or does the message get sent automatically?
Any time you have to pass the data from one system to another, check for updates manually – it is wasted time. In addition, these processes are prone to human error.
What are the numbers on that?
IoT and automation are great but they look like expensive technologies while you can probably find employees for just a fraction of that cost. Well, 63% of businesses who invested in IoT indicate the payoff in three years’ time. After that, it is only benefiting your business. So, in general, if you plan to run a business for longer than 3 years, IoT is worth a shot.
As for automation, 85% of businesses already recognize that automation frees up the human potential for focusing on achieving strategic goals. 78% of businesses appreciate automation for the increases in productivity. 73% of business leaders agree that a significant portion of their savings was achieved due to automation. For some 15%, the decision to integrate automation has led above all to a boost in their revenues.
To include these technologies in your digital product, you should better invest in custom MVP app development. It will make sure that everything is integrated to your convenience and efficiency.
Sign 7 – Embracing the Digital To Bring Profits: Lucrative MVP App Development Signs
The general curve of profits across the product cycle is always the same:
- at the start, the profits are slim – initial ramp up/initial traction,
- as the business grows, profits shoot up,
- Mature business experiences a peak in profits, and
- in the latter stage, profits dwindle down to indicate the need for product overhaul and expansion to new markets.
After the introduction stage, the revenue growth for non-digital businesses compared to digital businesses is very different. The data informs that digital business grows its profits twice as fast. In addition, for a digital business, the gap between revenues and profits is narrower by 10%. In general, the further you are into digital technology, the higher your revenue growth and profit margins.
For sure, digital businesses can be very different. One can digitize only one business process while the other every one of them. See the charts below where the x-axis is the extent of digital transformation adoption. 8-9 corresponds to highly digitized business, while 1-2 indicates digitalization of a few business processes.
And just to quote the key findings from the Valoir Report:
… the automation of sales and marketing processes, greater ability to make data-driven decisions in areas such as forecasting and territory management, and the ability to deliver new products or services were three key drivers of revenue increases for organizations at the high end of the spectrum.
So when you start out and your profits look slim, embracing a digital journey might look like a lot of headaches. But… Imagine you are 2 years into your business journey. Your revenues are really taking off and your month-to-month growth is about 30%. So last month you made $100k, and this month you made $130k. But if it were a truly digital business, you would have made an extra $30k.
Then, imagine you have a very healthy profit margin of 40%. It makes you $52k in profits this month. If it were a truly digital business, you would have had a 50% profit margin. Your profit out of 160k would be $80k instead of $52k.
Even if $28k of profit doesn’t seem like a lot on a monthly basis to you, the gap becomes huge in 12 months’ time. So if you keep the same 30% growth with a 40% margin, in 12 months, your profits are slightly over $716k. Had you gone the digital route, it would have been $8,796k. Roughly a 10x difference. If that seems like a sizeable number, you should want to Develop Custom MVP app and embrace the digital. And here is what it visually looks like:
Sign 8 – Digital Consumption Dominance
With some industries and products, you should not even bother opening up a non-digital business. Consumption is moving online. 92% of global internet users watch TV streaming on the Internet. People read news online and, instead of buying a newspaper, they are buying a subscription to online news. It has already happened for the New York Times. In the USA, newspapers and writing checks are a kind of norm and bear nostalgic value. Yet, paper news did lose to the online consumption of news. Writing checks with all that personal sensitive information is deemed quite unsafe in light of the arrival of safer and more secure ways of payments. For both those items, you can only expect a gradual decline in use.
Sign 9 – Covid Impact on Digital Acceleration
It is also partly due to the Covid pandemic that people got so comfortable with consuming things via the Internet. And this trend isn’t going away or in reverse. It’s only going to grow. Here is McKinsey’s report from the year when the Covid hit.
This data clearly shows that North America has made 6 years of digitalization progress in 1 year and 60% of products are partially or fully digitized. The global numbers are slightly lower but no less impressive. Europe didn’t accelerate as fast as Asia-Pacific. But, all in all, the whole world surpassed the 50% mark for digital products.
You might expect the traveling industry to bounce back to pre-Covid ways and be immune to digitalization, but that is not true. Technology arrived there too. Virtual travel, virtual hotel tours, immersive navigation, and virtual test drives for attractions and excursions have emerged and are developing.
Food still requires to be consumed in person, but it surely can be ordered online. With tips-hungry waiters who now demand no less than 20% of the total bill in the USA (and sometimes more than that), they just make people choose to order online. It becomes a reasonable choice to order food using some nice app, which you better custom-develop.
Sign 10 – Diverse Digital Channels for Securing the Market Niche
The latest available data on marketing spending indicates the increase across all 4 major categories in marketing spending. As shown on the graph, spending on new product introductions and brand building tops the chart. Although you can see a slight drop in numbers for June, it is normal that summer marketing spending would be lower than that in August before the new academic year.
Graph: Marketing spending categories that grow
Overall, companies collectively increase their marketing budgets. The next table indicates what the marketing budget includes. You can see that sales staff constitutes a mere 9.2% of the budget in contrast to social media marketing 92.9% or marketing research 71.7%. Businesses put money into things that generate returns. The ‘direct expenses of marketing activities’ are likely to be spent on Google ads and online advertising other than social media advertising.
Table: What companies include in their marketing budget
Though, organic traffic remains key to marketing results. This strategy continues to grow steadily and the second best is partnerships. Licensing and acquisitions are on a continuous decline. Considering organic traffic as the cornerstone of marketing efforts, custom MVP app development emerges as the route for capitalizing on that.
Frequently Asked Questions (FAQ)
An MVP is crucial for startups as it allows them to test their business model, pricing, and target audience in a scaled-down version before scaling up. It helps in better engaging audiences, boosting operational efficiency, speeding up time-to-market, and facilitating innovative efforts.
Video is a powerful tool for business discovery, with over 50.3% of the world’s population going online to watch videos. Utilizing video content efficiently is in tune with custom MVP app development. Custom MVPs are synonymous with compelling videos, as they create a receptive environment for discovering new products or services.
The new generation of consumers, born and bred online, is inherently native to the digital landscape. To grab their attention and engage with them effectively, custom MVP app development is considered optimal, providing features beyond templated standard functionality and regular UX.
With 80% of people checking their mobile phones in the first 10 waking minutes, a custom mobile app or a responsive mobile-friendly website is a powerful tool for selling online. Shoppable posts and social commerce trends are revolutionizing online selling, making custom mobile app development a strategic choice.
Time-to-market is crucial, and digital products, with a shorter time-to-market, can outpace competition. Custom MVP app development significantly reduces time-to-market, allowing businesses to reach their target audience faster and more efficiently compared to traditional offline businesses.
Companies led by tech-savvy management outperform others by 48% in revenues and valuation. Custom MVP app development allows integrating technological tools into the digital product from the start, providing a competitive advantage for businesses aiming for qualitative differences.
IoT and automation enhance operational efficiency, provide real-time data, and improve customer engagement. Custom MVP app development ensures seamless integration of these technologies, offering businesses reliability and removing inefficiencies.
Digital businesses experience faster revenue growth and higher profit margins compared to non-digital businesses. Embracing the digital journey early on, through custom MVP app development, can lead to substantial long-term profits and business growth.
With industries moving online, businesses should consider digital channels. Custom MVP app development becomes essential for capitalizing on organic growth and partnerships, ensuring competitiveness in a digital-driven market.
Covid has accelerated digitalization globally, with North America making 6 years of progress in 1 year. Businesses are increasingly digitizing their offerings, making custom MVP app development a strategic move for securing market niches in diverse digital channels.
Starting a business in the age of digital acceleration goes hand in hand with embracing the digital. A huge array of technological solutions go straight to your business’s bottom line. It becomes intertwined with the ability to compete, bring profits, and especially, ensure healthy profit margins. Employee efficiency and freeing up human potential for strategic moves and interpreting data becomes pivotal in your digital business journey. To maximize the benefits of embracing the digital, the need to Develop Custom MVP app becomes evident. Consider this to be a gatekeeper of unparalleled efficiency and user engagement.