5 Reasons Startups Should NEVER Use App Development Companies!

We’ve all seen the success stories of apps like Instagram and Spotify. Entrepreneurs rapidly building billion dollar companies (‘unicorns’) has spurred an app gold-rush around the world.

There are a few inherent problems with this though.

Firstly, the odds for consumer apps winning are very low. It’s hard to get eyeballs in an attention war, and consumers hesitate big-time before committing to download an app compared to visiting a website. But I’ll talk about these challenges in another post.

For now, let’s talk about the biggest problem.

App development companies are jumping on the ‘startup gravy train’ by taking advantage of excitable entrepreneurs. Here are the five reasons app development shops are the WRONG choice for startups.

1. Biased advice

You would never ask a real estate agent for unbiased advice on whether or not you should sell your house. So why ask app development companies if your idea is worth pursuing?

Even in Brisbane, app developers (‘dev shops’) are quoting figures as high as $300K for a startup’s MVP (minimal viable product). That’s a pretty big incentive to encourage naive entrepreneurs to pursue their average idea.

The other problem is that entrepreneurs get so excited about their idea that they end up thinking their app needs 20+ features day one.

The ethical thing to do would be educating entrepreneurs on why less is more, though dev shops make more money when your product has more features.

We’ve unfortunately met countless entrepreneurs who built ‘Rolls Royce’ apps with a laundry list of features because a dev shop has taken advantage of them.

2. Money, money, money

A top-notch coder in Brisbane (Australia) costs at least $100K per annum on salary. An app development company will need to add some serious margin on top of this resource to allow for profit and project downtimes. Conservatively they could be charging this $100K resource out at a rate 3-4 times higher than their salary.

This means you could be paying app developers $300K+ p/a for your product’s coding!

Whereas, when you hire in-house, the same coder worth $100K p/a might take $50K because you give them some equity (ownership) of your company.

This way, you’re paying 1/6 the amount you’d pay an app development company for exactly the same thing.

3. Lack of experience building startups

A lot of aspiring entrepreneurs wrongly believe that the app game is as simple as building a shiny product, putting it on the App Store, and making millions.

Trust me, if it was that easy, everyone would do it.

App development companies are in the business of building apps, not startups. They don’t understand the path an entrepreneur should take to give their product the best chance of success.

Don’t believe me? Call ten local app development companies and ask them, “what successful startups have your founders built themselves?” You’ll get defensive answers as they try to deflect the question.

If you haven’t built a successful tech business before, you need to surround yourself with people who have.

4. Not as agile as in-house teams

Here’s the scenario. It’s a Sunday afternoon and a user has just emailed you about a bug; something important that isn’t working on your app. You’ve used an app development company to build your product and, guess what? They don’t work on Sundays.

Oh well, hopefully, they’ll get to it sometime on Monday or Tuesday.

In the meantime, all your users won’t be able to use a key feature of your app. Get my drift?

5. Jumping straight into designing and coding

The number one reason startups fail is they build a product people didn’t want, so the worst thing you can do if you have an idea is jump straight into designing and coding your product.

Most app development companies come from a background of building apps for business clients, not entrepreneurs with ideas. Established businesses are far more likely to understand their customer, industry, and insights, meaning they can give clear briefs to app development shops. However, entrepreneurs usually under-validate their ideas and walk in with half-baked briefs. This is dangerous.

The journey to building a successful startup is actually very scientific. In the early days, you need to do a lot of work on proving your assumptions manually to ensure you build the rightproduct.

Validating your idea properly means delaying building your product for a few months. But that doesn’t fit the app development model.

They want to make a sale!

Instead, most app developers push entrepreneurs to jump straight into design workshops to start fleshing out your product so they can invoice for the ‘chunkier’ parts of the project sooner!

So what’s the right thing to do?

The steps are simple:

1. Use manual experiments to prove that your idea is viable BEFORE building your product.

2. Raise money from investors off the back of this proof.

3. Hire your own ‘full-stack’ coder in-house to build your complete product.

If you have an idea you’ve been thinking of pursuing, but you’re not sure how viable it is – our team can help you with the first step at no cost with a confidential idea assessment.

Click here to learn more.

– By Adrian Osman, Co-founder & CEO of Pitchblak –

Why You’ll Fail Without Having The Right Mentors

I’ve always loved that saying, “if you’re the smartest person in the room, you’re in the wrong room”. Fortunately for me, this generally only happens when I’m alone.

I also dig the notion that we are the average of the five people we hang out with the most.

Mitch Harper (founder of BigCommerce) explains the value of advisors with an analogy. He says they’ve ‘seen the movie’. They know the plot. When when you’re stuck, it’s easy for them to give you simple, but powerful, advice on what you should do next.

If you’re building a startup right now, or you have a product idea, who are you surrounding yourself with? If none of the top five people you hang with own a successful startup, how do you expect to build one yourself?

Why you need advisors

For someone to invest in your business, they want to know you have people on your team with shitloads of experience in the market you’re looking to tackle. 

You might be thinking, “my idea/startup is related to the industry I’ve been in for years, so why would I need an advisor?”

A lot of founders make this mistake. In reality, of you want to build a killer startup, you should aim to have the best of the best in your industry as your advisor. You’ll be surprised at how many people are willing to help you. You just need to ask.

What do the advisors get out of it?

Sometimes advisors will take a small slice of equity in your company or a retainer if you are already funded but, ultimately, they usually aren’t doing this for the cash. 

These people are already wealthy and choose to do this because they feel excited by someone with a kick-ass project reaching out to them saying, “I want you!” So don’t forget to make them feel good. You’re reaching out to them because they’ve done epic shit, so make sure you commend them on their wins so far. Everyone likes a compliment.

Also make sure you continually show your appreciation. Be super humble! The more they feel like you appreciate their time, the less they’ll care about charging you for it.

NOTE: Be sure to vest equity with any advisors you bring on. Vesting means they get their equity in pieces over a couple years, instead of upfront which protects you from giving away chunks of your company and regretting it later. Also don’t hand out board seats to anyone until you know them intimately.

How do you lock them down?

Fear is the typically the biggest factor holding you back. You don’t try because you’re afraid someone will say no or think your idea isn’t good enough. Stop making excuses. If you believe you have a good idea, do your research, hunt down the right people, then reach out by email or LinkedIn.

If you want two great advisors, reach out to one hundred at least. Don’t be afraid to ask people higher than your reach. Expect a lot of rejection but don’t let it discourage you.

Keep your message to them short, simple and HUMAN. Especially if it’s on (spammy) LinkedIn! You won’t get cut through by sending long, templated messages. Add something unique and catered for that person to catch their attention.
So get out there and start hunting down the best people in your industry to be one of your advisors!

Why Small-Medium Businesses Need to Create a Scalable Asset.

After over five years of building my own startups, and the past three helping hundreds of other entrepreneurs, I’m starting to get a good view on where the big opportunities sit in this space.

One of the coolest things we’ve stumbled across while building Pitchblak has been realising that small-medium business owners have a huge opportunity to spin-off a scalable asset (like a software or hardware product).

Business owners often get stuck trading time for money; it’s a hamster wheel with no ‘out’ in sight. Even when you do exit (sell) a services business, the multiples are hardly exciting for all the blood, sweat, and tears that go into building them.

Strangely, very few business owners have realised the massive advantages they have over other entrepreneurs:

– Valuable insights from their experience in the industry
– Connections for distribution and potential investment
– Existing cash flow to cover the costs of creating the asset
– Knowledge of how to run and grow a team

These things are super helpful in building a scalable asset that could sell at a multiple much more lucrative than any typical services business will sell for.

We’ve recently started working with a few business owners on this, and it’s been really rewarding and enjoyable work for myself and the team.

If you own/manage a business and you either (a) have an idea already, or (b) have experience in your field, and you understand the things that are ‘broken’, reach out to us…

– By Adrian Osman – Co-Founder & CEO Pitchblak –

The ‘Secret’ To Work-Life Balance For Entrepreneurs

Ready to hear the secret to achieving optimal work-life balance as a crazy entrepreneur? The secret is…there is no secret.

Work-life balance doesn’t exist if you’re trying to build a killer, worldwide business. The word ‘entrepreneur’ is used pretty broadly, so I thought it would be good to segment them.

1. The ‘lifestyle entrepreneur’.

call people who leave their job (and asshole boss) to start a small business ‘lifestyle entrepreneurs’. They have a flexible schedule and chilled lifestyle. They either work alone or have a small team that’s easy to manage who are typically all in one location. They have plenty of free time with their partner watching Netflix, play recreational sport on the weekends, and have more than three friends.

Lifestyle entrepreneurs tend to be freelancers or owners of boutique online stores. They have the freedom to pick their hours, work from home, and have a great work-life balance.One huge misconception is that people believe lifestyle entrepreneurs can’t earn much money. Wrong. You can earn thousands a week doing this, with very little stress and lots of time for Game of Thrones.

2. The crazy, “I’m going to change the world” entrepreneur (‘scale entrepreneurs’)

This option is much harder. Building a scalable business that solves a big problem in the world means you’ll have more stress, a big team, and very little free time. The hours are damn long. Expect 12+ hour days for five to seven years.

Don’t believe the hype about startups becoming easier as you grow. I don’t know who started that rumour but I’m not happy with them. It’s certainly not all personal assistants and helicopters. Do you think it sounds more stressful to be doing graphic design in Bali for five hours a day or managing a team of 120 staff, who are all relying on you for their livelihood? I think the answer is pretty clear.

Scale entrepreneurs are always working. There is no switching off. Though the people suited doing this love it this way. We’re the ‘addicts’ of the business world and we couldn’t think of anything worse than retiring.

3. The ‘traditional business entrepreneur’.

I’ve never liked the elitism surrounding the word ‘entrepreneur’. We’re all business owners. We’re all entrepreneurs. The plumber who finds a way of streamlining his business in a new way. The cleaner that hacks together her own cleaning equipment to nail hard to reach places. They are all entrepreneurs.

The traditional business approach is obviously much lower risk than trying to scale fast-growth startups, but there is nothing wrong with that! If you’re tired of ‘working for the man’ and want to take control of your life without entering the hectic startup space, than this is the perfect choice for you.

I know plenty of people making sweet dosh building businesses that aren’t too innovative or sexy, but I can tell you now, they don’t give a f**k. Financial freedom is financial freedom.

The takeaway

All entrepreneurs are awesome. Whichever path you choose, you’re creating something from nothing. And that shit is cool. Just be clear about what type of entrepreneurial path you are choosing before you dive in so you can set you (and your family’s) expectations from day one.

How To Become a CEO by 24 Without Going to University

At the ripe age of 24, I had stumbled into being the Co-founder & CEO Pitchblak, while also being a shareholder in a decent stable of tech startups. Although it initially felt like I was moving along at a normal pace, I was continually asked how I got to this stage so quickly and at such a young age.

I wasn’t handed anything on a platter to get here, but there were some distinct things that made quite the difference in my journey.

Not going to university helped (A LOT!)

I’m 110% sure if I went to university, I wouldn’t be where I am today. While most my friends were studying and traveling for four to five years, I was knuckling down and learning by getting my hands dirty.

I don’t believe the uni model is completely redundant. I understand university is necessary for some professions. I certainly wouldn’t want to have a brain operation by some self-taught kid in a garage.

Though for anything business or marketing related, the uni system is totally broken. There’s way too much theory, and not enough doing. I even had this mindset right back in high school so I didn’t apply for university.

After graduating school, I immediately started applying for jobs and mistakingly ended up in the world of sales.

Learning to communicate a point effectively was a key part of my personal development. I also met tons of people from all different walks of life. This had a huge effect on me as I learned so much about how to relate to a vast range of personalities – a skill I’d later find out was vital to my success.

Working my ass off

In entrepreneurship, hard work trumps skill. It doesn’t matter how talented you are, you have to be prepared to work at least ten times as hard as the average person (in hours and output), otherwise, you simply won’t make it.

It’s an emotional rollercoaster…there were so many times I considered calling it quits to do something easier. The key to being a hard worker is not feeling sorry for yourself. It’s human nature to feel down when you’re at the office late at night knowing your friends are drinking beers and watching Game of Thrones.

The trick is to be aware of these thoughts and to cut off them off the second it starts happening. You’ll notice your working habits get easier once you start to see the hard work turn into tangible success. These wins are the ‘coke hits’ entrepreneurs thrive on.

The challenging part though is making it through the rough patch in the beginning of your journey where the small wins feel so small that they’re almost unnoticeable. You need to back yourself and realise with enough hard work you’ll get to the point where the ‘small’ wins will be things worth tens to hundreds of thousands of dollars.

Taking risks

I didn’t have to take risks a huge as some of the entrepreneurs I know well to get to this point, but I sure didn’t take the comfortable route.

Even when I worked for other people, I wouldn’t choose the safe option that paid me a steady salary. I wanted my income to reflect my results. I started this approach at the age of 17 which made it so much easier for me to continue on this path throughout my entrepreneurial career.

If you always choose safety over risk it will be harder for you to leap off the once you’re ready to start your own thing.

Pouncing on opportunities I wasn’t ready for

Putting my hand up for opportunities I wasn’t ready for before owning my own businesses, I would argue my way into management roles way above my reach.

I was fortunate to have a few influential people in my life that gave me opportunities I wasn’t technically ready for. They saw a fire in my eyes and were willing to bet on me.

When you get solid opportunities, you need to deliver. I didn’t talk big only to get the role and take my foot off the pedal. I knew I was punching above my weight which made me push harder to get real results. By the time I was 20 years old, I had built a sales team within an ad agency from 6 people to more than 100 staff reporting to me.

I had no idea what I was doing but somehow I made it work. Always remember you will never feel ready for the awesome opportunities that life throws at you. So if ‘feeling ready’ is your key metric for making the decision to put your hand up, you’ll likely miss all the big shots.

Knowing I wasn’t good at everything (or much at all!)

Ego kills success. When someone thinks they’re incredible, they don’t ask others for help. If anything, I think my strongest skill has been the ability to recruit these amazing people to join our company’s ‘crusade’.

I knew I had to master recruitment as I wasn’t talented enough at most the technical skills needed to grow a business. This doesn’t mean I didn’t learn about each function though. A great CEO understands the ins and outs of each function within their business.

I read a lot of books and did online courses to teach myself how each part of a business worked so I would know great talent when I saw it and how to manage my team effectively. It’s also hard to gain the respect of your team if you don’t understand the tasks you’re asking them to perform.

There are some critical skills you will need though as a CEO which you can read here.