Many new tech entrepreneurs want to launch an app or platform that provides some measure of cloud functionality. It’s popular, convenient, and cost-effective, allowing you to sell a monthly subscription service instead of selling one instance of a product. On top of that, it grants you the ability to scale almost limitlessly, constantly adding new users without massive increases to your bottom-line costs.
However, there are some major challenges most new cloud entrepreneurs face, and if you don’t address them, it can kill your idea before it has a chance to take off.
Challenges for Entrepreneurs
These are some of the biggest challenges for developers of new cloud apps:
- Security. Cloud security is vital to the success of your app. It’s a top considering factor for businesses and individual users of your software, and a quality that could easily make or break your reputation. If your app isn’t secure enough, it could spell the end of your company. Unfortunately, cloud security is highly complex. You’ll have to consider many different points of potential vulnerability, including your core software, connection points to other integrations, and even the habits of your end users. It’s a monumental technical hurdle that not all entrepreneurs are equipped to overcome.
- Funding. Most startup entrepreneurs struggle with funding on some level, but for cloud apps, it’s even harder. You’ll have to convince investors that your app is capable of earning them far more money than they’ll initially invest, and you may need to raise a tremendous amount of capital to pay for the software engineers and physical infrastructure necessary to get your business started. If you don’t get enough money, you may struggle to build any initial momentum.
- Differentiation. It’s estimated that an average-sized company could use more than 30 different cloud apps. There are hundreds of thousands, if not millions of different software companies competing for attention, oftentimes in the same field. If you’re trying to get visibility in a broad niche like marketing, accounting, or cloud storage, you’re going to have a tough time getting above-the-fold visibility. You’ll need some critical way to differentiate your business, like with extremely low costs, much higher security, or features that none of your competitors have. Coming up with this differentiating factor is hard enough—you’ll also have to execute on it.
- Image and trust. Most cloud apps position themselves to be used and trusted by businesses, some of which have millions of dollars and a public reputation at stake. Accordingly, you’ll need some way to prove that you’re inherently trustworthy, which can be incredibly difficult for a company that has a limited client base and no proven track record. Much of your early success will depend on your ability to brand and sell yourself. What does your brand stand for? What are your values? How can you prove that your app can do what it claims to do? The more objective evidence you have, the better.
- Initial users. When cloud apps reach a remarkably high number of users or when they acquire a handful of high-profile corporate clients, they earn a big enough reputation to sustain themselves. They start earning new users by sheer virtue of their existing clout. Unfortunately, attracting those first hundred or so users is incredibly difficult. Your pitches will be harder to sell, your brand recognition will be limited, and there’s no guarantee the users you do convince will stick around indefinitely.
- Marketing and advertising. One of the only ways to get in front of prospective users as a new cloud app on the scene is to invest heavily in marketing and advertising, but this can be both challenging and expensive. You’ll usually be competing with many similar businesses, most of which are operating on a national scale, so paid ads will be more expensive, your visibility will be lower, and you’ll find it hard to find a worthwhile competitive advantage.
- Scaling. One of the key advantages of starting a cloud-based app or platform is your propensity to scale over time. However, there are many ways to get scaling wrong; you can expand too quickly, lose touch with your original image, or encounter unforeseen problems as you incorporate new users. These can all have a powerfully negative impact on your business’s development.
One of the most important factors for your success is remaining adaptable. No matter how carefully you plan or how technically skilled you are, there are going to be unexpected changes and curveballs that put you off guard. Your chances of success will depend heavily on your ability to recognize and adapt to these changes, like shifting your strategy in response to fresh competition, or abandoning a marketing campaign that simply isn’t working. The more flexible you remain, the better.