Here in Silicon Valley, we are biased around venture capital.
The explosive potential of startups is the equivalent of intellectual cocaine, something that virtually all business people are attracted to.
Slower growth, on the other hand, is all but shunned in this ecosystem of IPOs and 5,000% returns. The idea of compounding interest is a nice coffee table book, but no one REALLY cares about that.
The app business is no different. Over the past 5 years we also bought into the venture capital (VC) model that promises a one hit wonder as long as you produce enough apps. That one hit pays for everything else, right?
Well, not really.
In this video I want to show you how the market is changing and what you should do to win over the next 5 years.
What you need to know:
- The VC model is built on lots of small investments and one titanic win. The app business was built on the same premise. It worked for a while.
- While VC’s go for the HUGE home runs, more conservative investors focus on small wins done consistently. They focus on education and value. Their home runs are measured in 10% gains.
- The app business has moved from the VC model over to the Compounding model, but the mindset of most app entrepreneurs has not.
- By having patience and consistently improving your education, your network and your business practices, you will actually reach the same level of success over the long term as before. It just takes more time.
- The Compounding model is much lower risk
- The Compounding model requires the #1 quality that causes most entrepreneurs to fail – patience
Creating a lot of products is still the ultimate way to learn about the app business. If you’re just getting started, the best thing you can do is get a few apps in the store.
But when you’re looking at your bank account wondering how it’s going to grow, realize that it’s all about the small, consistent gains. There is a 99% chance you will not hit something huge without first putting in a lot of work.
Change your mindset from “spray & pray” to “focus & execute” and you will be farther along in 5 years than you ever imagined.
Rock & roll,
Carter
Great info! Total slight edge principles at work. Thanks for the book recommendations btw. I’ve been using this technique for several months now and I’m pretty pleased at the progress so far. Just takes alot more work and care than most want to put in. Thanks Carter, you’re the man!
Couldn’t agree more! I think compounded growth is way more sustainable than the one hit wonder model as it allows a constant state of learning and tweaking. Nobody has patience anymore in this time and age. Always looking for the quick fix.