The Build-A-Better-Mousetrap Trap

It happens most often to people with an engineering background like myself: You have an idea for a new app. It’s a better mousetrap — so much better than existing apps solving the same problem! People are going to love it, and everyone will use this. It will be super successful.

Except it won’t.

A product which is better than existing alternatives won’t automatically be more popular. The build-a-better-mousetrap playbook is itself a trap.

Here’s how it usually plays out:

The Build-a-Better-Mousetrap Trap

The build-a-better-mousetrap trap usually plays out in six acts:

1. A design and engineering team is hired to build the brilliant product.
2. The team builds a beautiful first version of the product.
3. The product is then launched and gains early adoption with friends and family, but quickly stalls.
4. But not to worry, the team has heard of the brilliant performance of Facebook ads and tries them out. They find that the cost of acquiring customers (CAC) is far higher than what can be reasonably monetized in average revenue per user (ARPU).
5. To drive down CAC, the company rallies to ideate a referral program that’s supposed to make the product viral.
6. Since viral features that are slapped onto a product post-facto are unlikely to succeed, the startup fails.

It’s the third step where the drama usually unfolds. For the typical startup developing an app, a marketing person is usually hired to test out how much user acquisition will cost. Universally, they find out that the cost to acquire users into a new app is $5 in the US, something they could have found out before spending any money. Making back $5 in your app is very difficult:

• For an ad-supported model, the average user needs to see 5000 ad impressions at the average rate of $1 CPM in the US. This is difficult because your app’s retention needs to be very high for the average user to see that many ads.
• For a subscription model, 5% of users need to sign up for a $10/month subscription and stick around for 10 months. This subscription rate and subscriber lifetime are ambitious.

For most apps, the solution isn’t to try to squeeze more money out of each user. Instead, you should focus on driving down the cost of user acquisition: To be wildly successful, your better-mousetrap consumer app needs to be viral. But a viral loop needs to be a core part of the product flow, not something you tack on later. A relatively comprehensive list of viral product mechanisms is here — as you can see, most of them can’t be simply tacked onto an existing product.

When you come up with the better-mousetrap app idea, think about how you’re going to effectively market it. Instead of building the app to high levels of polish, isolate the viral features, build a minimum viable product (MVP) around those features, and test it. Just building yet another polished app to join the 4.7M other apps already in the iOS and Android app stores is a waste of your time.