mobile-apps, investorsI researched a while to get an answer for this question, but didn’t find one.
When a mobile app startup approaches investors, usually tries to show the number of users on their pitch material. The question is, how does a startup actually prove that they have that number of users?
Say, I reach an investor and claim that my mobile app has 10,000 registered users. Is he/she going to ask me to provide a list of users perhaps with their email addresses? If not, I could claim a very high number that attracts them on the spot (I wouldn’t do that of course, but I’m really curious).
And finally, a lot of users might have provided fake email addresses. Do we have to force them to verify their email addresses (using an activation link)?
Any ideas are appreciated.
It’s a very interesting topic to define what user is to a startup. When it comes to a mobile app, usually number of downloads and number of registrations are key factors. Number of downloads describes the reach of the app and number of registered users defines user engagement.
Should the registration involve email verification ?
Well, it depends on what you want to do. A lot of apps do that but you could also use phone number verification which is usually faster, if at all phone is mandatory, by sending code via sms and user enters it to verify the phone numbers.
Fake users ?
Well, it doesn’t matter as long as the app is downloaded and you have verified users. In the mobile world there’s no concept of fake users IMHO as its a downloadable app.
An investor would certainly ask about the users db and their activity over a given period to understand how your so called users are using the app.
Hope that helps
While you could probably lie about your user numbers to get initial funding, investors aren’t stupid and will realise if you exaggerated yuor user count.
For example if your business model was to sell ads: X number of users generate Y number of traffic & ads cost Z cpm, you should be making Y/1000*Z dollars. If your investors don’t see this, it raises questions.
From there on, if your angel investors realises numbers are wrong and declines to invest more, what will other investors think about that?
Investors believe less about future or probability and more about actual/present condition. There will be more good impact on investors if you show them total count of active users [on google play , Apple store] using your app rather than count of users might come and use your app. in future.
Best way to show user traffic on your app. is total no. of downloads in minimum time. This way investors can put trust on you and your plan. Next thing is you must have solid plan that if you have 10k active users then what is your plan and prototype to make it 20k or 50k and that plan should be in way like investors can digest it easily. By this way you can win and investors can ready to invest.
I think you can prove it by your app activity or traffic, number of user who download your app, or if you have an internet based app you can show the traffic. But if you consider it to prove when you do a pitching, you can show the prospects of your apps in the future - sustainibility of your app.
All content is licensed under CC BY-SA 3.0.