Guest Post: How startup app developers can thrive amid competition from big enterprise

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Ilya Gelfenbeyn headshotEditor’s note: Ilya Gelfenbeyn is the co-founder and CEO of Speaktoit, which develops talking virtual assistants for Android, iOS and other platforms.

As mobile apps have grown into a multi-billion-dollar industry, large corporations have adopted an increasingly hefty presence within that industry. This fact may worry some independent developers and startups, especially those that find themselves in direct competition with much bigger, better-capitalized, better-established enterprises.

But startup developers shouldn’t necessarily fear competition from their bigger brethren. Being small comes with its own set of advantages, and the presence of big enterprise in a space can often be a help, rather than a hindrance. Here’s some advice for small developers on how to hang with the big boys.

1. Embrace being small. Who says bigger is always better? Large, well-capitalized companies may have more resources, staff members and time, but that doesn’t necessarily mean they’ll come up with a better app.

  • Take advantage of the lower bar to entry. And thanks to the relatively low bar to entry for creating a mobile app, which tend to be much less sophisticated and much more easily brought to market than, say, computer software, the field is wide open for small startups or single developers. In 2009, Ethan Nicholas developed the game iShoot in his spare time, and the app eventually rocketed to the No. 1 spot on the Apple App Store. Try telling Nichollas (and plenty more examples like him) that a bunch of staffers at a large gaming company could have done better.
  • Take risks. If you’re just starting out as an indie developer, you don’t have shareholders to please, payroll obligations to meet, or a brand to uphold. You may have bills to pay or a family to support, but hopefully you’ll be in a position to experiment. This puts you at an advantage to many corporations, who are often too concerned with making a safe play than to seize the next big opportunity.
  • Leverage your flexibility. Bureaucracy can stifle innovation, and it can also make it tougher for companies to respond to the market. At a large corporation, a new idea might have to go through several layers of approval before developers are even allowed to start working on it. In the time it takes them to get off the ground, you may be able to pre-empt them with a similar offering.
  • Develop partnerships. It tends to take much longer for large companies to agree on partnership terms with other players, whereas you can start working right away with partners who can help advance your progress. Being an indie app developer means that you are a part of a very large community of highly motivated, talented people. Rely on them!

2. Use the big guys to your advantage. When we were first developing Speaktoit, our virtual assistant app, we were told by many people that Apple would obliterate us when it developed its own virtual assistant. After Apple announced that it would release Siri, however, interest from investors and corporations in Speaktoit only grew. That’s when we learned these lessons:

  • Large companies can push and educate the market. If you operate a vacuum repair shop and another vacuum repair shop moves in down the block, you might have cause for concern. There are only so many vacuums to repair, and now someone else is threatening to take a share of a limited market. Today’s mobile market, however, is still in its formative stages. That means that when a big company moves into a new space, it often brings a new market with it — creating new opportunities for you, the small app developer.
  • If competition is fierce, you might be the prize. If your endgame is to get scooped up by a bigger company, then having big competitors operating in the same space can be a very good thing for you. Create a unique app, and if enough companies are fighting to gain supremacy of the space, then you might find yourself on the right side of a bidding war.

3. Don’t forget the basics. There are benefits to being small —  but they only come into play if you put yourself in position to take advantage of them. How do you do that? Simply come up with a unique idea for a great app, and protect your great idea. If you can accomplish those two things, then the sky is the limit — no matter your size.

  • Differentiate. There’s no shortage of apps out there that allow you to take notes. Some of them were created by the biggest companies around. Yet that didn’t dissuade the makers of Evernote from developing a note-taking app, because they thought they could do it better. Even though they were working in a market that appeared to be saturated, the app they developed succeeded in ways that others hadn’t. Plenty of other apps fulfill the same basic function, but Evernote attracted 14 million customers because its developers set themselves apart from the pack.
  • Protect your idea. Developing a great app is no easy task — don’t let your hard work go to waste by failing to protect it. Take the time to educate yourself on the basics of copyright and patent law, and do a preliminary search for patents in your field on Google (google.com/patents). Meet with an attorney, and file your patent as soon as possible to beat out competitors (you might look into filing patents overseas, as well). Take care of other intellectual property needs early on, such as employment agreements, licenses and contracts. Putting in the time to protect your work early on will save you a lot of heartburn, and possibly heartache, down the road.