'A Failure Story Of An Uber-like App: The Cost Of Skipping The Business Analysis Stage' post illustration

A Failure Story Of An Uber-like App: The Cost Of Skipping The Business Analysis Stage


When developing a new product, it’s crucial to have a complete business vision to ensure all activities are aligned with the idea and goals. Nowadays, there’s a lot of data on the internet that might make you think that you can build this vision without any research and analysis just by googling. But here comes the question: how many businesses have done the same?

With many articles on “How to build an app like Uber” flooding the internet, the number of startups who decided to develop such applications grew significantly. Unfortunately, not all such apps succeed. Missing the business analysis stage leads to overinvesting, not meeting deadlines, not finding the demand, or even complete failure of the app.

One of our clients has wasted about $25,000 because of trying to save on business analysis. They’ve learned from their mistakes; now, you can learn from them instead of making your own.

How it started

Our client wanted to build a taxi application, as they’ve found out there’s a huge demand, and they knew many similar successful businesses. The founder had a technical background, so they were sure they could handle all business and organizational issues, and it would be sufficient to hire only designers and developers.

The client assured us they have a well-designed business model, a research-based competitive advantage, an elaborated feature list, and clear KPIs for their product. They’ve raised some investments and started the project.

What went wrong

During the project, we’ve noticed some red flags that put the business side under some doubt. Even though the client did not involve our business analysts, our team detected some issues in the approach and processes, highlighting all the weak points on the go so the client could take action and save the situation.

Not all of our directions were implemented immediately. Still, as a result, the client understood the main point: you need to have a comprehensive, clear, and structured business model before starting the development of even the simplest project.

After the retrospective analysis, we can define the main mistakes that prevented our client’s startup from reaching its goals on the first try.

Mistake #1 No fixed business goals

Not knowing what the product needs to achieve and how it should transform the market would turn the product development into a fifty-fifty situation: you either win or lose. And your success is a matter of pure chance in such a situation. Therefore, it’s crucial to identify beforehand what your product is aimed at, how the results can be verified, and what the next steps would be.

Our client assumed they knew their goals however didn’t state them clearly and didn’t define the metrics to check whether the goals were achieved. As a result, they spent more time post-release analyzing whether all the goals were attained and defining the market fit.

Mistake #2 No planning

Performing tasks one by one without paying much attention to timelines might work when you are working on a small pet project, have an unlimited budget, and don’t need to meet particular deadlines.

But if you’re a startup with a tight budget and need to get the first profits as soon as possible, you’d better define the requirements for an MVP and create a clear roadmap with fixed milestones.

Our client realized the necessity of the roadmap halfway. We offered our project manager to create it and help organize the work. This allowed the project team to track the progress, velocity, and, eventually, the ability to fit in the timeframes.

Mistake #3 No defined scope

Without fixed product requirements and a clear backlog with prioritized features, it’s hard to focus on essential tasks, and sometimes stakeholders start changing the requirements on the go, not knowing which of the options would be the best for their product.

Our client spent much time on UI design and animations instead of thinking about the critical flows and features. Such changes took place even after the pages were developed, which caused the necessity to redevelop them and turned into wasting both time and money.

We insisted on releasing the MVP as soon as possible to start testing it with the actual audience and then iteratively enhancing it based on users' feedback. Our project manager formalized the existing scope and took control of its following, simultaneously convincing the client to concentrate on “must-have” features instead of “nice-to-have” ones.

Mistake #4 No responsibility division

When the client started the development, they were sure they could handle all the management themselves, as they had relevant experience. But it is hard to manage your own product, performing many different roles at once: being a founder, a product owner, a project manager, a fundraiser, a researcher, an analyst, a tester – and having a full-time job apart from the project.

Conducting all the tasks is time-consuming and might not be effective at all, especially if you don’t have corresponding skills and experience. In such a case, the time you can allocate for solving critical business issues is close to zero. And this leads to under-quality products and overwork for your team and for you in the first place.

After some time, when the client realized they couldn’t handle everything themselves and gained more trust in us, they started delegating more, which led to more focused efforts and balanced decisions.

Mistake #5 No competitive advantage

During the development, even without a complete business analysis, our team figured out that the market was full of similar offers, and it would be difficult for the app to win the competition. Though, the client preferred “saving” costs on nurturing the business idea and investing in the development right away.

There was no marketing research at the beginning of the development, and the solution was being created intuitively, following the example of another existing product. As a matter of fact, when the project ran out of the first investments, investors refused to support a product without a complete business vision.

We convinced our client to conduct marketing research, build the ideal customer portrait, and think about the unique value proposition of the application to make it viable. Our business analyst helped to conduct the research, define the problem and create a pitch for investors to continue funding the startup.

Where it led

After spending some time developing and redeveloping secondary features without proper analysis and planning, the client considered our advice and paused the development to prepare a comprehensive business plan and return with a new product vision.

For SysGears, it was a valuable experience that taught us always to review and ensure the project's business plan. Even if the client denies the need for business analysis, we don’t start projects without ensuring their viability, as we are interested in product success, not just release.

How to avoid such mistakes

For those of you, who are starting your own projects, we’ve gathered a minimal set of actions you need to complete to ensure your idea is profitable and viable.

Even with a limited budget and time frames, you can take some necessary steps to crystalize your business idea and get ready for effective development:

  • Clearly define your business idea and product vision
  • Identify the business or user’s problems you need to solve and the goals you want to achieve
  • Define and prioritize the feature set
  • Create functional requirements
  • Document the specifications and convey them to your team
  • Define the responsibilities of each team member

These actions will help ensure the most efficient resource allocation and productive goal-oriented development and create informative pitches for investors to fund your project.

Final word

A clear business vision is crucial for startup success. Business Analysis is not just a part of software development, it’s a part of your business development and requires great attention and effort. You can increase your chances of success by thinking your business idea through and preparing high-level concepts before investing in more low-level activities.

If you need business analysis for your startup,
we are always ready to help!