Why a hobby isn’t a business

After working in the mobile technology industry for over four years, I have heard a lot of app ideas. In our industry, the media covers a lot about the extreme cases. You hear about the technology products with quick explosive growth and major layoffs from companies being run like hobbies. Neither outcome is the result of chance.

While your app idea may be brilliant, it won’t make you a millionaire by accident. It is going to take blood, sweat and probably some tears. It is important to stay focused on what you want out of your idea and what is going to take to get there. It’s going to take sacrifice and risk.

In our city, we’re fortunate to have organizations and individuals dedicated to encouraging innovation locally. I speak from experience: MotionMobs spent some time with Birmingham incubator Innovation Depot. For new startups elsewhere, national organizations like Y Combinator and Techstars provide mentorship, capital and business advice to help new entrepreneurs develop and grow their businesses. It is a careful balance to encourage innovators to solve problems while setting appropriate, realistic expectations. Taking an idea from concept to successful execution takes a lot of planning, strategy and hustle. It is important to constantly stay true to your mission; always changing your goal before achieving it means you’ll never accomplish anything.

On the other end of the spectrum are the hobbies. Companies like Etsy have encouraged crafters to use their hobbies to create additional revenue. Hobbies are important for everyone, and if they help you earn a little pocket money, great. But they aren’t businesses. The Etsy shops that have been able to make crafting a full-time, profitable job are those who approached it like a business.

What problem are you solving? Who will use your product or service? How will you make a profit? How can you grow and sustain this business?

It is never enough to simply be passionate about your idea. That is expected. When defining hobbies, it is as easy as simply doing what you like. You can’t be the only paying customer in a business, though, so you have to listen to the market. If you can only make $1 in profit per item you craft and it takes you an hour to make one, it’s a hobby. You wouldn’t take a job for $1 per hour, would you? What you get out of it has to outweigh what you’re putting into it. It goes for apps, too. If you put in $30,000 to develop an app you’re going to sell for $0.99, you better have some solid plans for growing your audience reach and generating sustainable revenue. It has to be a business, not a hobby.

Successful businesses solve problems and design new or better ways to help consumers or other businesses. Your app idea could be the next big thing. If you don’t think like a business and stay dedicated your mission, you’ll end up with an expensive hobby. Innovative ideas could change your own little world, or they could change the whole world. Approach your app idea like a business, not a hobby, and see how many lives you could change for the better.

By Taylor Peake