The “Chicken and Egg” Problem with Mobile User Acquisition

Mobile app developers face a structural "chicken and egg" problem in staffing user acquisition at launch, according to this 2015 analysis by Eric Seufert. The argument rests on two obstacles. The first is a cashflow gap: lifetime value is realized over horizons of 180, 360, or 720 days, while marketing costs are paid upfront, so even high-ROI campaigns require substantial financial resources. The second, which he considers more intractable, concerns staffing.

Because the app economy is winner-takes-all, a large burst of marketing around launch, particularly when supported by platform featuring, is worth more than the same reach spread over a longer period. Capturing that value requires a trained user acquisition team in place at launch. Yet developers cannot know before soft launch whether an app justifies a large global rollout, or whether it should be released at all. The window between strong soft-launch metrics and a fully polished global launch may be only two to three months.

That leaves developers with imperfect options. Hiring early lets them find qualified people but means paying salaries before the work exists and risks boredom and attrition. Hiring after soft launch avoids idle payroll but forces a rushed search, or a delayed launch, when recruiting experienced mobile marketers can take months. A third option, using an agency, is dismissed because few agencies have strong mobile teams and most are not performance oriented. Either hiring path wastes money or leaves it on the table.

The problem is most acute for developers without portfolios of apps that a fixed team can serve continuously. The piece closes with a question rather than a conclusion: as with analytics infrastructure or localization, user acquisition may be better outsourced by companies too small to benefit from economies of scale. The analysis is conceptual and draws on no quantitative data or survey sample.