Does anyone have advice about entering the social media apps and games space?

I'm interested in entering the social media apps and games space. I personally have several years of experience in interactive media development for the web (both programming and design) and some experience with social media. I also have a couple of co-workers who are interested in joining me. I'm currently working on my first social media app right now and really think this is something I want to explore more.

I'd like to hear experiences from those who have created (or are in the process of creating) businesses that develop social media apps and games. Some of the insights I'd like to gleam include:

• How and why did you enter this space?
• What has been your experience developing, promoting, and monetizing apps aimed directly at users?
• What has been your experience in developing apps for other companies (i.e. work-for-hire)?
• What challenges have you encountered along the way?
• What mistakes have you made along the way?
• Upon reflection, what misconceptions did you have when starting out?
• What advice would you give someone just starting out?
• NEW QUESTION: Is it too late to enter the space?
• NEW QUESTION: If I enter this space, my venture will be self-funded with a very low budget. Will I be able to survive amongst the manpower, money, and marketing muscle of the already established players in the space?

These questions are pretty general. I'll be happy to update with more specific questions based on the responses I get.

Thank you in advance for sharing your expertise!

You should read about and see if you can connect with the founders of Jambool. I wrote a post about them on my blog. You can see it here. They started out developing social media applications. They found that the space was pretty crowded and eventually they used their experience to begin producing tools that are used by the social media application developers. It's an interesting story.

One huge part of their success was that they were seemed to spend a lot of time ensuring they were plugged in to the community of developers in their space.

Let me know how this venture works out for you. It's a fascinating space.