For quick development, if you just want to ensure your appliction can start, start a shell, then start the application:
erl -pa ebin
1> dummys_app:start().
That will give you a clean indication of what is wrong and right without the shell bombing out after.
Since you're making an application to run, rather than just a library to share, you'll want to make a release. Rebar can get you most of the way there:
mkdir rel
cd rel
rebar create-node nodeid=dummysnode
After you've compiled your application, you can create a release:
rebar generate
This will build a portable release which includes all the required libraries and even the erlang runtime system. This is put by default in the rel/ directory; in your case rel/dummys.
Within that directory there will be a control script that you can use to start, stop, and attach to the application:
rel/dummys/bin/dummys start
rel/dummys/bin/dummys stop
rel/dummys/bin/dummys start
rel/dummys/bin/dummys attach