4. Got an idea for an app? Read this.
One of my frustrations in running a tech startup is that everyone else seems to think it’s so damn simple! You all read the stories of young entrepreneurs with an incredibly straightforward idea, forming a startup from their garages and 3 years later running a company valued at over a billion dollars. Naturally, the conclusion is it’s as easy as it sounds! We would all like to consider ourselves young and ambitious, loads of you have a simple app idea, a garage and are prepared to work hard for three years so what’s the problem!?
About a year ago I read an article about the latest London tech success story, a mobile app called Yplan. Yplan actioned the simple concept of selling last minute tickets to events / shows that hadn’t sold out. It meant users could discover and buy tickets to last minute, local, events at discounted rates. Another fairly simple but mightily effective idea.
Yplan had only been going for something like two or three years at the time of the article, yet it had already received investment at a valuation in excess of one the UK’s most iconic companies, BHS. In comparison, BHS, an institutional UK retailer, has been trading nearly 90 years since its first store arrived in Brixton, London. We live in an era where technology is producing companies capable of exploding like no industry ever seen before.
So what is stopping any of us from creating the next Yplan, or becoming the next Mark Zuckerburg? The truth is, lots and lots of people will have had a very similar idea to build an app that deletes images (like snapchat), or a simple photo editing app (like Instagram) or a communication platform that allows you to send photos, videos and text to your contacts for free (like Whatsapp). All of these companies are currently valued way beyond a billion dollars, whilst the similar ideas no longer exist. So the question we should really be asking is why are the likes of Instagram, Snapchat and Whatsapp the ones ending up on so many phones while no one ever heard of the other, similar versions?
I have worked on two previous tech startups, both the projects seemed like great concepts at idea stage, my friends told me so. We managed to work with some huge, globally recognised celebrities; decent raw ingredients for success right? Well, neither project got any kind of serious engagement and didn’t manage to raise any significant finance to go any further. I quickly learnt that however good your idea is, every app faces an incredibly difficult task in getting people to download (let alone use) it.
Given the significant press and exposure the overnight success stories generate, its no surprise the marketplace has become increasingly congested. At current count there are well over 1.5 million apps competing for user engagement and many more arriving every day. I met with a tech investor a couple of years ago when Clipcrowd was nothing more than an idea. He liked the concept but he rightly made the point that there are a huge number of amazing apps out there that no one has ever heard of. The key for him was how we would be getting Clipcrowd on people’s phones in the most competitive market of all. This, he made clear, was far more important than the idea itself. He is totally right of course, in plenty of industries the business idea is valuable, in the tech world the concept is the easy and some would say worthless part.
With over 7.4 billion people in the world and over 1.5 million apps in the app stores, your chances of finding a totally original idea is almost non-existent. No doubt new trends will come in and gaps in the market will still be exploited but someone will be onto these just as quickly as you. It’s who can implement the concept the best who will win, not simply who had the idea.
Let me elaborate on some of the challenges a tech startups face. Converting an idea into a product that is simple, effective and valuable to a user is the first major challenge. To do that, generally speaking, (unless you have tech know-how yourself) you need a business partner to help you build the product (of which there are all sorts of potential complications), or a huge amount of money to pay a team of people to do this for you. Both tend to be tricky for startups with little more than just an idea to show for. If you successfully manage to get past this first hurdle you then need to beat a hugely hugely competitive market to get your app out of the App Store libraries and onto users phones. If you manage this you need to scale a company that will grow ridiculously fast, make the wrong move now and early success is wasted.
As I mentioned before, the likelihood is that many talented and driven tech entrepreneurs will have tried and failed to deliver simple ideas very similar to the likes of Whatsapp, Instagram and Snapchat. The difference being, unlike these 3, they didn’t manage to get mass market adoption. Instead they came and went without a trace just like the vast majority of apps.
Now I don’t want to put anyone off, that would be hypercritical given I jumped into the market 7 years ago with no experience or understanding. Instead, I’d like to leave those of you thinking of building an app with one fundamental question before you do anything: “What makes you the person to bring the concept alive where, the chances are, so many have failed?” If you can answer this confidently then go for it, succeed in the global tech market and the world is your oyster.
