The Startup
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The Startup

I have an idea for an app, now what?

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1. Start with the Problem

“If there is no problem, there is no solution, and no reason for a company to exist. Nobody will pay you to solve a non-problem.”

The essence of any successful product or service, including an app, resides in its ability to solve a given problem.

“Successfully establishing a problem/solution fit requires discovering and thoroughly understanding a customer pain so significant that sufficient numbers of people not only recognise its existence but are willing to pay good money for its solution.

On a pain scale of 1–5, a monetizable pain is a 4 or 5, i.e., it needs to be addressed now.

(An example of a monetizable customer pain is the need to instantly buy/sell goods and send/receive money in a fully decentralized way on which today’s cryptocurrencies are built).

  • Find a sample of customers;
  • Survey them in person or online;
  • Evaluate the results; and
  • Do more testing to refine your understanding of your customers’ wants and needs.

“Rather than eagerly pitching specific ideas to your participants and trying to sell them your particular pain hypothesis, you should ask open-ended questions intended to allow respondents to speak freely and openly.

It’s also important to avoid priming your audience by ensuring that you don’t explicitly tell your participants that you’re working on a business idea.”

You should, thus, pose questions like:

  1. What is the most difficult aspect of X i.e., the problem?
  2. Tell me more about x. What happened the last time X occurred?
  3. Why was that experience so problematic or unenjoyable?
  4. What solutions, if any, are you currently using to address X? What do you find unsatisfactory about them? How do they need to be changed?
  1. The $20 Starbucks test (i.e., buying passers-by a coffee in exchange for honest feedback on your objectively-presented idea);
  2. The “knock-on-the-door” approach (e.g., using online surveys, polls, and personalized messages on Internet forums to gather feedback);
  3. Creating a test ad campaign and measuring the results (e.g., building a cheap yet effective landing page that presents a unique value proposition and allows visitors to sign-up for (or even pre-order) your future app);
  4. Attending meetups and in-person events to gather responses to your idea and recruit assistance/advice from others in your industry; and
  5. Earning face-time with successful entrepreneurs by leveraging your social and professional networks and having mutual acquaintances introduce you to important leaders in your market niche.

2. Research the Market

“The significance (i.e., value) of a problem depends on the size and growth of the market to which it belongs. In order to be successful, an app requires a big problem within a big market for which there is a big consumer demand for a fix.”

Assessing whether a suitably large market demand exists for your app requires differentiating between total available market (TAM), serviceable available market (SAM), and target market (TM):

  1. The size of the entire market in which your specific niche is based;
  2. The number of people you expect to be able to reach through your marketing efforts; and
  3. The number of people most likely to purchase your product.
  1. It helps you better understand the amount and types of competitors working in the same space as you, thus giving you a more thorough grasping of the competitive landscape;
  2. It makes it possible to map out opportunities and discover new possibilities by visualizing “openings” where other companies are not operating (or not operating well); and
  3. Planning how to navigate your way through the maze is ultimately how you successfully monetize your idea and build your business.

3. Find a Co-Founder

  1. In case you are planning to raise funds at some point, many venture capitalists and startup incubators expect startups to be driven by multiple creators these days; and
  2. Launching an app entirely on your own almost guarantees a more stressful, time-consuming, and emotionally, intellectually, and financially taxing experience than what could be achieved by working with one or more co-founders.
  1. Define role responsibilities early by collectively determining which tasks will belong to which co-founder;
  2. Create and sign a founders’ agreement so as to officially instantiate duties, equity ownership and vesting, and intellectual property assignments;
  3. Agree on time commitments, i.e., develop clear expectations regarding how much each person will contribute, when, and where;
  4. Decide on an exit plan rather than leaving unanswered key questions concerning what each member ultimately wants to do with the app or with the company more broadly; and
  5. Agree on a “We failed, now what?” plan, i.e., decide early-on a) what it would take for you and your co-founder(s) to conclude that the business has failed and b) what actions would need to be taken in response.

4. Build and Test Your MVP

  1. It provides enough value that people are willing to use it and/or buy it after its launch;
  2. It demonstrates sufficient future benefit to retain early adopters; and
  3. It provides a feedback loop that helps to guide ongoing development.

“Creating and launching your MVP mobile app is a bit of an art form. It’s all about striking the right balance between giving your users what they need before you’re absolutely certain of every last feature they might eventually want.

It’s basically your morning coffee without the latté, i.e., it has the caffeine hit consumers crave but it lacks the fancy whipped cream and chocolate shavings that bring that extra bit of pleasure.

Your MVP comprises all the core features of your application, i.e., the high value must-haves rather than the potentially valuable nice-to-haves.”

Practically, what does an MVP look like?

“What is the crux, the absolute essentials, of this app? It’s the ability for users to upload their personal music to a single platform from which other users can discover new tunes and artists. In order to make the app sufficiently attractive to your initial adopters you’d probably want to give them the option to save some of their favourite songs/artists for later listening. But that’s it. That’s your MVP.”

Building your MVP and committing to getting it into the hands of your alpha and beta testers quickly forces you to ask and answer important questions like:

  • What is the essence of my app? What, most of all, makes people want to use it?
  • What are the must-have features vs. the nice-to-haves?
  • Which features must I include in v1.0? Which can I leave to a later date?

“When this happens you’re headed for trouble! Why? Because this is precisely how entrepreneurs get needlessly distracted and end up veering off the path of pushing their MVP to market and collecting real world feedback from consumers. You must have the self-discipline to set aside these developments/changes for a future version of your app.”

Let’s bring this article to a close by looking at the final dynamics associated with launching an app.

5. Marketing, Metrics, and Financials

“Successful companies know when to cross the chasm from the early adopter segment to the mainstream population.

To become truly disruptive, new apps must dominate early adopter markets first. Early adopters are both open to novelty and relatively forgiving if product bugs arise.

Once a product succeeds amongst early adopters, the company behind it can leverage this much-needed validation by successfully targeting mainstream users.

Mainstream customers are likely to be much more receptive of a product when they know that they aren’t the ‘guinea pigs’ on whom some potentially unreliable gadget is being thrust.”

Whereas mainstream consumers want security, dependability, and brand recognition, early adopters are keen to use new technology because of its novel and cutting-edge.

  • Advertising, e.g., displaying third party ads within your app itself or on your company website;
  • Affiliate marketing, i.e., “the process of earning a commission by promoting other people’s (or company’s) products” (source), e.g., Podcast Addict’s hosting of ads at the bottom of its screen (in this case, an ad for Android Pay):
  • Selling data, e.g., FourSquare selling its location data to Microsoft in 2014 (source);
  • Freemium, i.e., providing users with a basic, functional, and completely free version of your product/service whilst simultaneously enticing users to become paying customers by offering them a more advanced, feature-rich, premium version for a price, e.g., Dropbox’s free vs. paid versions:
  • Software-as-a-Service (SaaS) / Subscription, i.e., charging users periodically (usually monthly or yearly) to use your service, e.g., Shopify’s tiered subscriptions.

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