Mobile apps are more popular today than ever before.
With so many entrepreneurs trying to develop the next truly “disruptive” app, it’s likely that you too have an idea for a potentially groundbreaking app.
But how can you turn your idea into reality by moving from concept to execution?
And how do you build a business around your app in today’s cluttered world?
In this article I’ll discuss the fundamental strategies for turning your idea into an app product and share some hands-on examples from appreneurs we work with here at Appster.
Let’s begin with the most obvious one.
1. Start with the Problem
Billionaire Vinod Khosla once famously said:
“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.
If your imagined app won’t somehow make people’s lives better, i.e., if it won’t add value to the world, then nobody will ever use it.
Whether you think of the matter in terms of adding something (e.g., increased pleasure, excitement, or fun) or taking something away (e.g., relief of boredom, sadness, or insecurity), your app must solve a specific problem of which people want to get rid — or it will fail, period.
Once you’ve identified the problem you then need to determine whether it’s significant enough to support the creation of a product.
How do you do this? By confirming that the problem is a “monetizable customer pain”.
I’ve previously described this concept in the following way:
“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., itneeds 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).
How can you validate your monetizable customer pain?
In order to test your pain hypothesis you must:
- 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.
As I’ve noted before, acquiring valid insight from your respondents requires attaining brutally honest answers:
“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:
- What is the most difficult aspect of X i.e., the problem?
- Tell me more about x. What happened the last time X occurred?
- Why was that experience so problematic or unenjoyable?
- 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?
Use all the offline and online resources to which you have access — existing email lists, online message boards, social networking and micro-networking sites, Reddit, Linkedin, Quora, Meetup.com, industry conferences, local coffee shops, etc. — to find potential future customers and gather the detailed feedback you need.
Once you’ve accumulated enough feedback to confidently assert that you’ve discovered a problem that needs solving, it’s time to validate your product idea.
In this case, your product idea is, of course, your envisioned app.
The more you learn about the pain plaguing your potential future customers, the more you will develop a clearer understanding of what your app should do and why.
My co-founder Mark McDonald recently reviewed a number of key product idea validation strategies that you should use in your quest to build an app, including:
- The $20 Starbucks test (i.e., buying passers-by a coffee in exchange for honest feedback on your objectively-presented idea);
- The “knock-on-the-door” approach (e.g., using online surveys, polls, and personalized messages on Internet forums to gather feedback);
- 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);
- Attending meetups and in-person events to gather responses to your idea and recruit assistance/advice from others in your industry; and
- 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.
The purpose of these efforts is to help you ensure that you’re on the right track with your app idea by gathering insights from people in the “real world”.
2. Research the Market
At this point, you’ve figured out a solid customer problem and you’ve validated your app idea by talking to people in the flesh.
The next step to transforming your app from the mere idea into purchasable download is to thoroughly research the market in which you plan to operate.
Market characteristics — size, presence/absence of demand, nature of financial opportunities, etc. — ultimately determine the success (or failure) of an app, as I’ve pointed out before:
“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 bigmarket 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):
In order to answer the proverbial question, “If I build it, will they come?” you need to collect data on:
- The size of the entire market in which your specific niche is based;
- The number of people you expect to be able to reach through your marketing efforts; and
- The number of people most likely to purchase your product.
These numbers will necessarily get smaller as you progress from your TAM to your TM.
In addition to determining the precise characteristics of your ideal customers (by, for one, developing user profiles), you need to ensure that your TM is large enough to support the development, marketing, sale, and ongoing improvement of your app.
How should you begin conducting extensive research on your market?
Finally, one last crucial aspect of calculating market dynamics involves researching your competition by creating what Balaji Srinivasan calls an “idea maze”, i.e., a bird’s-eye view of the entire landscape in which your product will be marketed and sold.
Constructing an idea maze for your market is crucial because:
- 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;
- 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
- Planning how to navigate your way through the maze is ultimately how you successfully monetize your idea and build your business.
An example of an idea maze:
With a solid understanding of the problem you intend to solve, the specific product you plan to build, the unique needs of your future customers, and the particular ins/outs of your market niche, it’s now time to find a co-founder (if you haven’t already).
3. Find a Co-Founder
We here at Appster typically recommend that entrepreneurs try and build an app by partnering with at least one other co-founder.
Whilst successful solo founders do indeed exist (Elon Musk and Mark Zuckerberg being two obvious examples), many high growth startups are in fact the products of teams comprising two or three co-founders each.
I speak from personal experience: my co-founder Mark McDonald and I originally built Appster together when we were in our late teens.
Amongst other reasons, you should seriously consider finding and working with at least one other co-founder because:
- 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
- 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.
Locating a talented, hard-working, and dedicated co-founder to help you build your app isn’t likely to be easy but there are several online communities that are worth consulting, including Founder2Be, FounderDating, meetup.com, and Startup Weekend.
You should also try and exploit your professional networks alongside exploring sites like LinkedIn and relevant Facebook groups.
As for specific strategies you can use to foster a healthy and robust professional relationship with your co-founder(s), here are 5 approaches we recommend:
- Define role responsibilities early by collectively determining which tasks will belong to which co-founder;
- Create and sign a founders’ agreement so as to officially instantiate duties, equity ownership and vesting, and intellectual property assignments;
- Agree on time commitments, i.e., develop clear expectations regarding how much each person will contribute, when, and where;
- 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
- 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.
If you’re currently in the midst of establishing relationships with one or more other co-founders then consider trying out Appster’s free Co-founder Agreement Generator to help you create the basics of a founders’ agreement
Finally, be sure to check out this article here wherein I describe 7 essential strategies for building a fantastic startup team.
Having found one or more solid co-founders, it’s now time to (finally) build your MVP.
4. Build and Test Your MVP
In short, your “minimum viable product” (MVP) is a stripped down, essentials-only, working version of your app that you release to limited public in an attempt to gather hands-on, real-world feedback from actual users “in the wild”.
Eric Ries, who helped popularize the concept, defines MVP as the “version of a new product which allows you to collect the maximum amount of validated learning about your customers with the least amount of effort.”
Techopedia lists three key features of an MVP:
- It provides enough value that people are willing to use it and/or buy it after its launch;
- It demonstrates sufficient future benefit to retain early adopters; and
- It provides a feedback loop that helps to guide ongoing development.
Jessi Salonen, Lead Digital Producer at Appster, insists that an MVP gives your early users what they need, not what they might want:
“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?
Jessi provides the example of a hypothetical music-streaming app that’s instructive here:
“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?
As the guys over at Crew point out, “the more features you build, the more complex your product will be, and the longer it will take to build your app.”
It’s crucial that you stay focused on developing and releasing your MVP so that you can start gathering unmediated feedback from actual users as soon as possible.
Every extra “bell and whistle” you add during your original development automatically extends the length of time that it takes for your app to finally land in the hands of real users.
The only way you can determine exactly how your app will perform once it’s “outside of the lab” is to give end users the opportunity to use it however they see fit.
Your in-house (alpha) testers will not discover every last bug in the code, regardless of how much testing time they’re given, and so it’s vital that you permit outside (beta) testers a chance to work with your app sooner rather than later.
On this point, Jessi warns founders to be on high alert if their team starts raising questions like, “What if we made it possible for users to?” “Why don’t we add?” or “How long would it take to change?”:
“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
In terms of marketing, it’s essential that you consider Geoffrey Moore’s basic insight in his book Crossing the Chasm.
Moore argues that startups must concentrate on successfully dominating the early adopter market — fixing bugs, responding to customer concerns, winning the hearts of users, and steadily building a brand reputation — before they can possibly hope to “cross the chasm” and seek out success in the mainstream markets:
Commenting on this very topic, I recently pointed out:
“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.
Both when beta-testing your MVP and promoting your app following its public release, it’s crucial that you market your app to those most likely to use it.
In all likelihood, it’s the early adopters who will happily try out your app and encourage their friends to use it rather than the typical middle-aged soccer mom or elderly grandparent.
Speaking of promoting your app, we’ve put together a full-length article on 8 winning strategies you can use to attract positive PR for your app.
The other key aspect of marketing of which you should be aware is the need to utilize “viral loops” in today’s tech-centered world.
Gone are the days of conventional marketing in which businesses pay lots of money to drive traffic toward their products (websites, apps, etc.) in an effort to convert a small fraction of that traffic to active, paying customers.
Today, viral marketing funnels are the new norm: instead of a large number of potential customers transforming into a small number of actual customers, a few actual customers help bring in exponentially more customers.
With viral marketing, each new user brings in one or more new users, who then bring in one or more new users themselves, and so on:
Viral marketing and viral loops are rooted in incentivizing practices that encourage the users of your app to recommend to/share it with others.
In order to create viral loops that effectively convert your users into ambassadors, i.e., into people who recruit others to your app for you, you must offer your users something of value.
This must be something tangible and immediate that makes them willing to bring their friends, family, and/or colleagues over to your product.
Uber’s dual-side referral code system — whereby person A receives a free $20 ride credit when person B, who also gets a $20 ride credit, signs up for Uber using person’s A unique referral code — is an obvious example.
In fact, Uber’s referral system is so successful that approximately 50% of new Uber customers arrive via referral.
What, then, will you use to incentivize your users to help you grow the size of your user base and the popularity of your app?
Anybody hoping to take their idea for the next big app to something actually available on Google’s Play Store and/or Apple’s App Store must also possess a solid grasping of numerous defining metrics that must be analyzed during and especially after release.
Rather than go into the minute details, here’s a list (with a set of corresponding links to Appster articles) of key metrics that any app-centered startup would want to ensure that it measures accurately and often:
· Average Revenue Per User (ARPU);
· Break-Even Point (source);
· Cost Per Install (CPI);
· Cost Per Loyal User (CPLU);
· Customer Acquisition Costs (CACs);
· Lifetime Value of a Customer (LTV);
· Net Promoter Score (NPS);
· User Engagement (source); and
Finally, it’s vital that you develop a clear understanding of monetization and various other financial realities in order to comprehend how your app can make generate revenue, which is necessary not only to “keep the lights on” but also to continuously improve and refine your app for your users.
On the one hand, there are a bunch of standard financial concepts and metrics of which you must be aware in order to stay afloat as a business, such as burn rate, cash flow, growth vs. profit, runway, and zero cash date (see our recent publications here: 1, 2, 3).
On the other, and more to the point, there are numerous app monetization strategies that you can use (and, in many cases, combine) in order to generate earnings from the download and/or use of your app.
I recently wrote a comprehensive article detailing 9 different monetization methods available to app creators, including:
- 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):
- ng 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: