Are you close to building your first tech startup? Do not hesitate to check if your mobile app idea is worthwhile learning from the first-hand experience and do not rush to rent an office or move to Silicon Valley!
Sobering statistics: in 2018, for more than 69% of entrepreneurs in the US, the very first business has been started from their home place. And only 13.5% of global startups are being launched in Silicon Valley and San Francisco.
What you really need is to conduct marketing research, discover your target audience, and develop an app budget. Our next article will help you to deal with that!
Is My App Idea Good? Do the Market Research
Almost half of the global tech startups (42%) fail because their market offers are not demanded. To avoid the same results you’ve got to turn your idea into a sustainable commercial concept with a clear budget structure and income expectations. Start with a market survey which could prove that your idea for a mobile app is viable and will be required by customers.
Basic market research consists of several sections. To make it easy to understand, we turned them into questions:
What my target market looks like
Outline your general market field, specify your niche, and finally look through what’s going on there. A good idea is to check main competitors (10 niche leaders) and then switch to smaller ones (10 randomly chosen firmly standing players from the first hundred).
Figure out what makes your offer different from their ones and study their market strategies and promotional channels.
Find those who sell a similar product. That should be the first stage of the search for your competitive advantage.
Could my idea be in demand within the next years?
That is all about your target audience. To reach it you need to know what it looks like. Summarize your tech startup idea from the customer’s point of view, outline key advantages of your product, and think of people willing to use it. Here, you’ll need to answer the following additional question:
What customer’s problem are you solving?
How serious is that problem? Does it affect the life quality of those people?
Aren’t there any already existing substitute solutions available for your potential customers?
Finally, develop the image of your target users and make general assumptions about their number. Don’t forget to clarify demographic questions (age, gender, region, and household incomes).
Who will agree on paying me for my services and how much?
“I have a mobile app idea” you may say. OK, let’s check if it is possible to turn into business by forecasting your incomes earned during the next years.
Take the estimation user number, keep in mind their material status, behavior model, and competitors’ offers and determine the minimum and the maximum amount of money that these people can pay you.
Assume the price of your product and remember that soon you’ll need to compare it with your break-even cost.
What to Do with an App Idea? Craft Your Value Proposition
Obviously, it’s not enough to have a mobile app idea if you dream of a profitable startup. The marketing survey is a tool to learn if there any demand for your future offers as well as to calculate potential income.
Use the results of the marketing research to design a strong value proposition for your customers. The one that will leave your existing competitors far behind.
There are some tasks of the value proposition. Make sure that your hypothesis regarding it satisfies each of the points:
- Your proposition should attract your target audience
- It could become viral and spread with a less promotional budget
- It increases user loyalty and converts newcomers into regular customers
- The proposition is a justification for a higher price
- You easily outperform direct and indirect competitors
Mind that your value proposition is not what your startup actually does and not how the idea for an app sounds, but a reason for your target audience to buy something from you.
Your value proposition should be specific, measurable, and unique otherwise it will not sound convincing enough for your client.
The uniqueness of the proposition detaches you from competitors with similar products and help you to compete with them not at the price level, but the level of quality or additional services. A good proposition refers to customer’s insights and fears, describes how the customer’s problem will be sold, and give reasons to act now.
To craft your value proposition, we advise you to follow those stages:
Stage 1. List all value proposition ideas
Do not limit yourself to one idea. Try different approaches. Your value proposition may be unique and general (like Instagram) or focus on specific aspects of the service (like Uber).
Stage 2. Find claims of value and rate them
How could you prove that you can help people? Think of your support service, experience, app customization, etc. Indicate as much evidence of your responsibility and competence as possible. After that, evaluate each of the items to choose which ones are decisive for potential customers.
Stage 3. Match major claims with strong evidence
Determine which of your promises to your target audience received the highest rating. Strengthen them with arguments and facts. Congrats, your value proposition is ready!
Who Will benefit from My Good App Idea? Identify Users and the Audience
In the previous paragraphs, we’ve already touched a target audience aspect. As you see, a clear understanding of what your future users look like is a core factor of your business success. Here, we’d like to give you some simple instructions on how to conduct your target customer survey and several hints to avoid mistakes having a low budget for the research.
I have a great idea for an app, now what? Follow our instructions!
Step #1. Select your target audience
Let’s make it clear. The target audience of your startup brings you money and one of your apps could just use it, share the information about it, and act in a way you need. Those two target groups could be the same, but usually, they are different.
For example, if you use the Freemium monetization model and show users ads in the free version of the product, you’ve got a split audience. Your app has to attract users, while your sales managers struggle for profitable collaboration with famous (and rich) brands.
Step #2. Find your market segment
There are two basic categories of business. The one serves end customers (B2C), the other works with companies (B2B). You could serve both of them at the same time.
Distribute your customers in smaller groups by answering questions about their age, gender, region, material and marital status, and occupation. That also works for B2B segment where you need to determine business types you are going to sell your app to, as well as a portrait of the person who is in charge of buying such products for a company.
What to do with an app idea on this stage? The most common way to divide the audience into segments is based on location, device type, demographic and solvency principal. The last one is about getting to know if your target audience is likely to pay for your solution.
That is also important to draw detailed customer portrait using such criteria as interests, life values, and the style of making decisions on buying products like your app. Think of your audience’s needs and motivation.
Stage #3. List problems of your audience groups you’re going to solve
I have an app idea, what’s next? It’s not only about the core functions of your app but about deeper insights such as lack of communication and self-expression that you target customer may suffer. Create a wide list of psychological and practical problems, match them with solutions you might propose, and find customers’ true motivation to buy your product.
Stage #4. How to reach potential users?
It’s great if you know your target audience geographical location. At the same time, in the case of mobile app ideas, the product geography may be flexible. You can focus on a regional market or sell your product worldwide.
The other question is what is the best way to meet your target customer. On Facebook? At work? Offline? Figure out what media content they consume, what devices they use, and what places they visit. Later, that will be the basis of your promotional strategy.
To save research costs, conduct you survey both online and offline: create a landing page MVP to collect email, check social profiles of the representatives of your target groups, study statistics of your niche, and create a consultative group of several random people to proceed oral or written surveys.
You may also use such tools as interviews, polls by email or phone, and field research. Use several methods at once to make the results precise.
Where Is Money? Identify the Monetization Strategy
Having an idea for an app doesn’t mean having an idea of how to get the revenue out of your concept.
Monetization concept development is another critical step within the app launch procedure. To find a proper monetization model you need to analyze your competitors’ monetization experience and already developed target audience portrait. Try to find answers on the following questions:
- What monetization strategies are commonly used by major competitors?
- Would your target customers be ready to pay for your app or its particular features? How much?
Having those answers, choose the best monetization model for your new app idea or develop a hybrid one mixing various approaches. In our blog, you can find an ultimate app monetization guide. Use it to clarify each commercial approach listed below:
Nowadays, most apps are free to download and people are accustomed to freeing solutions, but it doesn’t mean that you can’t create a paid one and become a successful entrepreneur. In 2019, the average app price is less than $0.5. They offer customers no-ad user experience, extra product quality, and unique solutions.
In-App Advertising Model
Surprisingly, marketers spend more money on Internet advertisement than on any other kind of promotion including TV — in 2018, $180 billion were spent on mobile advertising globally.
The app of that kind is free to download, but a user has to deal with a certain amount of ads inside it. Short videos, vertical and horizontal banners, permanent text ad section, and interactive images shown while the app is updating are just a couple of examples.
That is the most popular monetization concept as it is easy to implement with the help of any in-app advertising provider. The more people will use your app, the more money you’ll get from your provider.
Keep your app free to download and develop some features your audience would be excited about.
Extra lives, additional levels, power-ups, and virtual currency inside mobile games are the brightest examples. Photo editing apps also use the in-app purchases model to sale filters. Games, dating apps, and media editing tools are most successful in selling additional features and virtual objects within their framework.
By the end of 2020, the in-app purchases revenue will grow to $71 billion.
Paid subscription (Freemium)
Freemium model is not limited with paid subscription one, however, that is the most common approach of using the concept. The idea for a new app of the Freemium type is to let users download the app for free and then to propose them to purchase its premium version where there are no ads, lots of extra services, and personal support if needed.
The concept can bring you constant revenue, unlike paid apps that need to make their audience wider to get everyday revenue.
Remember that your new app idea may include several approaches. For example, you can use a paid subscription model and cooperate with in-app advertising provider at the same time. In this case, you will gain half of your revenue from engaged customers who decide on buying the subscription and another half will come from ads rotating for less engaged users.
How to Develop an App Idea? Executive Stage
Well, now you’ve got results of the market research, basic revenue calculations, and some general observations about your app development and promotional budget. Let’s move on to the executive stage!
Here, we’d like to go through the critical app development stages. To learn them deeper, we advise you to read our other article titled How to start a startup? Make a business step-by-step.
Web or Mobile?
I have an idea for an app, what’s next? The basic question you need to answer on the pre-development stage sounds like “Should it be web or mobile app?”. The answer will affect your budget, development team line-up, as well as project timelines.
To choose the correct option, take into consideration your target audience features (what is more convenient for them to use — mobile websites, cross-platform apps or native apps?). The second factor that may affect your decision is the flexibility of your budget. Any costs should be justified, right?
If you have a great idea for an app and you don’t know what kind of tech solution you need to implement, use our comparative analysis:
Native Mobile Apps
Native apps are designed for specific platforms. Most often it is iOS or Android. They offer better user experience and are faster than websites for mobile. Native apps should be installed from the Google Play Market or App Store. Their major advantages are following:
- Added UX value (you can engage users with special animated features)
- Intuitive UI environment
- User customization options
- Offline usage
- Access to built-in mobile device features to enable extra features
There also several disadvantages. First of all, to build a native app that everyone can use, you have to invest both in Android and iOS development. Such development takes more time.
Cross-Platform development can be a good solution for those, who’d like to keep a balance between the high speed of their apps and appropriate user experience.
Cross-Platform apps could be downloaded both to Android and iOS devices, they have poorer UX and UI still having such options as offline access and friendly design environment comparing to mobile websites.
Disadvantages — less customized UX and UI environment, poorer animation compared to native apps, and lower operating speed.
Mobile websites don’t need any downloading process, users just open their browsers and start working with the app. At the same time, mobile websites should be responsive and have an adaptive layout, otherwise, they will be inaccessible for people with different mobile devices. Mobile website development is less costly compared to native app one.
Let us name some major positive features of mobile websites:
- No downloading is required (but user need to have Internet access) — your product is ready to be used by anyone
- No unexpected updating process — always fresh UX and UI
- Lower development costs
Mobile websites approach is less popular today. The industry had generated less revenue than mobile apps one, which is expected to grow twice in the next 2 years. However, mobile websites are a good MVP solution as it helps to reduce development costs and help you to reach a bigger audience.
In-House or Outsource?
If you have an idea for an app and a general view of how it should work, that’s time to ask the price of developing your product in different companies and different regions.
In our blog, we’ve already raised the question of outsourcing development looking on the issue from different sides. Check the article called How to Hire Dedicated Developers for detailed analysis or look through key advantages and disadvantages of In-house or Outsource concepts below.
In-House Software Development
In-house software development is a process which is going on inside the company that needs the software. Usually, the company has an inner development unit and a constant need for IT tools development. In-house developers are regular workers of the company, they receive their salary regardless of the project they are working with and time spent on them.
Full-time in-house development is costly. The only way for it to be reasonable is a long term basis.
- Faster face-to-face communication inside the team without cultural, language and time zone boundaries
- Deeper team members project experience
- Better engagement into the engineering process
- Fewer time spendings on the same operations
- High development price
- Low border expertise
- Professional drain
Outsourced Software Development
The key idea of the outsourcing model is to dedicate the development task to the specialists (or entire teams) that have deep expertise in the tech area. They are likely to finish the task faster, make fewer mistakes, and, what is more important, it will cost you less than hiring regular full-time workers for some on-time tasks from your region.
An outsourcing company can build any digital products for your business. All you need is to choose experts in your area. You may save even more working with an outsourcing company from the region where hourly rates for the work of the same quality are the lowest.
- Smart pricing
- Fast team scaling
- Deeper specific expertise
- No staff support issues
- Well-established processes with accurate timelines
- Cultural, language and timezone barriers slow down the process
- Commercial secret risks
- You may need constant tech product support services from the vendor’s side
How do you develop an app idea? The next critical development stage is wireframing. And yes, it’s about design. Wireframing could be compared with architectural blueprinting of a human skeleton. First, you think of main features and target audience app usage habits, second you try to figure out the number of screens, buttons, graphic elements, and interactive fields you’ll need to meet user expectations.
Mobile app wireframe covers several aspects of UI and UX design:
- Content (text, images, and interactive elements)
- Features technical implementation
- Possible user actions and user journey mapping
- Space distribution
- Screens transitions
- Data storage architecture
It’s good if you have different variants of app wireframes. The next step is to show them to your focus group and get to know which approach is better. Remember, that wireframing may also include basic branding sections such as brand palette, firm style features, logo, visual tone of voice, fonts, and some key images.
Create an MVP
A Minimum Viable Product (MVP) is not an app wireframe or draft, but a working app model with only major product features. An MVP is a way of app idea testing and a chance to avoid losses. In our blog, you may find an MVP building guide. Read and follow it carefully to develop an app idea in a money-saving way.
In this paragraph, let’s name key MVP development stages and make a general overview for each of them.
Stage #1. Decide on key features
Some features of your app might be critical to app functionality and some of them don’t. Choose the most important and list them. Remember, that your product should be viable and clear for future users. If you’ve got peered features, keep both of them.
Step #2 Create an MVP wireframe
Think of screens, their content, active elements, and graphics. An MVP wireframing will help you to clarify the development budget and set timelines for your team members.
Step #3 UX and UI design
An MVP is a ready-to-use product with limited features. It requires the same specialists to be implemented as a regular app does. At the same time, designers will spend less time on your MVP than on final product, because they will work out fewer screens.
Step #4 Programming
Develop, check the quality of the product, and test its features! Regarding the type of your app, you’ll need different specialists to execute the development task. Project manager, QA, designer, and copywriter are also involved here.
Step #5 Marketing, launch and results learning
This stage usually starts soon after you decided to develop an app idea. Branding, promotional channels, and strategy, project launch support, as well as learning real-user behavior and statistics, are direct tasks of the marketing department.
The idea of an MVP is to help you to know if your idea is demanded and what aspects of it you need to improve.
How Much Does It Cost to Develop an App?
It’s impossible to monetize an idea for a mobile app without knowing the price of its development. Find detailed instruction for how to estimate your app in our article titled How much does it cost to build an app.
In this paragraph, we will analyze some key factors that affect app development budget and give alternative ways to estimate the project:
- Functionality. More features mean more working hours.
- Supported platforms, devices, and screen sizes. More options — more money. Consider that some platforms require more costs: iOS app development is usually 15% more expensive than the Android one.
- Design complexity. The number of screens and visual objects inside them raise costs.
- Mobile device features incorporation — GPS navigation, camera, and other technologies.
- Project deadlines. If you’d like to speed up the process, you have to pay extra money.
Each development stage — market research, design, development, testing, and launch could be estimated separately, as you don’t need all type of specialists at one moment. You can also separate costs by employees involved in the development process.
To form a team full-cycle team you need at least 4 employees — Project Manager, Programmer, UI / UX designer, and QA. You’ll find the full list of specialists, their types, and rates below:
Visionaries $40—70 per hour
Who? Project Manager, Business Consultant, Business Analyst, and Strategist
Designers $35—77 per hour
Who? Application Architect, Strategist, Navigation Planner (UX), Visual Designer (UI), and Content planner
Software developers $25—70 per hour
Who? Data Modelers, Back-end Developer, Front-End Developer, Embedded Systems Developer, API Developer, and many others
Quality Assurance experts $30—63 per hour
Who? QA and Marketer
Marketing department $10—70 per hour
Who? Copywriter, Designer, Brand Manager, Database Analyst, and Infrastructure Analyst
Besides app development costs there are also app maintenance costs which usually are around 17% of the basic budget. They include expense items such as monitoring, ongoing marketing, app updates development, hosting, and legal support.
“I’ve built my app!” Build—Measure—Learn concept
“I have an app idea, what’s next?” anyone who’s preparing to his first startup launch may ask. What we as an expert in the field of app development would recommend is to keep in mind the commandments of the Build Measure Learn Model.
The concept was developed by Eric Ries and has been described in his The Lean Startup book; it helps any startup owners to speed up business processes and avoid money-consuming mistakes like developing features or products nobody wants to use.
The Lean Startup is a startup that never stops improving itself (the mechanism is called feedback loop). In brief, it is based on MVP-cycle also named Build—Measure—Learn.
Move from a single idea (or hypothesis), estimate resources needed for its testing, create code, and then try to gain as much user behavior data as possible. Analyze user feedback and make a conclude whether your idea was profitable or not and how you should improve your app to make it more user-oriented.
The Lean Startup is a scientific method of launching startups and improving its features. It could be implemented on any startup development stage as well as used as a tool to optimize communication and marketing processes.