So you have a great app idea… but can it be a real business?
The reality is that without thoroughly vetting and planning your app idea, you’re likely to make a lot of preventable mistakes (see our article #1 Mistake People Make With Their First App.)
That’s why we’ve created this guide to help give you an overview of what it takes to ensure your app idea is viable.
Welcome to the 5-Step Guide to Turning Your App Idea into a Viable Business.
Step 1. Determine What Benefits Your App Will Provide.
Seems like a no-brainer, right? You’d be surprised how many people forget that apps need to add significant value to consumers to generate downloads and consistent usage, especially as your app grows in complexity.
Great software solves difficult human problems
The more fundamental and universal the need that you can solve, the bigger your userbase can potentially become.
The more complex and painful the problem is, the more people will be willing to pay for you to simplify it.
Think about the apps you use on a daily basis they all solve hard problems simply. You can press a button to get an Uber, order a pizza, file your taxes or get your next pair of running shoes.
The actual logistics of making these services happen are impressively complex, but the process for users is so simple that it is easily accessible by millions.
If your goal is a huge business, that’s where your app idea needs to get. It needs to create massive value and have a massive appeal that is simple for anyone to understand.
Learn about basic human problems & adapt your app idea to solve them in meaningful ways
To help get your app idea to where it can create massive value and appeal, it is important to put some colors onto your thought palette.
Maslow famously built a hierarchy of human needs, which illustrates basic needs that you can tap into. Here’s a sample of his list and some examples of how great apps leveraged those needs:
- Physiological Needs: Air, water, food, shelter, sleep, clothing. Ex: Airbnb, Grubhub, Doordash, Rent the Runway, Amazon.
- Safety Needs: Security, safety. Ex: Yelp, Dropbox, Google Drive.
- Love & Belonging: Intimate relationships, friends. Ex: Facebook, Tinder, Instagram.
- Esteem: Prestige and feelings of accomplishment. Ex: Linkedin, Strava, Khan academy
- Self Actualization: Achieving one’s full potential, creativity. Ex: Fitness apps, Productivity apps, Adobe Suite, GarageBand
Take some time looking at this list, how does your app idea fit in? What would need to change about the idea to fit core needs better?
How to define features vs benefits
Software has two basic aspects: features and benefits. A feature is how a problem is solved.
A benefit, on the other hand, is the solution to the problem the potential customer has. It’s the value someone gets from a feature. That’s why what your app does is different from the benefit it provides.
For instance, Uber connects drivers with passengers. That’s the function — or the power to do something about needing a ride.
Solving the issue of finding a driver quickly and transparently means passengers don’t have to hail taxis, pay for rental cars, or call their sister to drive them home from the bar — that’s the benefit.
How to discover compelling benefits
People pay for benefits, not features. So, let’s take a look at how to identify features and benefits from your own idea.
Here’s a list of questions that will help you understand your features and benefits better:
- What fundamental problem am I solving? (Or, what human need am I addressing?)
- What options are already being used today?
- What is good about these existing solutions? (What benefit are people willing to pay for?)
- What downsides do they have? (Or, what keeps people from opening their wallets?)
- How could I solve the same problems 10x better than the existing solutions? (What makes you unique?)
- What benefits can I provide that will make my potential customers eager to use my app?
The answers to these questions will help your idea stay on track as you continue to test it, develop it, adapt it, and ultimately, validate it.
2. Get feedback from potential users.
The next step is to find people who would benefit from your product and get feedback. You’ll want to talk to people who won’t give you biased answers so you can get an accurate feel for how people would react.
Create an outline of your app
The easiest way to get solid feedback is to flesh out your product idea enough to introduce it to potential consumers. You don’t need to build anything, just head to a whiteboard or grab a piece of paper and sketch out how the process will work end to end.
It doesn’t need to be beautiful, it is just to give you a clear idea of how you think your app will work. Then it is time to get feedback.
The objective with the first round of feedback is to get a feel for what people think about your solution, not to prove that you’re right.
You are trying to discover how people approach a specific problem and if your solution is adequate.
One-on-one interviews or small group interviews are great ways to get detailed feedback in the beginning.
How to prepare for a user interview
First, you need to find the right people. If they have the problem that you’re trying to solve or a resource you need to solve, they are the right people.
Second, come prepared with answers to the following three questions:
- What do you think the problem is that you’re addressing?
- What do you think your solutions are/could be?
- What benefits will the app provide?
Once you have decided on the answer to those questions, you should outline your interview the following way:
- Does this idea address a real, painful need?
- Describe the problem to them, ask how frequently they have it.
- Ask things like: On a scale of 1–10 how painful is it?
- When do you normally experience this problem? (Have them provide potential solutions to the issues they see and figure out what situations people would be most interested in using your app for.)
- How do you typically solve it?
2. How viable is the current iteration of the solution?
- Describe the solution to them.
- What do they like? What’s unique?
- What doesn’t work? What don’t they like and why? (Sometimes this can be hard to hear, but it’s crucial that you listen to these responses.)
- What would they recommend that you change?
3. Are the benefits this solution provides 10x better than the competition in some important way?
- Describe the benefits of this app and have them gauge how excited they are about it
- Ask them about current solutions they use, what do they like and not like about it?
Example interview prep:
If you were trying to build an app that made it easier for people to buy and sell apartment contracts, your interview prep could look something like this:
- Problem: When you want out of your apartment lease, but can’t get out because it doesn’t expire soon enough.
- Solution: An app that makes it easy allows sellers to sell their apartment lease quickly and buyers to pick up contracts at a discount.
- As a seller you’re able to sell your apartment contract instantly
- As a buyer, you’re able to save money on the transaction
- As a landlord, you have happy tenants
4. Questions for Sellers:
- As a tenant, how frequently have you wanted to leave your apartment lease, but can’t because it doesn’t expire soon enough?
- How painful of a problem was that to you? Why?
- How much would you be willing to pay if you could sell the contract instantly, why?
- If you were stuck in an apartment contract right now, where would you go to sell it?
- On a scale of 1–10, how likely would you be to use an app like this? Why?
- What situations would you see yourself using this app in?
- What do you like about this idea?
- What doesn’t work about this idea? What don’t you like?
As you go through the interviewing process it is important to remain unbiased and open. Don’t ask people questions with implied answers like, “Why are you frustrated with selling contracts?” Before you’ve asked if they are. When you’re looking for the truth, confirmation bias won’t benefit you.
Give people a chance to rate your app on a scale of 1–10. Your average ratings are good indicators of how well you’ve solved their problem.
Step 3. Refine Your Idea.
Apps, like everything else in life, do not fall out of the sky fully formed and therefore they rarely encounter reality the first time without getting scuffed up a bit.
That’s ok! In fact, that is the process. Knowing a problem is half of solving it. After each interview, you’ll have some exciting new additions or changes that’ll help polish your idea.
The purpose of sharing your idea is to let people beat it up and poke holes so you can improve it.
Keep iterating and improving the idea until you can describe your idea in a few sentences and your user's eyes light up and they say, “When can I download it?”
Step 4. Develop Your Business Model Hypothesis.
After you’ve gathered data and continued to refine your idea, it’s time to develop a business model hypothesis, which is essential to answer, “how will you make money?”
Here are a few common ways apps make money that you can choose from:
- Freemium - Have a basic version of your app for free, have people pay to upgrade
- Pay to download - People purchase the app before they can use it
- Subscription - Charge people for access to features on the app each month
- Marketplace - Host buyers and sellers of products/services and charge a percentage cut per transaction or per month
- Advertising - Offer some or all access to your app for free and charge advertisers to access your users
Each model has its pros and cons that you should carefully weigh out. But no matter which model you choose for your business, our recommendation is that you create an income statement that allows you to model out exactly what assumptions would need to be true in order for your business model to succeed.
Modeling out the revenue and expenses helps you get a really good feel of what would need to happen in order to make your business work. And it forces you to put hard numbers to where in your head was just fuzzy ideas.
Your assumptions will basically always be off from reality (that’s ok, too!) but, as long as they are in the ballpark, you’ll have a clearer understanding of what needs to go right and to what extent in order to make your venture successful.
We’ve built out a template that you can plug in your numbers to. We highly recommend that you download it and play around with your assumptions. It can literally save you years of wasted time. You can download it below:
Curious how profitable your business could be? Download our free income statement model.
Step 5. Test your App Idea Manually
Finally, after you have developed a concept that people respond to and a model that you think that you can make profitable, it’s time to take the process out for a test drive.
The key is to make a simple system that requires little effort to work so you can see how your app functions without spending money on development.
It’ll help you see where things may need to be simplified, or where you may have holes that need to be filled in first.
For instance, with the apartment contract selling idea, you could go out and talk to a bunch of tenants who need to sell their contract and say, “if I could sell your apartment contract, would you give me $10?” If they say yes you then go search online and try to find a person in the market to buy and then make the transaction happen.
It’s a tedious process, but by doing it you learn what is most important to users, what is most important to the process, and where you can streamline the process.
That way, when you’re ready to go to start building your app, you know exactly what to build instead of guessing and making major revisions throughout the process of development.
If you think you’re close to developing your app, you may be interested in our article: Three Questions to Ask Before Making Your First App! Or if you’re really ready to start reaching out to us and we’ll work through the wireframe of the app with you for free! firstname.lastname@example.org.