If you launch a simple app to validate your idea, you risk losing customers’ interest but can … [+]
If you launch a simple app to validate your idea, you risk losing customers’ interest especially in a competitive market with many established solutions. The benefit is you get to test your riskiest assumptions quickly and cheaply. If you launch an advanced app, you risk wasting a lot of time and money building a product people don’t need. The benefit is you get to launch a promising solution if customers find it useful and worth switching to and paying for. What should you do?
The answer to this important question mainly depends on three factors: customer expectation, competition, and the resources of the entrepreneur. Before discussing each factor, there are two stages that entrepreneurs should not skip no matter the startup launch path they choose to pursue.
Qualitative validation is about answering how and why your ideas are valid. We’ve all conducted qualitative validation research whether it is by researching the competition, talking to future customers or following groups and forums that discuss competing products, opportunities and customer expectations.
Essentially, it’s about doing your homework to answer these key questions:
- Are there direct competitors?
- If Yes, what are their strengths and weaknesses?
- Who is their ideal buyer?
- How big is the problem for the customer?
- What do their customers like and hate?
- How can your solution be different?
- How big is the market?
Customer interviews is the most effective qualitative validation channel because it can help you answer all of the above questions in addition to connecting you with people who may soon become your customers which makes the interviews a customer acquisition channel.
Quantitative validation provides a proof to qualitative validation tests. While customer insights can provide a strong signal to a need for a better solution, conversations and online research are not enough to validate an idea. In most cases, it’s not that your interviewees are not telling the truth, when your product is ready, most or all of them will not join simply because it may not be worth the switch if your solution is not significantly better than the competition.
Presales is the most effective quantitative validation channel because it proves your customers need your solution and are willing to help you fund its development even though they know it will take time before they can use it.
Alternatively, you can test if potential customers are willing to fill out a long questionnaire to build their profile and prepare their account for when the product is launched. Taking the time to answer the questions is another test and a way to start gathering data while building the product.
Qualitative and quantitative tests are your opportunity to eliminate invalid hypotheses and focus on building a product with a higher probability of success. Those two pre-development stages are essential no matter if you choose to build a simple or advanced app.
Now back to the three factors you should consider to define your app development scope.
1. Customer Expectation
Customer expectation and competition are two factors that go hand in hand. In a competitive market with many similar but slightly different solutions, customers have options. Building an inferior product without a unique differentiator will most likely lead to failure.
Your product doesn’t necessarily have to include all the features of competing products as long as the core can be different. For instance, when the investment startup Robinhood launched, the product had fewer features than competing products. Hundreds of thousands of people joined Robinhood because of its commission-free investing.
In a market with limited and mediocre solutions, big opportunities exist. In this case, solving the problem of underserved segments can mean launching a simple solution as long as it gets customers’ jobs done. For example, Airbnb didn’t even need a website for its launch while Groupon started with a simple newsletter.
Competitive markets have higher barriers to entry. However, in every market, there are underserved and underrepresented segments that may be using existing solutions due to limited options but are open to explore new products.
For instance, ConvertKit is an email marketing automation tool that was started in a competitive market just a few years ago and yet the company stood out and became one of today’s leaders. Why? Their position and mission to provide creators with all the needed tools to succeed and earn a living online attracted a growing group of users who had a lot of options with advanced solutions but decided to join this mission.
If you differentiate your solution through segmentation, you could start with a simpler app as long as it helps your users accomplish their goals even if it has ten percent of the features of competing products.
3. Startup Resources
This is obviously an important factor since while you may find it wiser to build an advanced product, you may not have the resources to fund it. In this case, remember that no matter the competition, one of the first steps in starting a startup is identifying your ideal buyer.
You could start by building and testing a simple app for this segment of the market that has the most urgent need for a superior solution and is most willing to change products. This means that you should take more time qualitatively and quantitatively validating your idea until you learn who exactly is most likely to use your product and how you can attract them to help you slowly but progressively build it through presales, feedback and referrals.
At the end of the day, if you know your buyers, their needs and expectations, you could build a simple but powerful solution just by focusing on the core feature(s) while ensuring a great user experience and interface. In conclusion, no matter the resources, there is always a way to start and be different.