Successfully launching startup app ideas is solely dependent on entrepreneurs’ continuous search for … [+]
Successfully launching startup app ideas is solely dependent on entrepreneurs’ continuous search for answers. One important question can have one answer today and a completely different one at a different stage. The only way to succeed is to figure things out as you go because not even years of research and planning will get you all the answers up front. For your reference, here are 11 of the most asked questions about launching startup app ideas.
1. How Do I Fund My Startup App Idea?
Only a fraction of startups is funded by investors. Most startups are self-funded. The short answer to this question is, use your own funds to start and validate your idea which will make your job attracting investors a lot easier.
Unless you can raise funds from family and friends, angel investors and venture capitals will require traction and validation before committing. Alternatively, you can participate in startup competitions, apply for grants and startup incubators.
It can take over a year to close a round of funding. Conditioning startup execution and progress on investments will slow you down. Use your resources to start and fund your venture for as long as you can. You may never need investors if you are customer funded.
2. When Should I Raise Funds For My Idea?
It may take you hundreds of NOs to get a YES. As noted earlier, for an early-stage startup, this can mean over a year of weekly investor outreach, meetings, pitches and negotiations. Therefore, if you want to raise funds as soon as possible, you may have to start now. Fundraising is like a part-time job.
Generally, the sooner you sell equity in your startup, the more money you risk leaving on the table. In other words, you may be selling yourself too short. This is especially true for early-stage startups that have ample room for progress before reaching big hurdles that might require funding and more support.
Therefore, if you can, delay fundraising for as long as possible unless there is an urgent need for funds such as acquiring a competing product or an indispensable asset.
How committed are you? This is a deal breaker for investors. If you are running a startup part-time and don’t plan on leaving your job or other responsibilities, you will find it hard to convince investors who are betting on you to generate high returns with their funds. In this case, bootstrapping (self-funding) is your best funding channel.
3. How Do I Make Sure I Don’t Waste My Funds In An Idea That Won’t Succeed?
The short answer to this question is by only investing if you can prove the potential of the idea. The question becomes, how do I prove my app idea before investing in building an app? If you follow this checklist, you will have all the insights you need to make an educated decision about the viability and validity of the idea and how to make it successful, at least the first stages before you run into new challenges.
- I interviewed over 100 potential users about their needs and expectations.
- I used the insights I gathered from the interviews to create design prototypes.
- I created an irresistible presale offer based on customer insights.
- A few people bought this offer.
- I designed a non-scalable approach to serve those buyers before building an app.
- I used the insights I gathered from serving customers to define app features.
- I only built the core features of the app to test the riskiest assumptions.
Those steps are essentially designed for you to make costly mistakes early on instead of waiting until the app is built and launched to learn if it will succeed or fail. This is also how future buyers can provide you with key insights for building an app they will use and pay for.
In fact, just the first step can be enough to find out if it’s a needed solution, who your ideal customer is and how the app should look and function. If you do it right, you may also generate revenue even before building the app which will help you fund it.
4. Do I Build A Web Or Mobile App?
This will mainly depend on your idea, however, most of the time, it is faster and cheaper to start with a mobile friendly web app to test your key hypotheses. In general, some of the things to consider for choosing between web or mobile are:
- How your users prefer to access your solution. The answer to this question can be found through customer interviews and by studying competing products. For instance, social apps are best accessed through a mobile app.
- Is one of the key benefits of using your product access to data for reporting, analytics and analysis? In this case, a web app may be a better option.
- Does your solution depend on users’ location? Mobile apps are a better fit.
- How often will users need the solution? Small but frequent use of the product like instant messaging may be better accessed through a mobile app.
5. How Do I Decide Which Features To Include In My App?
Before launch, first, use competitors’ products to list the core features. Those are the must-have features, what users really need to solve the problem they are using the product for. Second, use customer interviews to evaluate those features and how your product will be different.
With a launched app, first, leverage the data you gather from app use to analyze user behavior. This will reveal hidden insights that will help you connect the dots about what users say and actually do. Second, use a feature request board that allows your customers to share feature ideas and suggestions. A product like Productboard can help you make it easy for people to contribute.
Additionally, think about how you can test a feature before you build it. For instance, you could add a feature button that when clicked asks the users why they’d be interested in it if they find it important at all. A/B tests are another quick and effective way to test ideas.
6. How Do I Monetize My Idea?
Just like app features, deciding how your app will make money starts by analyzing the competition. Competing products will serve as a revenue model benchmark while customer interviews will reveal insights for innovation potential through the implementation of different models. Some of the most common revenue models include:
- On-demand. Your app will make money for every completed transaction as in the example of Uber.
- Marketplace apps generate revenue for facilitating transactions between supply and demand. For example, Airbnb gets a cut for connecting guests with hosts.
- Membership sites charge a fee for access to certain benefits. Netflix and Dollar Shave Club are two examples of membership sites.
- Software as a Service platforms grant users license to use a product under a subscription. Zoom and Shopify are SaaS startups.
- E-commerce companies generate revenue for every item sold.
7. How Can I Differentiate My Idea From The Competition?
Pricing, segmentation and product are three ways startups can differentiate their solutions from the competition. A better pricing strategy doesn’t necessarily mean selling a product at a cheaper price. You could also align pricing with performance or charge per use. If the numbers add up, this could help you attract competitors’ customers.
Pricing alone is not an effective advantage unless you have a unique way of delivering the solution. In manufacturing, it could be innovative machinery or exclusivity with key suppliers. Furthermore, pricing alone will not attract the customer if the product is not good enough to justify their switching cost.
To build a better product, you don’t necessarily need to compete on features. Differentiation through segmentation or positioning is an effective way to stand out in a crowded space. If competitors are building a product that serves many segments, perhaps you can introduce a similar solution tailored to a specific segment who might have other needs that are not worth addressing by existing players.
Social media companies like Facebook, LinkedIn and Instagram are very hard to compete with not because of product innovation. Their massive network and viral content differentiate them from anyone trying to start a competing product. If you are creating a solution that can attract and grow a large number of users quickly, the network effect is another competitive advantage.
8. Who Do I Need To Hire To Build My App?
There are many programmers who can help you build an app, what you should be looking for is those who can help you build a startup. No matter how complicated the app is, development is the easy part. At the end of the day, a talented programmer or team can turn any idea into a functional app. However, applications that work and look good don’t guarantee startup success. In fact, there are tens of thousands of great apps that only have a few users.
The journey to building a successful startup can be messy. Especially in the early stages, it’s not uncommon to change directions frequently. As such, look for entrepreneurial programmers who have had exposure to building startups either with their own projects or by working with startup founders.
What makes this group of partners unique is their contribution as app developers as well as guides in helping you translate data and customer insights into features and roadmaps with higher probability of success while being prepared and open for changes at any time. Finally, it is an effective way for you to turn this partnership into a co-founding relationship.
9. Where Do I Find The Right Team Members?
Freelancing sites, online and in-person communities, and outreach are three effective channels to connect with the right team or person. One of the biggest advantages of freelancing sites is speed. To find entrepreneurial programmers, startup communities and outreach may be better channels.
Don’t hesitate to share your story in communities like Indie Hackers, LinkedIn and Twitter. You’d be surprised how many people are looking for entrepreneurs to work with. Through those sites, you can also create a list of people you want to privately reach out to, especially those who have shown interest in new ventures through their profile and posts.
10. Can Recruits Steal My App Idea?
In my opinion, ideas account for less than 1% of startup success. Turning those ideas into successful ventures is the hard part and if someone steals your idea, they should be prepared to give it their blood, sweat and tears for years. This also means they’ll have to invest resources and put aside other projects and priorities.
So, technically, Yes, anyone you share your idea with can use it but what are the odds they’re going to turn it into a successful business? Therefore, in my opinion, don’t be afraid to share your vision with the world not just recruits.
11. How Can I Sell My Startup?
Direct and indirect competitors are only a small group of potential buyers of your startup. In fact, most startups are acquired by private equity firms and independent investors. If you build a sustainable business and want to sell it, you can reach out to private equity firms and online marketplaces. They will help you find a buyer.
The most important thing is to be honest with yourself and goals. If you want to start and run your venture on the side with a goal to sell it for a profit, do that. If you want to build the next big thing and you are willing to fully commit to its success, do it.
Every path has a destination, you get to choose yours. No matter what you like to do, follow through to the end. Longevity is the key to startup success.