By now you should have a list of app ideas which needs whittling down to a single best app idea for you to pursue. As part of idea selection we’re going to systematically refine our list of ideas until we are left with one idea to develop and take to market. This doesn’t mean that we’re going to bin our other ideas, but more like we’re going to bank them until we need to revisit them. The idea here is to find the idea most likely to achieve our current goal.
Its really important here that you know your goals, and focus on the factors that achieve your goals, whilst refining your ideas.
Stage 1 – High Level Sweep
The first thing to do is weed out all the ideas that don’t address your core goals. For this stage we don’t want to have to do any major research – maybe we’ll do a few google searches, a few app store searches, ensure technical feasibility etc, but nothing that takes too long.
Just take each idea in in turn, and consider it against your goals…if it doesn’t address your goals in any way then remove it from your shortlist. For example, if your goal is to make money then reject ideas that have no obvious revenue streams, if your goals is to learn a new skill then reject ideas that focus on utilising existing skills.
You might also want to weed out idea that you don’t have a good gut feel for – its not scientific, but its definitely valid! This might for example, be because you just don’t like the idea, doesn’t fit with you ethically or doesn’t seem like good commercially. Do bare in mind 3 Things You Want in a Business Idea, That Everyone Thinks You Don’t, as you don’t want to throw away a great idea for the absolute wrong reason.
Ideally this exercise will take no more than an hour or two, and will leave you with no more than 6 ideas (the less the better). The next stage we’ll flesh out the business models and refine the list some more.
Stage 2 – Figure Out the Business Models
Now is a good time to start figuring out the business models for each of your shortlisted ideas. When people think of business models they often think about long written business plans that take days to complete – which is scary and unnecessary. Creating full written business plans for an app (and for any startup in my opinion) is a waste of time. We end up spending too much time doing detailed planning something in an environment that can total change at a moments notice, which is crazy! What we’re going to do is create a lean canvas for each of our ideas:
The lean canvas was created by Ash Maurya (influenced by Alex Osterwalder’s business model canvas) and is primarily used to quickly create business models without resorting to full blown business plans. We’re going to adapt the the lean canvas to help us quickly develop the business model for all of the ideas in our shortlist.
The lean canvas is incredibly useful and we’ll be using it in some detail here and throughout the app creation process. If you’d like to know more about the lean canvas then visit the Practice Trumps Theory Blog and/or read the Running Lean.
The canvas is useful, as it:
- Forces us to write down our business model
- Ensures we acknowledge areas that we might not have considered
- Highlights areas where we may have problems
- Helps us identify risks
See how to create a lean canvas for an app for more detail around how to create a lean canvas for each of your ideas.
Once you’ve got your lean canvases in hand, its time to scan over them an make some more high level assessments. As we still need to narrow down our idea list, it’s time to look over the canvases looking for any obvious problems or blockers that present a big enough risk that we can strike that an off the list (for now).
This doesn’t mean the idea is bad or that the problem/blocker cannot be overcome, but just that its enough of a question mark that we can bench the idea for now. Some examples of this could be:
- Solution: The solution may not even be feasible
- Cost Structure / Revenue Streams: Costs may be too high to make a profit on.
- Customer Segments: You have way to identify your customer segments
- Problem: It doesn’t actually solve a problem
These aren’t hard and fast rules, but more of a way to identify those ideas that can be put to one side for now. After this you should have no more than 3 ideas in the running and ideally have only 1 or 2 as the next stage involves more in-depth research.
Stage 3 – Research The Business Models
The next stage is really important as its where we’re going to do some more in-depth research on each of our business models to try and find early warning indicators (EWI). This stage acts like a risk analysis of your business model, where we do whatever research we can complete quickly. We’ll be mostly focusing one the following sections of the canvas:
- Channels: In my experience the channels element often represents one of the riskiest parts of a business model for app development.
- Problem: Identifying a real customer pain, and whether you can offer something better than the competition can often represent a huge risk / opportunity.
- Revenue Streams / Cost Structure: A common pitfall is not properly identifying a the money making aspects.
- Solution: The technical feasibility of an app is really important, particularly if it requires purchasing data / services which then have a knock-on effect to costs.
For each of the sections below we’re going to assign a score from 1 (poor) to 5(excellent) based on our research:
The main question we’re trying to answer here is ‘is there any indication that my app can succeed via this channel?’. For apps we are normally looking at one of the following primary sales channels (not the only sales channel, just the more common ones):
- Search engine results
- App store search engine results
It is very difficult to reliably identify risks for these channels, but there are some things we can do.
- Keyword competition research / competition analysis
- App store research / competition research
To start with we need to do some keyword research for our app. Researching app keywords can be really revealing, and can highlight important information for targeting your customers.
My keyword research for apps article provides a step by step guide on completing and documenting the research.
The results from your keyword research will be used in several places, but here we’re primarily using it to gauge channel viability. Just having the keywords isn’t enough, we now need to do a little competition analysis. To complete this you need to perform the following for each idea:
- From the keywords select your top 5 keywords for your given channel. This doesn’t have to be the 5 with the best results, just the 5 that you can see the biggest opportunity with. If you’re struggling to get 5 keywords, this might be a sign that the idea should be benched for now.
- Search across that given channel for each of these keywords and assess the competition – score each idea according to how accessible that channel feels.
Full details on ways you can complete competition analysis for every single channel is beyond the scope of this article. In future articles I’ll try to provide examples or case studies of how you could get some early warning indicators for specific channels. To get you started though the following gives some indication of things that will be useful:
- For App Stores be wary of large app developers such as King, Zynga, Facebook, Microsoft etc (A goog place to find this info is on the appdata website). Also be wary of results flooded with exact matches – this may still be an opportunity, but it means a lot of people are trying to target the keywords which will make it difficult to get found.
- For search results looking at the top ten sites page score; use a tool like majestic seo to get an idea about the number and quality of back-links; be wary of huge sites like wikipedia, youtube etc;
- Make a note of this score on each of your lean canvases in the channels sections, highlighting it as an early warning indicator.
Problem / Customer Segment
From a problem point of view we really want to know is whether the app we are planning to create solves a real problem, and potentially how big that problem is. This is very difficult to ascertain through desk based research, but we can gather whether people are searching for solutions to this problem.
Interviews are a great way to discover and investigate the problem aspect of your business model, but at this stage interviews would be too time consuming. We’re just trying to make a relatively quick decision about which idea to run with.
To score this section we should:
- Look at our keyword research search volumes results
- Look at reviews and blog articles about competitor apps / sites to identify if people are looking for something to solve this problem. Keep a particular eye out for people complaining about missing features.
- Search forums around the subject matter to see if people are trying to solve this problem.
You should then score your business models based on this research.
Revenue Streams / Cost Structure
We are again going to score our models, but this time what we base that score on is completely dependent on the solution you’re planning to develop. 2 things we could understand at this stage are:
- What are our costs going to be? Are there any large fixed costs?
- What are people paying our competitors? Are our customers happy to pay this? Is our pricing realistic?
Score your models in the revenue streams / cost structure sections as before. Some things that would cause me to mark a model down would be:
- The costs/revenue cannot be verified at all
- The costs are higher than the potential revenue
- There are large, up-front fixed costs
- Competitors are struggling to get people to pay, or are giving it away for free
As developers we often see the solution as the only thing we need to focus on, but this couldn’t be further from the truth when making an app. That said, its still can present some deal breaking early warning indicators. At this stage we want to score our models based on:
- Can the solution even be developed?
- Does the solution incur any additional costs that we haven’t accounted for?
- Does the solution require months of development before we can deliver anything?
Once you’ve looked at the solution we can then move on.
Stage 4 – Select the idea
After completing all this research you should be able to select the idea you’re going to move forward with.
In my experience the most important factors in app development are the channel and problem related elements. If you can’t get found you dont stand a chance, and if you’re not solving a real problem (or somebody already has the defacto solution) then you could be wasting your time.
On that basis I’d definitely weight towards those options with better scores in the problem and channel sections. Once you’ve selected your idea you should go over your business model one more time, ensuring its as fully completed as possible. Next we’ll need to highlight the riskiest parts of the model, and conduct experiments to address those risks.
I’m sure that my approach to idea generation and selection is quite different, so I’d love to hear from you regarding how you select the right idea to spend your time developing.