Running a custom Software Development Agency is a blessing in disguise.
Running a custom Software Development Agency is a blessing in disguise. We hear many amazing product ideas on a daily basis. The potential of these ideas changing the world is amazing.
It is so common for us to find entrepreneurs with some unique ideas on a near daily basis. The ingenuity of the human mind never ceases to amaze us. What’s amazing about these ideas is that they transcend age, race, nationalities or one’s professional background.
Human beings are amazing idea generators. If they can nurture that skill, they can reap significant rewards.
Almost every time someone comes up to us with a product idea, the entrepreneur in us is tempted to start building the product right away.
That may sound like the most obvious thing to do, but evidence is stacked against using that approach.
A more saner approach involves following some of the steps listed here to codify, and more importantly, internalize your idea. While these are not the rules set in stone (as with everything else), following these will definitely help in increasing your chances of building great products.
Start with WHY?
It’s amazing how many entrepreneurs get carried away with their idea and are still unable to answer the WHY behind it.
- Why does your product exist?
- What problem does it solve?
- Is it solving a REAL problem?
- Or more simply put, is it a PAINKILLER? Or a VITAMIN? Remember, vitamins don’t sell as much as painkillers do.
- Why would someone use it?
- Will it make their day if they use your product? Will they look forward to using it on daily basis? Or will it be forgotten after a few days? How will it help them get through their day? Will if positively impact their lives? Does it change the industry?
These among many others are important questions to ask.
Why build it now?
If you don’t build it NOW, will someone else be able to capture this unmet need? Are there political, legal or societal forces driving the need to use your product now? Are we at the intersection of technology and awareness to drive your product growth rapidly at this moment? Can you wait for a year to build it? Are you too late? Too early?
Why do YOU want to build it?
YOU are going to be the most critical element in this process. Are you sure YOU know WHY you want to build this product? Why YOU specifically?
Are you in a place where you can devote the type of time necessary to build this product? Some products take a minimum of 2–3 years before they take off (unless stars really align).
Are you willing to make that sacrifice? Is your family in line with you? Have you discussed this with your spouse/significant other?
These are some serious questions that peel off the layers and let you get deep in to the core of it. We recommend that you ask these questions on a near daily basis. More importantly, take notes.
These questions not only validate your idea but also truly let you internalize the reasons for building this product.
As with any business, there will be hard times, and you have to know your WHY clearly to be able to see this through. Having a solid WHY will not only make you stronger, but will give you that much needed drive to build this product.
Research Your Market
Too many amazing products have failed in the marketplace because inventors didn’t take the time to research the market. You may have the best product idea, but if you don’t have a large target market for it, chances are it won’t do great. Some of the things you should look into:
How big is the target market?
This is the single most important factor to consider when building a product. If there’s no room for growth, even the best product may not survive the market.
Are you in a niche market?
Niches win riches. Period. If you try to build something for everyone, you end up building something that works for no one.
What price is the market willing to pay for your product?
Too many products are not priced depending on market demand. Some products are priced too high, some too low. Some are free when they shouldn’t be. Some are paid when they should be free. Either way, most don’t sell because of this price-to-value mismatch.
Do people really want your product?
Again, the market is the best decision maker when it comes to wanting your product (or not).
Here are some steps that will guide you in the research process:
- Talk to your friends, your Starbucks barista, your fitness instructor and everyone else you can, about your product. No one will steal your idea, just go out and talk with people to see what they think. Chances are they will give you some of the most valuable advice you will need before and during your product launch.
- Setup a landing page for your product. You can use LeadPages, Unbounce or any other landing pages builder to quickly help you build a great looking page. Put some nice images and copy to promote your product. Bonus Points: Setup Instagram, Twitter, Twitch to do some quick social media marketing. Crazy Kudos Points: If you make high quality Video Content.
- Add Google Analytics to the page, identify keywords that people look for when searching your product, run a small campaign worth $100-$500 (either on Facebook or Google). If you think that’s too high, wait till you spend over $200K only to find out you don’t get any customers because you misjudged the market.
- Collect Email Addresses of interested customers, politely ask them further questions about things they would like to see in your product, through surveys and similar questionnaires, help them become champions of your product. See if they can invite other friends to like your product. Start building a tribe.
If your research tells you that you’re on to something and you’ve got a high interest, its GAME ON.
Indicators of Interest (IOI) in increasing order are:
- Heavy Traffic – for your keywords
- Low Bounce Rates i.e. people are actually reading your content and any other FAQ etc. you have setup
- Email Signups — this means people are really interested in using your product
- Survey Answers — the higher the conversions, the more the interest
- Social Media Chatter — People are talking about this product on social media. Do you have any followers? Have you seen a rapid increase in followers?
These are some pretty good reasons to proceed to the next step in the process.
- If you haven’t already heard about it, use the Business Model Canvas to quickly get a high level overview of your idea and related metrics.
- Read Noah Kagan’s advice in building a million dollar product on the Tim Ferriss blog here.
Now that you have evaluated your market, it is time to raise capital.
You may have your own money saved, now is the time to put it to good use.
Find friends and family and talk to them about your idea in a more meaningful manner now.
Show them the results of your experiments, the level of interest you have acquired, quantify the opportunity and build your investment thesis.
You can also find angel investors at (www.angel.co) if you want a VC style funding. Local angels are probably the best and most of them want to see some traction before they invest, so your best bet will always be the ‘friends and family round’ as they call it. You might get lucky though, so never give up on speaking with angels.
SIDEBAR: Most investors are extremely risk averse. You’d think that may not be the case, but it is. So unless you have a proven track record, or are extremely active in the tech community, or have in-depth industry experience, do not expect to be funded unless you have solid traction, a working product (no matter how minimal) and/or good partnerships lined up.
Develop a Proof-of-Concept (POC)/ Minimum Viable Product (MVP)
If you’re building hardware, look east. Alibaba is probably your best bet to find suppliers. There are tons of resources out there. We won’t get into that as we’re software builders.
If you’re building Software, that’s when you need software development agencies like us. Another alternative is to find a CTO/co-founder who will help you in building the software. There are pros and cons to each approach.
As an agency, we love customers who have done all their due diligence over a period of time and come to us with all of the necessary metrics for building their product.
While we offer to do all of the market research on our customers’ behalf, and will gladly charge your for it, we find that the best customers are the ones who have done their homework and have quantifiable metrics to support their idea. It makes our job as a development agency much easier.
We will probably do a quick discovery with you to understand your product, the roadmap, the market and then evaluate branding options (if you haven’t already done that) to position your product.
While we’re a software company, we work with some of the leading agencies to assist us with this process. Alternatively, you are free to choose your own branding agency and have them work with us. But a great brand speaks volumes to the masses.
How much money do I need for MVP?
A lot depends on the type of the product you are building. A simple software solution may not cost as much as some really drawn out products that need tons of features to enter a saturated market to garner interest. We will talk about these in our case studies below.
By now, you should also know if your product is one for Venture Capital or are you good with smaller investment/bootstrapped capital?
These things matter because if your product needs VC, your MVP needs to be aligned to seek capital and for rapid growth, whereas if you are bootstrapping, you need to build a product that pays your bills and lets you build further aka ‘slow but steady growth’.
The strategies for building a product to raise VC funding are completely different from that of a bootstrapped product. Although, we know for a fact that every VC loves a company that has traction and does not need money.
And so, the time has come to take your MVP to market. This is just the beginning. An entire book can be written on your Go-To Market strategy. Depending on your product vertical, you can leverage a few plays to launch your product right.
Here are a few things you need to consider:
- Inbound Marketing Campaigns — Solid Video & Blog Content
- Announcements on Partner Networks (Meet-ups, Niche Blogs, Product Discovery Networks, audio/video promotions, podcasts (?))
- Trade shows — an expensive option, but can work wonders if you have your strategies setup correctly.
If you hadn’t set aside some capital for your go-to market strategy, you’ve made a terrible mistake.
We always recommend our clients to keep at least 30–40% of their overall funds for marketing.
This may sound ridiculous, but it is absolutely necessary or your product will be DOA (Dead On Arrival). There are alternative strategies to do this at lower costs and a lot depends on how willing you are to put in the effort into marketing.
P.S. — At this point, it would be fair to say, if you don’t learn marketing yourself, you’re setting yourself up for failure.
Majority of your product development will start after you go live and you have customers asking you for new features.
This is the norm unless you are entering a brand new space or have absolute insights on what your customers really want (which may be true for a B2B product, but definitely not for B2C).
You will need to iterate and refine on a near daily basis (depending on the success of your launch) until you have stabilized your product.
Too many clients of ours throw their hands up when they find that the product they built doesn’t meet the needs of the market.
A lot of this can be minimized by in-depth product-market research, but the industry changes so fast, that iteration is the only way forward.
It is our job to educate the clients on their budgets, product roadmaps and marketing strategies that augment product development.
As a client, it wouldn’t hurt to learn basic internet marketing, copywriting, Google and FB Ad Management etc. By learning these things, you can reduce your expenses significantly.
At this point, you as a CEO should only be talking to potential customers and investors and reporting feedback to your team. This should be your only job.
With a lot of planning, and execution, your product will soon find a sweet spot and address an unmet need in the market place.
What’s Next? Case Studies Of Course
If you really enjoyed reading this post, wait till you read our case studies on these exact philosophies!