A brilliant idea is a key to the new startup success. However, competitive market realities demonstrate that successful startup strategy consists of several components and the idea is only one of them. In this article we’ll give you some useful lifehacks and a working formula of how to bring your brilliant idea to life on a budget.
Following these simple guidelines will keep you away from many pitfalls along the way.
Make sure that the market really demands your app. In other words, define Product/market fit. Before going any further we want you to answer the following questions:
- What problem does your app solve?
- Does the market really need it?
- Are you sure you can find the target audience for you app?
- Is it the right time to launch your product? Maybe you’re ahead of your time and the market is not yet ready for it
The goal of market research is to determine what value can you offer to your prospective users. By the way, someone may have already implemented your brilliant idea. The your target is to find unique advantage that will differentiate your product over competitors.
You can start surveying your family, friends and colleagues. Listen to what they have to say about your idea, oftentimes their opinion will help you stay on the right track. However, it’s necessary to reach out wider audience and speak to the total strangers, people who doesn’t know you personally and who are not afraid to hurt your feelings when expressing their views.
Gathering More FeedbackIn fact, you’ll never know whether your app will be accepted by the target audience until they start using it. You can gather feedback from the market and assess market demand by creating an MVP or prototype version of your application (see further below).
Developing an MVP
You will need to validate your business idea with your MVP when approaching potential investors, which is our next step.
Sources for Funding
You have an idea for an app, you’ve performed a thorough market research and created the business plan and the MVP.
Luckily there are dozens of options to finance a brand-new business. You can choose which type of funding is right for you and if it won’t work out you just move on to another and try your luck there. This is a list of the most proven methods:
- Private investors. One of the most popular ways for raising startup capital is finding a private investor (also called an Angel Investor or a Venture Capitalist). Angel investors and Venture Capitalists offer different business engagement models but the idea is the same – invest in your project in return for a share. Business Angels are a more preferable source of funding at an early stage (seed stage). There are many online platforms that will help you out with finding a private investor, such as AngelList or Gust;
- Crowdfunding. Simply put, crowdfunding allows to raise capital by asking a large group of people via social media and crowdfunding platforms to contribute a small amount of money. Crowdfunding is the most vulnerable to idea theft because it requires entrepreneurs to share ideas with the public. However, it is the most popular and the easiest way to get funded especially for small businesses. Sharing business ideas with the public allows to quickly test the market and gather customer feedback.Here you will find a list of the top 10 crowdfunding sites.
- Grants and loans from private foundations and government agencies. For example, the U.S. Small Business Administration (SBA) provides microloans up to $50,000 for small businesses. If you’re not a USA citizen try to find similar financial institution in your country backed by the Government;
- Bank loan. Usually banks are the first place that entrepreneurs turn to when thinking about funding, but it’s very difficult to get approved and in most cases, they are turned down. And even if you get a loan it is very hard to secure it. A loan from bank involves the usual process of sharing the business plan and the estimated budget;
- Friends or family. Borrowing from friends and family may not be a good idea because it may ruin your relationship with them in the case of failure. But it is what it is, according to research, 36% of funding for startups comes from family and friends.
Small notice: You may be tempted to ask your investor to sign an NDA (Non-disclosure Agreement). We must warn you that most investors don’t like signing NDAs and in most cases they won’t. Asking to sign an NDA may actually damage your reputation and credibility. But don’t worry about it. Read this post by Alexander Jarvis, a Chief Operating Officer at Taiger, where he explains in detail why signing NDA with your potential investor is a bad idea and you shouldn’t do it.
Now is the time to start developing an initial version of the application with a limited set of functionalities based on the MVP created earlier. Create an app just for one popular platform (iOS or Android), get it to market as soon as possible and see how the market will accept that prototype version.
If the prototype version gains recognition by the target audience and survives in the market then keep going. Start gradually adding other features with each development cycle. This methodology is called Agile.
By using iterative and incremental development you can be sure that in case your project fails, it will fail at an early stage of development and at minimum costs.
- Agile vs Waterfall Project Management: Which one to choose?
- Agile Offshore Software Development: Best Practices
- Agile Communication Tools for Working With Virtual Teams
Development is the most responsive stage of your startup endeavor where the majority of funds will be spent, so don’t save it. Everything else can be sacrificed, but not the development! You need to find experienced professionals. Bad user interface design and poor performance can just bury once and for all your brilliant idea.
Managing Resources: Is It Possible to Reduce Costs without Losing Quality?
Keep track of your resources to avoid a situation where you just run out of money, which is the most common reason for startup failures.
The best way to significantly reduce costs without losing quality is to resort to outsourcing.
What roles can be outsourced at early startup stages?
You should outsource tactical roles, but not strategical. Strategical roles are the startup CXO’s, product managers etc. – decision-making people. Tactical – they are your employees such as developers, designers, testers and project managers. They perform necessary tasks for you but aren’t responsible for overall strategy.
Well-established outsourcing companies offer fully staffed and dedicated teams of developers. There are many other benefits of outsourcing except saving money. Here at Eastern Peak you can choose from a full range of engagement models and recruit a remote team of developers that will best suit your business needs.
When choosing an outsourcing provider you should know:
- How to Protect Your Idea and End Product When Outsourcing Software Development
- 10 Questions To Ask App Developers Before You Hire Them
A good marketing campaign should start as early as possible to get initial traction. In the early stages of development it doesn’t require a lot of money and you can do it on your own. Advertise your product whenever and wherever you can, all shots are allowed here: social media and content marketing, Google/FB ads, emails, creating a landing page for your product, teaming up with other startups, launching parties, etc. Engage with the customers, get their feedback, use it to modify your product.
One thing you must keep in mind is that scalable development of your product also means a scalable marketing campaign. Be prepared for gradual growth and expansion of your business. Only after your business has firmly established itself and starts getting serious traction it is time to start invest heavily in marketing.