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Here’s Why You Need To Do Market Research |

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Here’s Why You Need To Do Market Research


By  - January 15, 2015
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It is often said that the most important factor in determining the success of your app is traction. Loosely defined, traction refers to the amount of users who are using your app, or if it is still in early phases, how many people have voiced or committed some level interest in the solutions that your app provides.

 

There is an unfortunate reality that most of us  will simply not have the means a imagesto turn a great app idea into a worldwide phenomenon without the backing of investors. Even the most successful projects needed the help of the “big end of town” in order to really take off. Facebook, PayPal, Google, FourSquare – they all followed a similar road to fame that involved putting out their hand at some point to ask for cash in return for equity so they could see their ideas become the success stories that we all know about today.

 

Keep this in mind when you’re developing your app idea. You need to have something strong enough to appeal to these investors.

 

What is the Number 1 criteria that investors look for in your app idea?

Traction.

 

Here are my tips for planning and achieving  traction:

 

  1. Know your market

In my seminars, I call this your ‘universe.’ And the reason I like this term is because although the answer is unknown, scientists have been hypothesising for years that the universe is growing. So too is the market for your app. But that doesn’t mean you shouldn’t employ your best efforts to get a good idea!

downloadHow do you determine the size of your universe? This question largely depends on what market you are addressing. But here are some examples. If your app is for the healthcare industry, and you need to know how many doctors are in your country, then contact your healthcare union or industry association. If your app appeals to parents of newborns, grab some census data around how many children are born each year and run some calculations. You may need to drill further down depending how specific your group is.

Knowing your market is the starting place for identifying how many users your app can have.

2. Know your competitors and determine your ‘slice of the pie’

This step refers to determining how many people you can hope to attract. For example, if there are competing apps in your space, this may reduce your available market share. Also, if you notice that an industry leader has already captured, say, 30% of the market and it has taken them five years, that can give you an idea of how much work is required for you to achieve the same.

Determining your available market share will give you a realistic goal to set, including some time frames within which to achieve these. This is very important, because no investor will believe that you will ever take 100% of the available universe. Even Google hasn’t achieved this! That being said, if you are in a lucrative industry you only need a small percentage to be successful.

3. Before you build, talk to potential users

I can’t stress the importance of this enough. So many startups fail because they did not download (1)test their assumptions with real potential users. If your app is targeted at builders, please approach some and ask if they would use your app and what other features they might need, or what other systems they currently use to do the same tasks. Another trick here is to employ the same tactics as point 1, and speak to industry bodies. These are usually staffed by experts of the game and it is their role to provide new technologies to their members. Speaking to these people will also give you confidence that you are on the right track. If you aren’t on the right track, don’t feel bad! It’s better you learnt now than after you spent a fortune developing your product. Use the feedback to “pivot” (LINK: http://www.forbes.com/sites/martinzwilling/2012/01/21/a-smart-business-knows-8-ways-to-pivot-their-vision/) and work on your idea some more to see if you can get it right!

4. After you build, sell! Sell! Sell! or (give! Give! Give!)

The most important next step is to get people using your app. If this means opening it up to a small group of free users, then do so. People will support a great idea and will probably give you feedback (the good, the bad and the ugly) which is exactly what you need to keep improving and securing more users. The likelihood of releasing a perfect product the first round is about as slim as Google going broke tomorrow. You will need to keep changing your app to suit your customers’ needs, and you will only know what your customer’s need by asking them. Validating your product with a group of test users may be the perfect way to prove its worth.

 

These simple steps should lead you to down the path of defining some good ‘traction’ for your app. It’s not only good for investors, but also good to keep you at the top of your game and keep you confident that you are onto a winner.

 

Best of luck with your app adventures!

Here are some other articles you may find useful:

6 Lessons About Business I Learned On The StartUp Bus
How To Protect Your Big Idea
How To Pick The Best Team For Your Project

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