I’ve had a book idea for over a year now.
It’s for kids, about managing emotions, and written in the no-fluff, heart-wrenching style of Kate DiCamillo.
When it’s published, counselors will praise it for the complex and valuable lessons it teaches. Adults will read it and cry, imagining the little girl or boy still inside them. The New York Times will compare it to Mr. Rogers and call for an interview. I’ll chew my lip and tap my pen and say, “Oh, I’m really busy working on my second novel right now, but I might could do next Thursday.”
I’ve bought books on plot development. I have advice from Stephen King stashed in a corner on my desk. I’ve analyzed other authors' finished products. You know what I haven’t done?
Put a single word on paper.
It’s easy to do this with app ideas too. To fantasize about rave customer reviews, the revenue they’ll bring in, and fresh business cards with “CEO” stamped on them.
And that’s exactly what a lot of advice helps you do—fantasize. Imagine. Daydream with no clear path forward. Or help you buy a book.
That isn’t this advice.
But it isn’t a magic formula or silver bullet strategy either. Those rarely (ever?) work. We’ve helped enough founders build profitable apps to know no success appears overnight, no idea works out of the gate, and no progress happens without hard work.
Instead, we’ve outlined some of the head knowledge you need to build an app. And then more importantly, what you can actually do with that knowledge to move beyond the idea stage and start figuring out your product.
Here’s what we cover:
- How to build strong hypotheses instead of weak ideas
- Why talking with customers is more important than NDAs
- What prototypes you can build to gather data...even if you don’t know code
- How to compare options for outsourcing a full app build
- Where to find money if you need funding
You’ll find this useful if you’re a founder, meddler, or creative with a nagging app idea. The advice below is particularly geared toward someone who doesn’t know code and hasn’t started a tech company before, but the principles apply to technical and well-worn founders as well.
“So, I have a great idea for an app.”
Here’s the thing: so do a lot of other people. But there’s one way you can immediately get ahead of them. You can start viewing your idea as a hypothesis. This is the difference:
An idea is something you fall in love with then die on an expensive hill trying to pursue, build, and protect. A hypothesis is something you test, measure, and adapt in order to learn how to build your product.
In other words, an idea will make one hell of a “how I blew $135,000” post-mortem on Medium. But a hypothesis will get you closer to building a legit business. It will help you quickly learn and figure out what you don’t know. Which, by the way, is how you make progress.
What makes a good hypothesis
Right now, there’s a lot you can’t prove about your app idea. You don’t know for sure if people will pay for it. You don’t know if you have the right target market, and you’re unsure if you can build a business around it. It’s okay you don’t know these things, as long as you try and figure them out.
A good hypothesis will help you start solving these riddles. It’ll be:
- Measurable: you can collect some type of qualitative or quantitative data to test it
- Provable: you can prove or disprove your hypothesis with the data you collect
- Specific: you drill down into who and what, but you’re not overly granular
- Relevant: you’re testing something that really matters—a big “I don’t know” that could upend the whole thing (e.g. “I don’t know if people want this”)
If this is triggering some science fair PTSD, rest assured you don’t need any volcanoes, super glue, or tri-folds. What you do need is pen, paper, and some brain power.
Action item #1: write your product hypothesis
Use the formula below as a starting point. It’s not the only one that works (did we mention we don’t believe in silver bullets?), but it’ll get you started.
If we [specific action]
by [specific method]
we’ll see [outcome]
for [specific group of people].
Here are two teardowns for more help thinking through this.
1. People need a version of Goodreads that doesn’t suck. I agree, but this hypothesis sucks because it’s neither measurable nor specific. A stronger hypothesis might look like: If we announce a Goodreads alternative on Product Hunt, we’ll get 100 signups from avid readers who are frustrated with the Goodreads platform.
The updated version is specific, measurable, provable, and gets at the most important question you can ask for a software product: “Is this even something people want?”
2. Because remote employees are lonely, they’ll pay to join a private community. This is better than the previous starting point. It’s measurable and provable. But it’s not especially specific. Are we talking remote employees of mid or large-sized companies? Or independent contractors? Those are two very different groups. A better alternative might look like: If we offer a private Slack group to 25 independent and remote freelancers, they’ll pay a small fee to join and cite loneliness as the reason.
However, there’s a huge hidden assumption there. You’re assuming “independent freelancers are painfully lonely and can’t fill the void for free.” (This is not true for me.) Unless you have data to support that assumption, craft your hypothesis around freelancer loneliness.
Hold up, don’t I need to protect my idea first?
You mean your hypothesis? No, you don’t need to protect that, and you don’t need an NDA.
But what if—
Seriously, no. An NDA, for those who don’t know, is a Non Disclosure Agreement. It’s a legal way to ensure someone keeps their mouth shut about what you want to do. And it’s a horrible habit of first-time founders.* Why?
- Execution is (almost) everything. What you’re doing has 100x more value than what you’re thinking about doing. You rarely need to protect 3am revelations.
- Ideas change over time. If you’re smart and starting with a hypothesis, your idea will change rapidly. Updating an NDA every time it does is not the best use of your time and energy.
- Your inexperience is showing. Asking someone who isn’t your co-founder or employee to sign an NDA signals inexperience. It all but shouts, “hey I’m doing this for the first time and am scared to death.”
- You should be talking to as many people as possible. Most importantly, you should be talking with a lot of people. You need advice from other founders, qualitative feedback from potential customers, and encouraging support from friends and family. NDAs make those conversations harder and less likely—which means less and slower progress.
Instead of obsessing over who shouldn’t know about your idea, start obsessing over who should. Namely, your customers.
*There are some instances where an NDA is beneficial or necessary. But these are not the majority.
A short intro to talking with people who buy things
Before you go handing out pamphlets on the street or dialing Mom (we don’t recommend either here), this is what you need to know about interviewing people:
- They’re people. They like good conversations and hate spammy sales pitches.
- The most important person you can interview is a potential customer.
- They don’t care about you or your product. They care about solving their problems.
- Under no circumstance should you ask what they think of your idea hypothesis.
- If you’re doing more talking than listening, you’re doing it wrong.
The main goals of interviews are to identify painful problems, the context those problems happen in, and what solutions are valuable to customers.
The most important person you can interview is a potential customer.
To do this well, you need to foster a genuine and enjoyable conversation. Aka make it significantly less awkward than a Tinder date. And ask questions that get at your interview goals. For example:
- What does your day-to-day look like?
- What does success look like for you?
- What’s really hard about reaching success?
- How have you tried to solve that in the past?
- Have you paid anyone or purchased a product to solve that problem in the past?
These are just examples, but they all revolve around what life is like for your customers, how they want to be more awesome, and what they’ve tried to become more awesome. Key point: they revolve around the customer...not you.
This is just the tip of the customer research iceberg though, so here are some more resources to get you started:
- Corey Haine’s guide to customer research via Baremetrics
- How to validate your idea before you build anything
- How to interview customers via CustomerDevLabs
If you’re intimidated by this topic, know that we are too. And so are most founders if they’re honest. But here’s something else to chew on: when First Round Review compiled 950 submissions to create their 2019 State of Startups, they found community is the new competitive edge. In their words, “nearly 80% of founders reported building a community of users as important to their business, with 28% describing it as their moat and critical to success.”
If you want to understand what customers value and start building a community around your product, you have to talk with the people who will buy from you.
Action item #2: go talk with 5 potential customers
Write down who you think your customer is and what defines them.
- Are they a business or consumer?
- Where are they?
- What do they care about?
For example, “HR manager” isn’t half as useful as “HR manager in a company with less than 50 people trying to figure out how to scale hiring operations.”
Once you know who your audience is, go talk with them, and record their responses. Yeah, it’s nerve wracking and no, it won’t feel easy. But these scripts from Justin Wilcox will give you a great starting point. It’ll get easier, too, as you keep doing it.
Bonus: These interviews may give you enough data to prove or disprove your first hypothesis. If that happens, awesome! You’ve learned something valuable. Formulate a second hypothesis around your next riskiest assumption.
Is now a good time to tell you I can’t code?
Look, I appreciate the honesty. But neither can I and, unfortunately for the both of us, it’s no excuse. You rarely you need coding experience to test your initial hypotheses. Because interviewing customers and building prototypes? Neither of those require code.
Whaaaa? You can build a prototype type without coding?
Yes! I know because I’ve done it. It was difficult and took time, but it’s totally possible.
I experimented with a few no-code platforms when I built a prototype for a player management system. And no, I didn't cheat and ask for help from Krit's development team.
Hundreds of other non-technical founders have built no-code prototypes as well.
In case you’re not familiar with them, a prototype is an early artifact, or draft, of your product. It’s a preliminary version you can use test assumptions and make progress, before building a bigger and more expensive version. And there are more ways than ever to build these without code.
For example, without writing a single line of CSS or HTML, you can make a:
It takes some creativity, but you can use any of these to find customers, gauge how interested they are in a product, and start getting feedback.
Corey Haines built a job board for marketers (and is making money off of it) using Webflow, Typeform, and Google Sheets.
Steve Shulman used ye old Excel to build a prototype for his business intelligence tool, B3i. His customers now include Yale.
In fact, there are so many different ways to build a free, no-code prototype the question isn’t even can you build one. It’s which type makes the most sense to build. To figure that out, you need to go back to your hypothesis.
The question you’re asking will determine what kind of data you need to collect and what kind of prototype is the best collection tool. For more guidance, see our 5 examples of no-code prototypes.
Action item #3: identify a no-code prototype that will help you gather data
What kind of data do you need to collect to prove or disprove your hypothesis?
- If you need to gauge interest, consider creating a landing page and gathering signups. Or starting an email list around a specific topic.
- If you’re certain there’s interest and you need to figure out willingness to pay, maybe offering a consulting service or requesting pre-sales on a landing page make more sense.
Consider what data you need to collect and which prototypes could help you collect it. Then create one and share it with at least 5 more potential customers.
One word of caution here. Make sure you don’t waste months of time assessing interest because that’s only a starting point. Eventually, you have to find out if people are willing to pay. It’s intimidating to ask for money and that’s okay. Most things that intimidate you are opportunities for growth.
Most things that intimidate you are opportunities for growth.
What about when I’m ready to move beyond a prototype?
Say you genuinely need an app (not everyone does), and now have data to support interest, value, and customers' willingness to pay. If you don’t know how to code, you have a few options for outsourcing the next version of your product:
- Find a technical co-founder. Unless you have existing ideas on who that’d be, finding a suitable co-founder may also take years. It’s a worthwhile pursuit, but it’s often not an immediate solution.
- Build your own internal team. It’s possible to hire technical staff as a non-technical person, but it’s a risky challenge if you don’t have much traction or recurring revenue. When you bring on employees, you sign up for overhead (payroll, benefits, insurance), higher costs, and responsibility for those people. This may be a good solution if you have a ton of funding. Otherwise, it makes more sense later in the game.
- Work with freelancers. Quartz estimates there are over 56.7 million freelance workers in the US. Plenty of those could build your app for you. If you have a very clear idea what you’re building, this may be a great option. But if you need an entire team (project managers, UI/UX experts, and designers) at your disposal, this option becomes less feasible. Managing a team of independent freelancers is no walk in the park.
- Hire an agency. Agencies are more expensive than freelancers, but they provide an entire team of experts. For apps that require intense design, strategic feature development, and multiple developers, they’re a good outsourcing option. Plus, if you find a trustworthy one, they’ll often assign one point of contact that will help you navigate the entire project.
Keep in mind location and reputation will play a role in how much the last three cost. For example, an employee, freelancer, or agency in downtown Manhattan needs to cover higher expenses than, say, someone living where I do in Chattanooga, TN. (A one bedroom apartment here is about $1,000/mo. A one bedroom apartment in Manhattan is over $4,000.)
There are professional developers all over the world, so keep in mind global location influences price as well. Source: insights.stackoverflow.com/survey/2019
On top of that, someone with 5-10 years of experience will rightfully charge more than someone with 1 year of experience. Persons with certain skill sets or roles also command a higher rate. In the chart below, you don’t need to understand what each language means to grasp that some are more valuable than others.
Developers who use languages such as Go and Ruby command higher rates. Source: insights.stackoverflow.com/survey/2019
So, how much will building an app cost me?
The average project for us comes in around $50,000 to $100,000. Complex projects can run even higher. For example, when we looked at how much it’d cost to build a slimmed down version of Slack, we estimated it would cost over $150,000.
Could you get an app for cheaper? Sure. The price of your app is a function of who you hire and what you need to build. You can adjust either of those factors for a higher or lower price. But if the price of an app is already making you sweat, we recommend scaling back the scope (building a simpler product) instead of hiring low-quality developers. In the long run, you’ll often pay double for shoddy quality: once to build it, and again to fix it.
Action item #4: decide what actually needs to go in your app
One good way to narrow down how you build your app is to look at what needs to go in it. We call the process of figuring that out roadmapping. It’s the first step we take with any potential client, and we’ve publicly shared our process (with templates!) so you can replicate it.
Go through the roadmapping process, and figure out what needs to be in the first version of your app. This will help you assess which outsourcing option makes sense for you.
For the love of...where do I get all that money? #
While there is such a thing as a money tree, there’s no such thing as a tree that grows money. Sorry, we checked.
Pretty, affordable, and pet-friendly. But doesn’t grow actual cash. Source: https://www.thesill.com/products/money-tree-pachira-aquatica-1
So until we can use CRISPR to get trees fruiting crisp, hard cash, you have the following options:
- Self-funded: Save up all the money yourself. The benefit is you retain complete control and total equity. The downside is this will take a while.
- Bootstrapping: Sell a version of your product to customers. It’s a slower way to raise big funds, but it’s the best way to validate and refine your product. A variant of bootstrapping is productized consulting. It’s where you package high-value expertise into a fixed-price service, and it’s a great stepping stone to building a product.
- Crowdfunding: If you have a clear vision and product, you may be able to raise pre-sales money on crowdfunding platforms like Kickstarter. Several apps have successfully done this.
- Friends & Family: If you have well-off friends and relatives, they may be willing to chip in. You get money fast and it’s totally possible to go this route. However, dealing with family is risky business.
- Angel Investors: Angels invest their own money or pool money into a fund. Individual angels offer smaller funds, around $5k-$100k, whereas groups of angels can offer $100k-$3mm. Both invest in early-stage companies and some groups participate in Series A. Keep in mind, angels expect equity in exchange for their investment, and you’ll need more than an idea to receive their money. Here's our guide to finding them in the Southeast.
- Venture Capitalists (VCs): VCs invest money from a variety of sources, including corporations. They’re able to offer more capital than angels, north of $3mm, to later-stage companies. They’re normally involved in Series A, B, and C funding rounds. However, there’s a growing number of “micro-VCs” that offer smaller checks to seed companies. VCs also expect equity in exchange for their investment. You’ll need strong proof of ROI to receive money from VCs.
- Grants: Grants are interest-free. In fact, you don’t even pay them back. But you have more limitations on where you spend the money and most grants have very specific requirements. If you’re curious about this one, Fundera has a list of 107 verified grants for startups and small businesses to get you started.
- Loans: You’ll face interest rates ranging from 4-15%, but you’ll be able to spend the money where you want (compare to grants).
- Accelerators: The best ones are hard to get into and can be expensive in terms of equity. However, they also give you access to training, resources, mentorships, and credibility.
Founders hold strong opinions here and, admittedly, there’s a solid argument for each option. Our stance is this: take on as little debt as possible, don’t raise money from VCs if you don’t want to build a big business, and get real sales as soon as possible.
Action item #5: estimate your projected costs
Plug different numbers into this projections spreadsheet and get a feel for your projected costs. It’ll be an educated guess, but that’s better than a shot in the dark. Plus, it’ll get you asking some important questions.
One caveat to keep in mind: whatever you raise, you’ll spend. That’s true whether it’s $10,000 or $10,000,000.
Is this all I need to know? #
No. Turns out, building a valuable product for real customers is incredibly difficult. So difficult, we haven’t seen anyone turn it into a science. Variables like founder personality, economy, customer base, available technology, marketing strategies...these make every product journey unique.
The bad news is there’s no one formula you can follow to become a billionaire.
The good news is there are some levers—like talking with customers, testing what you don’t know, and outsourcing weaknesses—the most successful founders use to build not just one, but multiple companies. That’s where the action items above all come from.
Most people with ideas? They’re still bookmarking popular think pieces and bias-tinted “how I done it”s to read this weekend.
That doesn’t have to be you.
Take any of the steps above, and you’ll be light years past “just thinking about it.”
👉 Want more no-BS, action-oriented content like this? Check out our newsletter. We serve up good stuff every Wednesday.