Everyone gets ideas for a “killer app” now and then.
“Hey, wouldn’t it be cool if….”
You’ve probably had moments like that around the water cooler yourself.
But how do you evaluate an app idea?
We all know that great ideas do not always translate into great results. And if you’re not already building mobile applications (and sometimes even if you are), evaluating which ones will produce the outcomes you’re looking for can be a tricky business.
Problems arise when companies move forward on their app ideas without fully vetting them. They evaluate the business needs, but not the total technology footprint required.
Sometimes the available technologies simply don’t work exactly the way they want them to. And sometimes their users don’t respond or react in the ways they expect.
Both of these problems can cause killer apps to torpedo their companies instead.
In a moment, I’m going to share with you five things you need to understand in order to evaluate an app idea. But first, I want to start with a pair of fundamental skills you need before you should even start your valuation.
Two Key Foundations for Evaluating An App
1. Expertise in building mobile applications
You can’t evaluate an app idea without a thorough working knowledge of mobile technologies. Sure, you can tell if your business concept is sound, but that’s only half the battle. Just as important are questions such as:
- How long will this take?
- What resources, personnel and infrastructure will I need?
- Who will maintain and support this?
You can’t answer those questions accurately if you’ve never built a mobile application before (or if you’re still relatively new to it). And you need those answers, of course, for a proper evaluation of your app idea.
The problem most companies run into is when they rely on the inputs of their own professional and highly-skilled development teams – but who have no direct experience in building mobile applications.
Estimating your costs and timelines, for example, can be very different when working with mobile development frameworks than with most traditional project methods. If those estimates aren’t accurate, your evaluation won’t be either.
Sometimes it takes a specialist in mobile technology to account for all the little tech details you’ll need to address when building a mobile app. Ascendle offers free consultations as well as coaching, and is always happy to help with evaluating app ideas.
2. Market and customer/user research
Like any business proposition, you should always perform your due diligence when it comes to market research. IBM suggests a value vs. uniqueness grid as a first step toward judging market acceptance of an app.
Beyond that, you’ll want to gain a thorough knowledge of your ideal users’ mobile activities. Who they follow and interact with online, what platforms they use for both hardware and social media, and which apps they make frequent use of are just a few of the questions you’ll want to investigate before proceeding.
5 Things You Must Understand to Evaluate an App
So now, let’s assume you have the ability to analyze the technology and market requirements of your app – or you’ve hired an experienced third-party to help. It’s time to evaluate the app idea itself.
Here, I’ve broken down five things you must understand in order to properly evaluate an app.
1. Understand Your Goal
What exactly do you want to accomplish with this application? Make sure your goals are as specific as possible. This can be challenging, because there’s a tendency to think that new technology will magically “explode” your business. Obviously, things aren’t that simple.
Good market research will help you set realistic goals. And realistic goals are essential for creating a practical evaluation of your idea.
2. Understand the Technology
I touched on this above, but it bears mentioning here again. The better you understand the technologies involved – all the technologies, not just the application code – the better your app evaluation will be. Make sure to consult with experienced mobile app development professionals – with track records of successful mobile implementations – whether you find them inside your organization or not.
Even if you possess a capable mobile development team, enlisting third-party mobile experts such as Ascendle to validate project plans and offer feedback, is worth recommending at this stage.
3. Understand the Costs
You need to put everything you’ve learned together to estimate the total cost of your mobile app project. Again, the more specific you get, the better your app evaluation will be.
What initial funds will be required to get the project started? What assets will be needed, consumed, and/or depreciated? How will costs be spread over time? What will post-launch maintenance and support look like?
Even if your total cost estimate is accurate, the allocation and timing of those costs can make or break a project – so don’t base your evaluation on total cost alone.
4. Understand Your Rewards
By now, you’ve addressed the costs of your app idea. In the next section we’ll deal with risks. But what about rewards? After all, that’s the whole point of this “killer app” idea, isn’t it?
You set the groundwork for estimating rewards when you set the app’s goals, but now we need to dig a little deeper.
If you truly want to evaluate whether a mobile app is worth its costs and risks, you need to know how it will affect your bottom-line. Some rewards will be explicit in your goals, such as “convert X% of traffic into sales” or “reduce processing costs by $X per transaction.”
Others, like “improve sourcing agent efficiency by X%” might be harder to translate into revenues and profits. But you can do it. Take each predictable effect your app might have – in any area of your business – and estimate the impact to your P&L.
And, just like with costs, don’t assume revenues and rewards all occur at a single point. These will be spread out over time. But unlike costs, rewards are typically clustered later in the process. This can be extremely significant when evaluating an app.
5. Understand Your Risks
Your final decision, of course, will come down to a comparison of risks and rewards. So here’s where you need to address questions such as:
- What are your opportunity costs for building this app?
- How confident are you in the estimates and projections?
- Who provided the estimates and what’s their track record?
- What are your best and worst case scenarios?
- What obstacles and situations can you foresee that could potentially impact the project?
Risks aren’t built into your estimates – they’re the factors that cause your estimates to miss. So make sure to consider those risks seriously before moving forward.
Also, markets and technologies shift rapidly sometimes, so researching future trends in mobile technology as well as your vertical market is always a smart suggestion.
Are you Ready to Evaluate Your App Idea?
So are you ready to evaluate that idea?
It’s a big decision … make the wrong one, and you could be facing a profit-killer, rather than a killer app. So invest the time it takes to fully vet your app ideas. Make sure you understand the five things I shared above, and you’ll gain the information you need to make the right decision.
If you have any questions, concerns, or doubts, Ascendle is here and happy to help.
