Know your (Tech) Idea Inside Out

Whether you are planning on entering the B2B or B2C market, know the vision of your product, know how you want to interact with your customer, know how the your product and service will benefit the user, and lastly know the vision of the product will manifest into the design and development of a product.

Unless you happen to be a software developer and or a UX Designer, there will be limitations in developing your tech idea. In such a scenario, whether you opt to work with a Dev Company or a Freelancer, the points mentioned above need to be very carefully considered and kept in mind before and during the development. The reason being, it will affect the time and money spent in developing your product/service.
Furthermore, nobody knows your idea better than yourself, create an effective Business Plan, know your Market, know your Product/Service, know your Vision & Mission, know the ROI, Acquire Capital, have a Development (Project Management) Plan, and lastly have an Operations Plan.

In the following sections, we’ll cover the above points in greater details.

Market Research and your Product/Service Offering

Your idea may be good in theory, but is it really sellable?
Traditionally, market research sheds much light to determine if there is a market for your idea – the product you want to develop or the service you want to offer. However, a market may not exist yet for your idea just because it hasn’t been realized yet – at times, risks are necessary. When Apple created the iPhone, a market did not exist yet for smartphones nor did smartphones exist, they created both. Microsoft on the other hand undertook extensive market research and concluded that a market did not exist. What subsequently followed was Microsoft failing to capture the smartphone market.

Similarly, a market may not exist for what you’d like to develop but you can certainly still do market research to discover if a market can be created for such things.

B2B or B2C

Is your product intended for business and industry verticals or for consumers? What market segment of the industry will if cater to? Businesses need solutions providing ROI and or improving (internal or external) operations. Consumers will opt for products and services that may not necessarily fulfill any needs – perhaps provide convenience or entertainment. The crux being what businesses and consumers see value in is different.

B2B

If you are opting to create a solution for businesses, understand the industry well –

• What are their pain points? – Precisely determine what issues and pain points you are trying to resolve. How are those pain points affecting your market segment. Ensure that you develop a workflow for addressing pain point resolution.
• What will be the ROI for the businesses? – How will your clients benefit from the pain points resolution? Ultimately, businesses want to earn and or save from investing in your solution, if they cannot achieve that, then they are wasting their time and money.
  • Will it improve productivity or efficiency?
    • If so, then will it reduce expenses?
    • How will it achieve this?
  • Will it increase sales?
    • If so, then by how much?
    • How will sales be increased?
  • How will you earn – What is your pricing plan to earn from your solution?
    • Subscription
    • Licensing

B2C

Developing products or services for consumers is drastically different (there are some overlaps where a product or service can meet the needs of organizations and consumers). Consumer market is more dynamic with shifting market demands.

• Understand the psychology of your market segment – Consumer solutions need greater emphasis on design, usability, and appeal. The ease of use of your solution and how it looks is very important for individual users.
• How will the user benefit from your product or service? – Since the benefits derived by consumers are much different than those derived by businesses, what exactly will your solution do for consumers?
  • Provide entertainment value (games, music, videos, other interactive content)
    o Convenience and functional purpose (Example: an engaging task manger app or a fun to use navigation app?
  • Education and learning (knowledge and learning –based apps)
  • How will you earn? Pricing models for consumer solutions are straightforward
    o Subscription-based
    o One-time fixed payment
    o Additional features and enhancements available for additional payments

A good business plan includes the Market Research as mentioned above, but more importantly it also focuses on business model, the product/service offering, development, deployment, and marketing plan.

Business Model

The crux to your business plan is your business model. Without it, you can’t succeed and you can’t acquire capital. Your market segment will predicate your business model (and your marketing strategy).

Your solution, will it be a Mobile App or Web App? For Businesses or for Consumers?

• Apps for Businesses requires an application that is Software as a Service (SaaS) – an application that enables and provides some sort of service while connecting resources within an organization. As such, Business Apps are rarely standalone; instead, the app is a conduit and mobile tool for a larger software application. Whether it is a Web or Mobile App, SaaS model will apply. Pricing for the SaaS model will vary but typically is as follows (May not have all of the items in the fee structure listed below):
  • Initial Deployment Fees
  • Monthly Recurring Fees
  • Upgrades and Feature Add-on fees (May include additional fee for Mobile App version) (Recurring)
  • User Base Fees (Recurring)
• Additionally, marketing the App is intimately connected to your pricing model and market segment. Marketing a business solution takes the approach of onboarding organizations and subsequently building a larger user base over time (including larger clients). Of course there are marketing activities involved in the deployment of your solution.
• Apps for Consumers is a dynamic market greatly affected by factors such as:
  • Web or Mobile (or Both)
  • Available for major Platforms (Android & iOS)
  • Pricing vs. Offering

Consumer trends are driven more by marketing, interactive content, and convenience than needs. Pricing is another major factor in the business model. Consumers want an app that is free or low cost but offers great value for the price. Generally, in consumer apps, pricing models will have some similarities to business apps but differ in other ways:

• Free apps with paid upgrades (one time fee or recurring)
  • Free apps with in-app advertisements (User can purchase upgraded app with no ads)
  • Free app with in-app purchase offers (including discounts and special offers)
  • Paid app (one time or recurring)
  • Paid app with additional fees for upgrades
  • Pay per Use

There is much greater flexibility and variances in pricing models for consumer apps. Such pricing models enable you to establish multiple channels for sales and revenue. Innovative and convenient sales offers will gain buyers. Additionally, from a marketing perspective, high user engagement.

Your Product or Service Offering

Clearly identify what you have to offer to your customers and what value they will derive from the product. More importantly, include something else in your business plan – a mockup or prototype of your product. For example if you are developing a software or an app, take some time to digitize your vision and create a general layout and the workflow for the app or the software. The advantages are two fold: (1) incorporating this into your business plan enables your idea to be more tangible and closer to development (and raise more interest in investors) and (2) it reduces development time since some of the concept and mock up work is done by you. The great thing about creating your design can very easily begin on a piece of paper and gradually evolve over time – all of which can be done by you at little or not cost.

Development Plan

How will you develop your product? Who will develop your product? How will you manage the development? What are your developmental constraints? These are very important factors to keep in mind in addition to the business plan and financial models. Even if your idea is great, your market is open, and your pricing is ideal, without an effective way of developing the product, you aren’t going to progress at all.

It would be advisable to include the development plan within the business plan – even perhaps scope out development options before you approach investors to build credibility.

Are you a software developer? If so, are you also a good manager? As an entrepreneur, you won’t be just working on your idea but also managing, marketing, and raising capital for the project. If you are a one-person team, you’ll be managing yourself, do you have the skills to do it? Being an entrepreneur means being a excellent manager (of yourself and others). That brings us to the main point, how are you going to manage your development, don’t wait till you are ready to cross that bridge, plan well ahead of time.

If you are (a one-person team) acting as the developer and manager:

• Plan your goals ahead and work within manageable time frames
  • Use agile framework to build MVP every 2-4 weeks
  • Have a set goal for prototype completion by 4-8 months
• Hold yourself accountable to project deliverables
  • Work to develop from a business standpoint – you are in the business of earning
  • Develop and deliver with the intent of demoing to potential stakeholders
• You aren’t delivering to yourself
  • Keep your end-user in mind and develop accordingly
  • As an entrepreneur, your first end-user may be investors and or early adopters, so build to gain capital and market traction

Are you an entrepreneur with an external development team (Professional or Freelance team):

• Precisely define the requirements for building your solution
  • Have workflows defined for how the solution will work
  • Have possible mockup designs developed to show the design/layout and interface
• Communicate with the development team before development
  • What will the development process entail?
    • What sort of development processes will they use (Some sort of agile methodology)?
    • How often will the team require your feedback?
    • Don’t wait to hear back from the team, be proactive (but don’t be a hindrance!)
    • Define what will be in the development plan beforehand, changes made later in the development are difficult to incorporate and may slow down the development in general. Developers will not always agree to add things not reflected in the Development Plan.
• Quality is not defined by price or the location of the team
  • Great development teams exist all over the world offering varying prices
  • Check the previous work performed by the team
  • Compare rates and project quotes – don’t expect your project to be cheap, it will be cost effective to use off-shore teams but not cheap.
• Have a definite Plan with the project scope (Your development team will often establish the scope and limitations in their proposal)
  • Define the limitations of the development
  • Define the duration of the development cycle
  • Define project milestones
  • Define a payment plan
    Keeping the above factors in mind, you are far more likely to successfully manage and oversee the completion of your solution for successful release.

Marketing Plan

Even the greatest solutions will fail if no one knows about it and if no one is convinced about your solution. One of the most pivotal part of your entire startup plan is marketing. In fact, industry experts recommend allocating up to 30% of your annual budget to marketing for the first 1-3 years. Understand your market and define how you will:

• Develop and define your brand (even before your solution is complete)?
  • Define what your company and the solutions represent
  • What thought should go through peoples mind when they see your brand?
  • Your brand is intimately connected with your solution, plan accordingly (brand concept and solution concept should be concurrent activities)
• How will you reach your audience (your audience will include people who may become your evangelists)? Your brand exists, as does your solution, now what?
  • Identify and stratify your audience
  • Use digital channels to reach your audience
  • Use guerilla marketing tactics (if applicable) to reach your audience
  • Gain traction via your industry-specific events
• How will you convert your audience to customers?
  • What is your value proposition?
    • Is someone else offering same or similar solution?
    • Can you differentiate your company from competitors?
  • Special offers and onboarding incentives?
    • Have various sales incentives for early adopters
    • Design a marketing campaign to incentivize early on-boarding
    • Reward early adopters
• How will you scale your business?
  • Develop a strategic growth plan
    • Partnerships development
      • Are there companies you can partner with for mutual growth
      •  Does the partner org offer complimentary service (and vice versa)?
    • Channel distribution growth
      • Resellers?
      • Partner market?
  • Merger and Acquisition
    • Is there a limit to growth before you want to sell your company?
    • Even before reaching market maturation, mergers can present a great opportunity to drastically grow your market

Funding and Capital Source

Funding your idea is a major hurdle and can often be a protracted process. Determine early during the planning phase how much seed funding do you require to build and deploy your solution. Be realistic in your funding requirements and use the funds efficiently. Your monthly (cash) burn rate should not come as a surprise to you or your investor(s). Invest the money in things that really matter – make every penny count.
Seed funding can come from various sources such as crowd funding, angel investors, and or family. Explore all the available options to acquire seed funding and be creative in how you raise funds. Do not be dissuaded by the many “no’s” you may receive – be persistent and incessant.
When seeking funding, look for channels of growth from your investors –

• Do your investor(s) understand your market?
• Do your investor(s) have access to strategic partners in your market?
• Can your investor(s) help you maneuver and grow in the market?

Ensure that your investor can support your growth beyond capital; it is in the investor(s) interest to do so. Be cautious when acquiring funds and understand the terms for capital. Always ensure there is a way for you to mitigate any unforeseen events that may come up.

Last Remarks

This guide should serve to help aspiring entrepreneur or those already in the startup arena. The guide, and the critical points therein, can also be a great template for developing your business plan and strategy. The many points raised in this paper are quite relevant for wide-array of verticals and we certainly hope the information presented will serve to better guide you in your journey.

About Plenar

As a company that specializes in working with startups and entrepreneurs, we have worked with numerous clients grow in due time to become successful businesses. We’ve had clients begin their journey as a 1-person team reaching valuation of over $100 million. On the other hand, we’ve had client’s struggle to gain a foot in the market. With our experiences over the years, we’d like to provide insights to (aspiring) entrepreneurs that would be definitely helpful for them.