I really enjoy taking a concept from an idea on the back of a napkin to a working product. I have gone through training at a large e-commerce company on how to do this as well as hundreds of bootcamps. After doing this several times, I can move through the steps listed below very quickly. These steps are not just for startups, they work for a business that has been successful for generations, but is looking to try a new marketing channel. Or a company that is looking to add a product or service. This may seem like adding a lot of extra work before you even get to the development process but from experience I know it saves time. My hobby is making furniture, which I learned from my grandfather. He often said, “measure twice, cut once”. There is nothing more heartbreaking than throwing out a beautiful piece of expensive hardwood because you didn’t take the time to check your measurements and there is no greater sin in business than needless waste.
Goals
- What do we do? Before you go spend a small fortune getting likes, followers, or page views, you need to step back and figure out what your goal is. Are you trying to get new business? Are you trying to service existing customers? My guess is brand recognition is not your goal. Any project should do one of three things: 1) increase sales 2) increase your rate or 3) lower your costs. Basically every project should accomplish one of those. There are some exceptions. Like increasing employee retention or improving employee acquisition, but typically projects that do not fall into the big three can be done with very inexpensive solutions.
- Target Market – Who is your target market? If the answer is “people who will buy my product or service,” you may want to spend more time thinking through this question. This is a very critical question that will influence things like your logo, site design, and channels you use to solicit new business. Where are your customers located? Male, female, or both? Income level? Education level? Physical location? Ethnicity? What values do they have? Or are you targeting businesses? What size? Who is the decision maker? I have worked with people that, when they start thinking through this, realize they are wasting time on customers or clients that make them little or no money when they could be spending that time getting customers or clients that take less time and make more money. Or solve problems that make expensive customers more profitable. You may have different customer segments. Which is more profitable? Which is easier to acquire? How much time do each of these take?
- Market Differentiation – If you think you are the only one out there trying to do what you do, you are fooling yourself. You need to clearly define your unique value proposition. You need to understand what it is your competition offers and how you are different. What is your story? If you only get 10 seconds, what message must you convey?
Business Model
Another thing to consider is doing a financial model to ensure this idea is viable. The complexity of the model depends of the size of the project. Basically you want to estimate project costs and how this project impacts your business. For a new business, you need to understand things like break even. For existing business you need to think through how this increases existing revenue, creates incremental revenue, or lowers expenses. The lower expense may be in the form of lower cost of new customer acquisition. Or it may be lowering the turnover of employees. Generally, the revenue or cost savings should be greater than the cost of the project. Building models like this are helpful because you can understand the critical assumptions and variables. Is the number of customers needed to break even greater than your target market? Is this project more expensive than the potential incremental revenue? You are definitely going to want to know that before you spend money on the project. The good news is there is a lot of free data out there to help you make those decisions. I have done really simple models to really complex models for companies that have billions of dollars of revenue. Some of those models are comparing the acquisition cost of an existing company to building a similar business from the ground up. Trying to value a fast growing company with large growth potential to large companies that might soon IPO and trying to get an idea what they should expect in terms of initial market cap and the return they can expect from that public offering.
Concept to Design
- Wire-frames – doing a wireframe can really save you a ton of money. Keep it simple. Let the designer solve how it looks. If you get an architect to make a blue print, he doesn’t start picking colors. This is just simply how do you move a potential customer from getting them info they need to getting them to click on a buy button or filling out a contact page. Or if they click on X, what happens. How do all of these pages fit together? Can you get to each page in one or two clicks? This is where you start to realize you are going to need more than just a few pages. I have a tool that works really well and I can build in quickly. In this step it is better to think more about what pages you have and how you navigate through them and a very, very basic conceptual layout. A designer will do a much better job at making it look nice and they can usually do it much faster than you.
- Minimum viable product (MVP)- There are a ton of books out there on this topic. I really like Running Lean. The Lean Startup was the book that started this concept, but instead of reading that book, you can watch this hour long talk the author did at Google. The idea is basically, before you go spend a ton of money, start with the MVP to validate your concept. This method is very effective and can seriously lower your project cost. I have gone several camps like Lean Startup Machine and Startup Weekend that embrace this method and it is extremely popular because it is extremely effective. There is a definite art to it. If you are too far on either extreme you are going to make some costly mistakes. If you find that sweet spot, not only will you save money you may make a better mouse trap.
- Prototypes – A prototype does two things: it shows the developer what happens when you click on each element and it gives you something you can show to investors or potential customers to get feedback. The developer needs to know two things. What should the site look like and when you click X, what should happen. If the prototype is well made, it is usually good to take someone that falls into your target market and test it out on them. See what they like and don’t like. Ask open ended questions and let them just talk. There are three things you are looking for. 1. Can they figure out how to use what you made? 2. Is there a page or function you thought would be useful that no one is using or finds useful? 3. Is there something they think you should have that they can’t find? All of these things can help you refine the idea. This is where you get a great idea of what your MVP should be.