Who's Going to Buy This?

Most businesses fail and that's in particular true for startups, but I'm not convinced it has to be that way. Or at least it doesn't have to be such a statistic.

Every year, we build a dozen or so mobile apps. Some big and some small. But overall, we're a small agency. We don't turn out dozens or hundreds of projects a year like the big boys. I'll come back to this in a minute. And what surprises me is that most of our clients haven't validated market demand for their product/service. Nobody has talked to a potential customer. Nobody has tried to sell anything. There's an idea, a budget, and a start date.

It isn't a legal requirement that you do this. It might not even be a moral requirement. But before you spend $30k on a mobile app, shouldn't you see if it's a good idea first?

I should probably admit upfront that I have a conflict of interest here. I make money when you build an app. I don't make money when you decide not to build an app. So everything below is me arguing against my own invoice, which hopefully counts for something.

Here's what skipping this step looks like in practice, because we've watched it happen. The app launches. It's a good app - we're proud of the build. It gets a few dozen downloads in the first week, mostly people the founder knows. A month in, organic installs are close to zero. The founder starts asking about marketing, which was never in the budget, because the plan was launch it and see what happens. When we launch a mobile app, it drops into a store that already has millions of products. 1500 new products go into the store every day. Few products ever leave. They just sit there.

And here's the thing - none of that is a build problem. The app worked. It's a demand problem, and it was knowable before development started.

Earlier this week, our team had a conversation about this. How can we validate ideas in advance and should we? 

My team has pushed back hard on this - how do you validate it? Can we assume there's demand if there are competitors? Apps that are launching new categories often get negative feedback initially. There's even a quote about this:

"If I had asked people what they wanted, they would have said faster horses." - Henry Ford

Note: there's no evidence that Ford actually said this, but I like to think it's true.

I've gone back and forth on this and here's where I've landed. The Ford quote is about the wrong question. If you ask people "do you like my idea," the answers are pretty much useless. People are polite. They also can't imagine products that don't exist yet. That's the question Ford was making fun of.

But that's not really what validation is. You're not validating the solution, you're validating the problem. Is this thing painful enough that people are already paying for something, or hacking together some workaround? Ford didn't need anyone to describe a car to him. He needed to know that people were tired of horses. And that was checkable.

Uber and Airbnb didn't sound like great ideas at the beginning and founder intuition clearly carried both platforms. But both of them were testing with real users and real transactions almost immediately. Intuition picked the idea. Data and feedback from the market got them to product market fit. Intuition without any feedback loop is just an expensive guess.

I'm not going to write out a full methodology here, but validation is less mystical than it sounds. It's some version of: 

• 10-15 honest conversations with people who actually have the problem (not friends, and not "would you use this" - more like "what do you do about this today?"). 
• A simple landing page describing the product with some real traffic pointed at it, to see who gives you an email or a card. Maybe a pre-sale or a waitlist. 
• Along the way you're trying to answer the questions that actually matter: How do we stand out? What's our differentiator? What do users value in our category? How can we distribute the app? Are there parts of the idea that people love or hate?

Not all of that information is useful, but it's information nonetheless and we should be informed before we start development. After we've started it is a bit late.

Back to the big agencies. I know they're not recommending any of this, and I understand why. First, it's actually pretty difficult to do and really does lean into a strong founder's intuition to interpret the feedback. Secondly, what if it's negative feedback? Did you just void the project you just sold? An agency that helps you figure out your app shouldn't exist has just talked itself out of $30k. The incentives are backwards, and I don't think most agencies are being malicious about it. It's just easier not to ask.

My gut says this is all common sense. Yes, why spend $30k on an idea before you talk to anyone? But it's clearly not common practice, on either side of the table.

So we're offering it as part of our discovery process. We already have a paid Discovery & Design phase for most projects. I believe the value of market research goes beyond validation. We can learn how the product should work and what it should look like. Powerful information for our designers and developers in the future. It won't be a one size fits all approach and I'm sure we'll get parts of it wrong at first.

But if you're about to spend real money on an app, "who's going to buy this?" seems like a fair question to ask before anyone starts building. If the people building it for you have never asked it, that probably tells you something too.