The Investor Mindset: How To Craft a Winning App Pitch

Originally published: February 2018. Updated: April 2024. You’re scrolling through your phone, desperately searching for an app that solves a nagging problem. Maybe it’s finding a reliable babysitter at the last minute, splitting a restaurant bill with friends seamlessly, or finally organizing your ever-growing to-do list. But every app you find falls short. “There has to be a better way,” you think. That’s the spark of a brilliant app idea! But then reality sets in: how do you turn that spark into a reality, especially when funding feels like a major hurdle? Entrepreneurs take note: Hold on to your fantastic app idea! This comprehensive guide equips you with the knowledge and resources to navigate the app funding landscape and turn your app dream into a thriving mobile application.  Before We Dive In: Building a Strong Foundation Two key elements, the minimum viable product (MVP) and business plan, will be your cornerstones for attracting investors and securing the capital to launch your dream app. Before we delve into the various funding options, let’s solidify the foundation of your app’s success. The MVP Advantage Many successful apps started as an MVP. This basic version focuses on core functionalities that solve your target user’s problem. The MVP allows you to test your concept with real users early and often. This valuable feedback helps you refine your app and ensure you’re building something people actually want before sinking a ton of money into development. Business Planning: Craft a Compelling Roadmap Having a solid business plan is crucial for attracting potential investors and securing app funding. It demonstrates your understanding of the market, your competitive advantage, and how you plan to turn your app into a sustainable business. Essential sections include: Executive Summary Market Analysis Competitive Analysis Product Description Marketing & Sales Strategy Management Team Financial Projections Many online resources are specifically designed to help entrepreneurs write business plans. Check out SCORE (https://www.score.org/) or the Small Business Administration (https://www.sba.gov/) for free templates and guidance. App Funding Options for Aspiring Entrepreneurs Having a brilliant app idea is just the first step. Transforming that idea into a reality requires funding. This section will equip you with a clear roadmap to navigate the diverse financing landscape for app development. We’ll explore various options, from bootstrapping with your own resources to attracting external investment. By understanding the pros, cons, and ideal scenarios for each approach, you can make informed decisions to secure the capital needed to launch your app successfully. 1. Bootstrapping: Building Your App on Your Own Terms This is where you use your own resources to fund development. It might involve dipping into your savings, taking on a side hustle, or bartering your skills for services you need. Bootstrapping offers complete control over your business but requires careful budgeting, resourcefulness, and a willingness to wear many hats. Here are some tips for successful bootstrapping: Prioritize ruthlessly. Focus on developing the core functionalities that deliver the most value to users and postpone fancy features for later. Embrace open-source tools. Many free and open-source development tools and libraries are available to help you build your app without breaking the bank. Consider a side hustle. If your budget is tight, a side hustle can provide additional income to accelerate development. 2. Friends & Family: Your First Cheerleaders (and Maybe Investors) Your friends and family can be a fantastic source of early-stage app funding, especially if they believe in your vision. However, it’s crucial to approach them professionally. Communicate your vision and investment goals. Create formal agreements outlining the terms of the investment,  including the amount of funding, repayment terms, and ownership stake. This protects everyone involved and avoids misunderstandings down the road. 3. Crowdfunding Platforms: Unleashing the Power of the Crowd Sites like Kickstarter and Indiegogo allow you to raise capital from a large pool of online contributors. These platforms offer a unique opportunity to gauge market interest in your app before launch and potentially secure app funding from early adopters who are excited about your idea. Here are some key considerations for crowdfunding success: Craft a compelling campaign. Hook potential backers with a captivating video and story that showcases your app’s value proposition and potential impact. Be transparent about how you’ll use the funds raised. Offer enticing rewards. Incentivize backers with tiered rewards that offer early access to the app, exclusive features, or branded merchandise. Be a marketing machine. Use social media, online communities, and relevant blogs to spread the word about your campaign. The more people who know about your app, the higher your chances of reaching your funding goal. Remember: There’s no one-size-fits-all approach to app funding. Consider the stage of your idea, your comfort level with risk, and the amount of funding needed when deciding which option is best for you. App Funding: Setting Realistic Expectations Be prepared! Launching a successful startup requires hard work, perseverance, and a bit of luck. Unfortunately, many app ideas don’t make it to market. Here’s a reality check: Market Research Is Key Don’t just assume your app idea is brilliant. Conduct thorough market research to understand your target audience, existing competitors, and potential challenges. Focus on Value What unique value proposition does your app offer? Why should users choose yours over the competition? Define Your Target Audience Who are you building this app for? Understanding your target market demographics, needs, and behaviors is crucial for success. Success Rates & Challenges  While success stories abound, it’s important to acknowledge the competitive nature of the app market. Statistics show that only 10% of startups succeed [insert source here (optional)]. This emphasizes the importance of a solid foundation, a well-defined target audience, and a clear understanding of your challenges. Each funding option comes with its own set of challenges: Bootstrapping: Requires financial discipline and may limit the scope and functionality of your initial app. Friends & Family: Potential for strained relationships if things go south. Ensure clear communication and have ironclad legal agreements in place. Crowdfunding: Reaching your funding goal can be difficult and requires effective marketing. Beyond the Basics: Exploring Additional App Funding Options As your app evolves and gains traction, you can explore additional app funding avenues: Angel Investors These are high-net-worth individuals who invest their own money in promising startups. They often provide valuable mentorship alongside funding but expect a significant ownership stake in your company. Venture Capitalists Venture capitalist (VC) firms invest larger sums of money in startups with high growth potential. Securing VC funding is a significant accomplishment but often requires a more developed business plan and a proven track record. App Funding: The Path Forward Each funding option has its pros and cons. Carefully consider your needs and priorities before pursuing a specific type of app funding. By incorporating these actionable tips and realistic expectations, you’ll be well on your way to transforming your app dream into a reality.

The discovery phase of app development is crucial for the success of your mobile app. What is app discovery? The first of the app development phases, app discovery lays the foundation for design, development, and deployment. Comparable to strategy development, discovery phase goals are to: To build a shared understanding of your vision and objectives through detailed research, discussion, and analysis of your idea To visualize the entire scope of the app, defining a feature set that will drive app goals and create real value for users Those new to the app development process might wonder what on earth we are unearthing in the discovery phase, so we’re going to devote this post to a deep dive into what’s involved. As a best practice, we recommend the discovery phase include two parts—first, research and then, the discovery workshop—described in detail below. Discovery Phase Part 1: Research Most mobile app development companies use a workshop-style meeting to discover, or “get to the heart of,” your idea. But there’s work to be done first to make that meeting more effective. Before launching into an app development project, it’s critical to clearly define the opportunity you have in mind and reflect on what solutions already exist. Research at the outset of the discovery stage includes: Opportunity analysis Competitive analysis Industry analysis This analysis is necessary regardless of whether your target user is an internal team or a consumer external to your company. Even for gaming apps, differentiation is always valuable. Opportunity Analysis The Opportunity Gap In app discovery, opportunities arise when there is a gap. That gap exists between what is currently on the market and possibilities open up for economic change, technological advancement, or new social trends.  When you develop an app to fill the opportunity gap, it’s part science and part art. But the app development process always involves creating a solution perceived as meeting three criteria: the app must be useful, usable, and desirable. Even apps aimed at improving internal productivity or systems must meet these criteria. If people don’t perceive a benefit from using your app, they won’t bother. Customer Development The more you can do to define the opportunity you see at the outset, the better your success at creating the right product and knowing how to market it. This process, sometimes called customer development, is a way to reduce business risks by challenging assumptions about who the customers are, what they need, and why and how they do their work. In her book Lean Customer Development: Build Products Your Customers Will Buy, Cindy Alvarez writes, “Customer development is critical to success but grossly underutilized.” Alvarez offers practical education in customer development, noting that only customers make a product successful. In her words, “Without customers willing to buy a product, it doesn’t matter how good or innovative or beautiful or reasonably-priced a product is: it will fail.”  Every hour spent defining the customer pays dividends in the development lifecycle. That’s because knowing your customers means knowing which features are critical and which are not. Market Considerations To help define the opportunity and be best prepared for the discovery workshop, start by answering key questions about your app. Work together with your team to consider areas like these: Your Value Proposition: What problem will this app solve? Your Target Market: For whom will you be solving that problem? Your Market Size: How big is the opportunity? Minimum Expectations: How does your target market address the problem currently? Requirements: What features are critical for success? Your Differentiator: Why are you best suited to do this? Competitive Analysis External & Internal Solutions Once you’ve defined the problem as clearly as possible, you’ll need to learn about the currently available solutions—the alternatives to your app, which will help reveal key factors:  External Competition: If you’re selling an app externally, alternatives to your app will become your competition. You’ll need to quantify what unique value your app will bring relative to them.  Internal Efficiencies: If you’re looking for a solution to gain internal efficiencies, what you need may or may not already exist. Competitive analysis will reveal whether you can use an off-the-shelf app, which could save you money and time, or if you need to have something built that’s tailored to your unique needs. Market Intelligence Where do you go to find out more about the competition? Here are three places to look and analyze: Search Engine: One of the best places to begin is simply on your favorite search engine. Look for products using relevant keywords that describe the functionality of interest.  App Stores: You’ll also want to search Apple’s App Store and Google Play Store similarly. If you find apps that seem relevant, download them on the appropriate device and experiment with them so you can see their strengths and weaknesses.  Reviews: Reading reviews will also give you insight into potential gaps in functionality that might be opportunities for you—or red flags if you were planning to use the app in your organization. If a similar app already exists, consider whether developing something new is worthwhile. Your app development partner can help sort through this market intelligence to help determine where and how you could differentiate. Industry Analysis Understanding the competitive landscape can give solid insight into obvious hazards opposing your market entry. But there’s no guarantee of success if the current competition is weak. Here’s where industry analysis comes into play. This type of analysis may not be possible until later in the app development phases, but we’re including it here because any insights you can bring to this end are always helpful.  Industries are constantly changing, and buyers, suppliers, and other companies are all dynamic factors influencing who will prevail and profit. Sources to understand these dynamic factors can include:  Industry experts—what has worked, what hasn’t, and what trends do they foresee? Conferences & events—how does your competition interact with and attract customers? Tech trend reports—what are the newest companies and technologies? Industry analysis can help put you ahead of competitors, elicit additional ideas for your app, and improve your market positioning overall.  Discovery Phase Part 2: The Workshop Once you’re equipped with as much information as possible on the user’s needs and business opportunities, you’re ready to engage in a discovery workshop with your app development partner. Discovery Workshop Goals At InspiringApps, we want to analyze the opportunity from every angle. We use the discovery workshop to marry our technical and process expertise with your user and market knowledge. Our goals are to visualize the entire scope of the app and to help you define a feature set that will drive app development and create real value for users. While we want to “dream big” during the discovery phase, we advise our clients to avoid creating a product that “does it all” in its first iteration. Instead, the aim is to leave discovery with a plan to build something that allows users to accomplish just a few core tasks perfectly. This concept often referred to as the minimum viable product (or MVP), is derived from Steve Blank and Eric Reis’s lean startup movement. The MVP is an app (or other digital product like a chatbot or an Alexa skill) that is as simple as possible while providing a useful and enjoyable experience. Why do we suggest the MVP approach? Simpler products are easier and less expensive to design, build, and maintain. Building an MVP also enables you to get honest user feedback on your product before you’ve invested a lot of money building something that wasn’t quite right. Even the best market research isn’t as good as a trial with your user base. Discovery Workshop Methods User Story Mapping While there are various ways you can define your MVP, we recommend and apply a method called user story mapping. User story mapping outlines the users’ needs and ensures the use-case scenarios align with the product objectives for your app. Minimum requirements for a viable app are best able to surface when we clearly describe who your users are and how, when, and where they will use your product. This user-centered approach highlights fundamental technical decisions that need to be made early on, such as starting platform (iOS, Android, web, etc.), device form factor, integrations, and analytics. Success Metrics While we cover app analytics in another post, we’ll note here that it’s important to define success metrics and desired ROI at the beginning of your project. Doing so enables your app development company to help you determine how to measure these metrics and build the right analytics tools later in development. Even the first iteration of your app should have at least one key metric you’re evaluating to know you’re on the path to success. Discovery Workshop Output Once the MVP has been defined, app designers should spend time developing sketches and then wireframes to help your stakeholders visualize the user experience. These wireframes can serve internal teams and provide a way to get external feedback through user testing, saving time and money before developing code. For more details on wireframes, see our post describing the app design process. Closing Thoughts on the Discovery Phase It may be tempting to gloss over the app discovery phase, but time invested before digging further into the app development process reaps significant benefits later. App discovery enables you to identify your user base, define what will create real value for them, create a matching feature set, and test assumptions while it’s still easy to make changes. To learn more about the app development process and fine-tune your app design ideas, visit: The Essential Guide to the Mobile App Development Process How To Design Products for Every Generation App Integration: Building Apps That Interface With Others Your Journey With InspiringApps