Business

Mobile App Creation Guide: From Idea to Market Development. Part 1

In this guide, I've tried to combine my extensive experience and knowledge covering the entire process of creating mobile apps. Don't expect to find code snippets here; the content of the guide is not only for those who work with Android, iOS or Flutter, but also for those who are new to the world of coding.

A quick note about myself: I've spent over a decade in the tech industry, from project management to running my own business. In addition to my main business, I invest in startups and also build internal products for company needs. I have dedicated my life to building products by applying my knowledge and business experience. My professional opta from project manager to business owner has given insight into app concept, marketing and of course technical aspects.

The purpose of this guide is to gather all these aspects into a single resource, mainly to organize my own thoughts and knowledge.

Before I start outlining the material, I would like to point out: ideally I would like to illustrate each point with a real-life example, but that would make this guide too long. Therefore, I will focus on the key elements and elaborate on each step, explaining their importance. If you find any gaps in information, the Internet is a treasure trove of additional resources.

Prepare yourself for this to be a very extensive read.

Step 1: Conceptualizing Your App Idea

A Quick Overview of Your Concept

If you've already got an app concept in mind, jot it down in a sentence or two, avoiding any intricate details for now—those will be fleshed out later. It's not uncommon for the initial idea to morph into something else as you delve into it, and that's okay. The primary aim is to establish a foundational concept to build upon.

If you're still in search of an idea, consider the following avenues to explore:

  1. Take note of personal or communal issues, 'pain points,' or gaps in various life sectors that an app could potentially address or simplify.

  1. Facilitate a creative thinking session with friends or colleagues to collaboratively generate intriguing ideas.

  1. Examine top-rated apps to identify areas for improvement or additional features that could be incorporated.

  1. Seek out apps that have poor reviews but no direct competitors in their category. This could be an opportunity to create a superior version.

  1. Experiment with merging functionalities from multiple successful apps to create something unique.

  1. Pinpoint specialized sectors or niche communities that are lacking a dedicated app and consider developing one tailored for them.

  1. Participate in startup-oriented events. These events are a fertile ground for innovative ideas, networking and potential collaboration.

  1. Keep an eye on emerging societal trends and new technologies - they can be a source of inspiration for creating interesting app concepts.

  1. Pay attention to everyday experiences and interactions - a simple observation can be the impetus for the next big app.

Assessing the Marketplace

Before you can gauge the potential success of your app concept, it's vital to pinpoint the market segment it falls under. This involves scrutinizing market volume, current trends, and the unique characteristics of the segment you're targeting. For reliable data, consider reaching out to firms that focus on app market analytics, such as sensortower.com, data.ai, prioridata.com, apptopia.com, among others. If you can't access their data, utilize various online sources.The higher quality data you collect, the better your analysis will be, allowing you to refine your idea and tailor the app closer to the user's needs.

Here's how to go about dissecting the category and identifying trends:

  1. Rate of App Installations: Investigate how the category has been growing over a set timeframe, be it monthly, quarterly, or annually.

  1. Active User Metrics: Evaluate the current and historical number of users who are actively engaging with apps in this category.

  1. Financial Viability of the Category: Assess the revenue streams of this app category, often indicated as overall earnings, both now and in the past.

  1. Geographical Insights: Collecting data on the popularity of the category across various countries can help you decide which markets to target in your promotional efforts.

  1. Demographic Breakdown: Examine data related to the age groups that are most active within this app category, aiding you in identifying your core audience.

  1. Trending Concepts: Scrutinize the prevailing trends and hot topics within the category to understand what features or functionalities could capture user interest.

And any other relevant insights you may stumble upon.

Evaluating the Competitive Landscape

Recognizing both your direct and indirect competitors is a vital first step. The evolution of your app concept should be influenced by the strategies and features these competitors employ. This approach will help you identify what users find valuable in existing solutions and allow you to carve out a unique space for your app in the marketplace.

Core competitors are those that offer similar products or services aimed at the same target audience and have a comparable market share.

Non-core competitors are those who offer products or services that are different from your app, but may be an alternative for your target audience or have a smaller market share. It's also worth considering new startups that could potentially become competitors in the future.

Once you've pinpointed who your competitors are, proceed with an analysis using the framework of Porter's Five Forces. This model provides insights into the competitive intensity within your industry and uncovers potential avenues for expansion.

It is very convenient to use miro boards

As a concluding phase of your competitive scrutiny, assemble a comparative chart that encapsulates key attributes of your competitors' apps. Consider including elements like feature set, pricing structure, revenue models, user experience, and customer feedback. This side-by-side comparison will illuminate each product's pros and cons, offering you a clearer perspective on how to make your app stand out.

Assessing the Broader Context

Factors beyond your control, such as economic conditions, political stability, societal shifts, advancements in technology, and even global health crises, can influence the demand for your app. Understanding these elements can help you fine-tune your development and marketing strategies.

To systematically evaluate these external influences, you can employ a STEP analysis. This approach is commonly used to scrutinize a prospective market when launching a new offering, gauge prevailing trends, and pinpoint both risks and avenues for growth.

Defining Your Ideal User Base

The primary focus when developing an app should be its intended users, with personal interests taking a back seat. Understanding the demographics, lifestyle, and challenges of your potential users is paramount.

Start by pinpointing your app's core user group. These are individuals who are not just likely to show interest but will also engage actively with your app. Following this, identify peripheral user segments who may find your app appealing but not to the same degree as your core users. This strategy will help you expand your app's reach and tap into a larger pool of potential users. Consider examining related age brackets, hobbies, and requirements that your app could fulfill.

To differentiate between your core and peripheral user groups, take into account variables like age, gender, educational background, income levels, geographic locations, personal interests, behavioral traits, among others.

It's vital to delve into and articulate the primary challenges or 'pain points' that your app aims to resolve for its users. These could range from issues they encounter with existing apps to unfulfilled needs or unmet expectations. Gaining this understanding will equip you to develop an app that not only satisfies user demand but also stands out in a crowded marketplace.

Elaborating on the Product

Having identified our competition and the audience we aim to serve, it's an opportune moment to further develop the initial concept. The app should focus on alleviating the challenges or 'pain points' experienced by the target users. The objective is to outline how your app's features will address these issues and fulfill the audience's requirements. You can offer real-world examples of how the app could elevate the user experience, contrasting it with other market options.

This task calls for creativity, and there's no universal blueprint for success. However, I can offer a framework for articulating the product's features and advantages:

  1. Core Functions: These are the essential capabilities and features that make the app functional and meet the users' fundamental needs.

  1. Supplementary Features: These are the extra functionalities or features that aren't essential but could captivate users and enrich their experience with the app.

  1. User-Centric Functions: These are features designed to cater to user preferences, such as user-friendly design, intuitive navigation, and customization options.

  1. User Benefits: These are the tangible or intangible gains users will experience, like time efficiency, lifestyle enhancements, social engagement, or problem-solving capabilities.

  1. You can also delve deeper into the app's unique selling propositions, even if they overlap with the above categories:

  1. User Value Proposition: This refers to the primary feature that solves the most pressing issue or fulfills the central need the app aims to address.

  1. Key Advantages: These are the standout benefits that make your app particularly attractive to users.

  1. Value Sources: These could encompass both technical elements like the algorithms or app speed, as well as non-technical aspects like community involvement or strategic partnerships.

  1. Unique Selling Points: These are the distinct attributes and advantages that differentiate your app from competitors and make it the go-to choice for users.

Crafting a Strategy for Product Growth

As we further hone our initial idea, employing a SWOT analysis becomes invaluable. This tool aids in pinpointing the app's strong and weak points, as well as identifying growth opportunities and potential external risks that could affect its viability.

SWOT analysis

Merely jotting down elements under the categories of Strengths, Weaknesses, Opportunities, and Threats won't yield much value; it would be a misuse of time. It's crucial to go beyond listing and actively compare and contrast your Strengths with Weaknesses and Opportunities with Threats.

The subsequent move is to formulate a roadmap for the app's growth, drawing insights from the SWOT analysis. While crafting this roadmap, keep the following guidelines in mind:

  1. Zero in on pivotal elements that could add significant value to your offering. This focus will enable you to allocate resources more efficiently and enhance the likelihood of your app's success.

  1. Be realistic in evaluating your capabilities to sidestep undue optimism or pessimism. As you lay out your strategy, take stock of the resources at your disposal for executing your plans, and make decisions grounded in what's actually achievable.

  1. Stay attuned to market dynamics. Given that markets are in a constant state of flux, your growth strategy should be agile enough to adapt to these shifts and capitalize on emerging opportunities.

Crafting an MVP and Navigating the Product Life Cycle

An MVP (Minimum Viable Product) is a version of the app with the least amount of features necessary to satisfy the needs of early users and gather feedback for its further development.

Your first task is to pinpoint the core features that will make it into the app's initial release, commonly known as the Minimum Viable Product (MVP).

A key consideration at this stage is your app's revenue model. You'll need to decide if the app will be a paid download, free with in-app purchases, or operate on a subscription basis. If your app is designed for long-term use, a subscription model could be particularly effective. Another avenue for revenue could be experiential selling: if your app can deliver a unique emotional experience to users, it could set you apart from the competition.

The subsequent step involves outlining your app's life cycle to anticipate its evolution beyond the MVP stage.

The Product Life Cycle (PLC) is a sequence of stages an app undergoes from its inception and market introduction to its eventual decline.

The life cycle of a product typically unfolds through several key phases:

  1. Launch Phase: This is when the product is first introduced to the market. Marketing and sales activities are at their peak, although profits may initially be low due to the costs of development and promotion.

  1. Expansion Phase: During this period, the product starts to gain a foothold in the market, the user base grows, and profits begin to climb. This is the time to streamline operations, broaden your market reach, and refine the product.

  1. Peak Phase: At this point, the growth rate of sales starts to taper off, and the product reaches its highest levels of popularity and profitability. This is the stage to focus on cost-efficiency, customer retention, and exploring new avenues for growth, such as product enhancements or diversification.

  1. Plateau Phase: Here, sales have stabilized, and growth rates are diminishing due to market saturation, increased competition, or shifts in consumer preferences. It's essential to stay alert to market changes, adapt your marketing strategies, and explore new market segments or opportunities to prolong the product's life cycle.

  1. Declining Phase: In this stage, both sales and profits are on a downward trajectory due to emerging competitors, technological obsolescence, or evolving consumer needs. The organization must decide whether to revamp the product, develop new offerings, or gradually retire the existing product from the market.

Cost Estimation for App Development

Estimating the costs involved will provide a clearer picture of the financial resources needed to bring the app to life. In the following section, I'll outline various categories of expenses to help you understand how to populate your cost estimation table.

  1. Fluctuating Costs: These are the costs that vary in direct proportion to the level of production or services rendered.

  1. Stable Costs: These are the costs that remain unchanged, irrespective of the volume of production or services provided.

  1. Direct Costs: These are the costs that can be directly linked to the production of each specific unit of the product or service.

  1. Indirect Costs: These are the costs that cannot be directly allocated to a specific unit of the product or service.

  1. Direct Fluctuating Costs: These are costs that are intrinsically tied to the production process and fluctuate based on the volume of output. They have a direct impact on the cost per unit of the product. For instance, raw materials and performance-based wages fall under this category.

  1. Indirect Fluctuating Costs: These are costs that, while related to the production process, cannot be directly allocated to the cost of a specific unit. They vary with the level of production but are spread across all units produced. Examples include sales commissions, costs of packaging, shipping and warehousing, marketing expenses, third-party services, and server hosting fees.

  1. Direct Stable Costs: These are costs that are directly linked to the production process but do not vary with the level of production. They are fixed in nature and directly influence the cost of each unit produced. However, it's important to note that the traditional categorization of direct and indirect costs often doesn't apply to stable costs, as they are generally considered indirect costs. Examples include fixed salaries for production staff and specialized equipment leasing.

  1. Indirect Stable Costs: These are costs that are fixed in nature and cannot be directly allocated to the cost of a particular unit. They remain constant regardless of the volume of units produced and are spread across all units. Examples include equipment depreciation, facility rent, administrative staff salaries, insurance premiums, taxes and levies, telecommunications expenses, internet connectivity, and office supplies.

Unit Economics

Unit economics is a crucial tool for analyzing and predicting a business's financial outcomes, even if the product doesn't exist yet. It helps forecast the necessary profit and expenses for the app to be profitable.

AC (Acquisition Cost) - Marketing expenses

UA (Units Acquisition) - Number of acquired users

C1 (% Conversion rate) - Percentage of users who make a purchase

AOV (Average Order Value) - Average transaction amount

APC (Average Payments Count) - Average number of purchases per user

COGS (Cost of Good Sold) - Costs at the point of purchase

1sCOGS (First Sale Cost of Good Sold) - Costs at the point of the first purchase fix

COGS (Fixed Sale Cost of Good Sold) - Fixed costs

CAC (Customer Acquisition Cost) - Cost of acquiring a user

CLTV (Customer Lifetime Value) - Gross profit per user

LTV (Lifetime Value) - Gross profit per scaling unit (the profit a company gets from one user over the entire period of their relationship with the business)

PPPU (Profit Per Paying User) - Profit obtained from each paying user

ROMI (Return on Marketing Investment) - Profit obtained as a result of marketing investments

CM (Contribution Margin) - Marginal profit

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) - Net profit

Fill in your data for AC, UA, C1, AOV, APC, COGS, 1sCOGS, and fix COGS; the rest is calculated using formulas:

CAC = AC / UA CLTV = (AOV - COGS) × APC - 1sCOGS LTV = CLTV × C1 PPPU = (CAC / C1) + (AOV - COGS) * APC ROMI = (LTV - CAC) / CAC x 100% CM = UA × (CLTV × C1 - LTC) EBITDA = UA * (C1 * (AOV - COGS) * APC - CAC) - (UA * C1 * 1sGOGS) - fix COGS

Unit economics can be calculated in various ways, and this is just one approach. I share with you an example. DOWNLOAD

Collecting all the Lean Canvas

The final step of step 1 is to collect everything we've done in one place. Lean Canvas is very well suited for this purpose. It is an adapted version of the Canvas business model created by Ash Maurya for use by startups and entrepreneurs.

Lean Canvas

This concludes the first stage of our product creation journey. I hope this article has resonated with you. In the next article we will talk about Step 2: UX/UI. Let's analyze two approaches to UI creation. If you need help, you can always ask us for advice and we will always help you.

Dmitry Spartak

CEO

Nyoka

Sep 18, 2023

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