Lean Product Development: How to build apps without burning money

Oct 7, 2020 4:06:26 PM

How to Develop a Lean App

One in ten startups fail. Any guesses why? 

Let’s set aside issues such as a lack of funding or poor marketing, and focus on the key reason–building a product that no one wants to use. 42% of startup failures happen because of an inferior product, not aligned with customers’ needs.

Besides, product development can be expensive – hiring developers, designers, product managers, and other talent requires an initial investment before your app gets traction. This approach is risky as you can end up spending all your money on the development, then launch an app, and find out no one wants to use it.

But… Don’t you worry! 

There is a feasible way to reduce the cost of building an app – lean product development

This article will show you how you can build lean products to minimize waste and make sure people will buy it when you launch it. Let’s dive into the concept of lean development first.

What is lean development?



Putting complex terminology aside, lean development is all about engaging a customer throughout the process of building an app.

Instead of rambling around and making assumptions about what customers want, you should simply ask them.

Let’s dig deeper.

Lean development is the process of building digital products faster by eradicating waste and inefficiencies. The approach focuses on collecting user feedback and iterating to launch a product that corresponds to users’ needs.

With the lean development process, silos within an organization that would typically appear are eliminated. The teams working on the project are actively cooperating throughout the whole development process.

Once developed by Toyota in the early 20th century, the lean approach focuses on certain principles that we will explore further in this article.

Also Read: 5 Evolving Trends in Software Development in 2020

How to achieve product-market fit?

When working on launching a successful product, you have to achieve the critical milestones on the way to product-market fit (a market validation of your product).

Let’s look into the main stages of achieving product-market fit – proof-of-concept (PoC), prototype, and minimum viable product (MVP).

 

Source: Codementor

What is proof of concept?

PoC is an exercise you have to do to determine if you can implement your idea from a technical perspective. In this process, you can only test one element of your future product that will lead you to create multiple PoCs at once. 

When you conclude, “My idea can be developed,” your PoC test is successful. PoC is not the stage where you demonstrate your findings to the market. However, PoC can be a useful tool to convince investors or other stakeholders that your product can become a reality.

After verifying your proof of concept, you are now ready for the next stage – building a prototype.

What is a prototype?

A prototype is a model that helps visualize how the product works and presents an overall user experience. 

Product documentation, together with wireframes and user flows are the tools to build a prototype. There are many wireframing tools you can use yourself or with a design agency, including Balsamique, InVision, or Figma. 

User flows show the logic behind user interaction with the wireframes. You can decide to build it on your own or outsource prototype creation. Once your prototype is ready, you have to show it to users, receive feedback, and introduce changes to fit the product better to your customers’ needs. 

Now you know how you should build the first slimmed down version of your final product to show to users and test it for potential frictions. You can consider hiring digital marketing experts who will be able to recruit first users, conduct usability tests, and gather useful feedback. After you have run usability tests with users and improved your prototype, building an MVP is your next step.

What is the minimum viable product? 

With your MVP, you have to answer the question, “Do people want to buy this?”. This is the point that initiates build-measure-learn loop, which I will describe in detail later in this article.

First, let’s see how you can build your MVP.

MVP is a minimum set of features sufficient to satisfy user needs and gather valuable feedback from the market.

In this stage, you finally build some initial version of your product people can actively use daily. This version of the product is not tested on a selective group of potential customers as in the prototype case but is shown to the broader market. 

What’s next? 

Product-market fit

Achieving a product-market fit means finally validating your product. When you reach this point in your product’s lean process, your customers just can’t imagine their life without your mobile app!

How do you know you have reached product-market fit? 

There are plenty of methodologies and different approaches to understand if you have reached this stage in product development. Make sure you customize one to your business environment and the specifics of your product.

To measure if you have achieved product-market fit, you can use a must-have survey, developed by Sean Ellis. 

What is a must-have survey by Sean Ellis?

This survey is quite short and requires you asking your customers just one question: 

“How would you feel if you could no longer use the product X?”

Users can choose among a few options:

  • Very disappointed
  • Somewhat disappointed
  • Not disappointed
  • n/a (don’t use a product)

If your outcome includes at least 40% of users answering “very disappointed,” you can count it as a victory and assume you have achieved product-market fit.

There are a couple more methodologies you can consider using or at least testing out – net promoter score, engagement data, and retention curve.

What is the net promoter score?

To use Net Promoter Score, you have to include just one question:

“How likely would you recommend the product to your friend?”

Give users a chance to rank this likelihood from 0 to 10. The users giving a score of either 9 or 10 are strong ambassadors of your product. The higher the average score is, the more robust sign is for product-market fit.

Also Read: How to Materialize your App Idea?

What is engagement data? 

Engagement data helps identify how frequently customers are using certain product features of your app. The data on product usage enables you to understand if users are interacting with your product to realize and utilize its value to its full potential. As a result, they become “addicted” to your product and stick for longer with high usage.

In his book “Hooked,” Nir Eyal has described how one can use psychology to create the right experience for users to get them to use the product more often.

What is the retention curve?

What if all these positive metrics are just vanity numbers, and users will stop using the product at some point? That is why Brian Balfour includes another indicator for product-market fit - the retention curve. 

 

Source: Brian Balfour

When your clients start using your web or marketplace mobile app, you will see the majority interacting with the product. Over time, some will quit, while others will continue using it. If you manage to retain a roughly unchanged number of users over time, the retention curve flattens out at some point, and you have a clear indication of achieving product-market fit.

Remember, all these methodologies aim to point you in the right direction and help you understand if you are making progress with your product. However, every product is different, and the guidelines need to be adjusted to your business environment, that is why proceed with testing different approaches and customizing them to your product.

Learn-measure-build measure loop

The lean development process doesn’t finish with developing an MVP and reaching product-market fit. 

 

Source: New Entrepreneurship

You have the next step to make – scaling your tech startup

You have to gather feedback from users continuously (learn), understand what features need to be improved (measure), and iterate on your software by adding new features or improving the current ones. Sometimes, with the collected feedback, you will need to make a pivot from your initial idea. Your solution might evolve in a different product. 

Take Instagram as an example. Initially called Burbn, the Instagram app offered users a check-in feature, photo posting, and collection points. Having found users utilizing one feature the most – posting photos, the founders decided to simplify it. They brought it down to three key features –posting, commenting, and liking. 

After a “false start” but a successful pivot, Facebook bought Instagram for $1 billion just two years after.

 

Source: Quora

The process of lean app development 

Now, when you know about the key elements and stages of building successful products, let’s see how you can implement the knowledge about lean development in practice. 

Here is your cheatsheet to a lean product development that will help you start making money with your app faster.

1. Define the idea


Define your target market and customer segments. Keep your persona in mind. Understand what needs and pains your customers have that have not been satisfied yet. 

You have to carefully observe your target market’s needs and make sure the problem you chose is big enough. Otherwise, customers won’t stick around your tool for long, not saying pay for it. State your hypothesis about the problem you want to solve.

For example, project managers in small marketing agencies will use an affordable tool to add external contractors with more ease. They are going to use a tool that helps them collaborate on files within project threads more effectively.

2. Test your hypothesis


Look for people who reflect your customer persona profile and collect their feedback on your idea. Ask what tools they have been using so far to solve the problem you plan to solve with your product, what they like and dislike about the current solution. Ask what they think about the alternative solution – explain your idea and get their feedback. 

For our example of the project management tool, you would ask, “What tools are you using now to collaborate with external contractors? Are you happy with them? Why not?”. You can proceed by describing a solution asking, “What are your thoughts on this?”

You can also ask, “Would you like to get a tool that combines the three tools you are using in your company?” 

However, be aware that users tend to give declarative answers to the questions which deal with the future. Would you be so sure about what you are going to do tomorrow? Not really! That is why you need to check how people behave in real life by interacting with your tool and documenting their actions.

3. Collect user data

Set up a simple landing page where you will state your value proposition and describe your custom app. Drive traffic to the page. The easiest way would be to set up pay-per-click ads to reach your target audience. Measure conversion of your page and observe user behavior on the page with tools like Hotjar.

You can also consider using chatbots that can either collect data about your website’s visitors automatically or engage them with surveys and questionnaires.

Also, think of  conducting extended user interviews. When collecting surveys and interviews, analyze responses from users in depth. Check out what assumptions about users and their problems were wrong and what new information you have learned. You can use it to improve your product.

Now, equipped with more knowledge about your user personas, you can identify how your idea can better fit their needs.

4. Iterate on the idea 


Rethink your current assumptions about customer needs and your product features. Identify the areas which need to be improved and prepare a plan for the app optimization. You may even consider creating a different product and perform a 360-degree pivot! 

Don’t worry if all of your assumptions were wrong – it’s better to change the trajectory for product development now instead of burning money and launching a product no one will use in the end.

You have to perform the process of ideation, collecting data, and improving your product over and over again on each stage of building your product to keep the product aligned with user expectations.

 

Source: Day One

Now equipped with the fundamental principles of lean product development and knowing how this approach works in practice, you can start your journey to product-market fit. 

Make one step at a time and test your current assumptions about your product with real users before starting working on app marketing ideas and your sales strategy. 

No matter what stage of product development you are in now – PoC, prototype, or MVP – involving users into the process is a requirement for winning their hearts and establishing a strong market position. Get in touch here

Margo Ovsiienko

Written by Margo Ovsiienko

Growth Marketing Strategist. She creates content that converts website visitors into paying customers for SaaS companies and tech agencies. She is writing on her hands-on experience in marketing on her personal blog, Margo Leads.