Following the success of our last workshop in April, we’re excited to present this workshop again – this time at The Frontier in RTP on July 11.

If you’re considering building a mobile app or are embarking on a custom software development project, we’d invite you to join us for a free workshop next month. We’ll be discussing the most important, yet often most overlooked, step as you begin your project: market validation. We’ll also talk through technology and why it matters.

You’ll have full access to the entire Oak City Labs team for this engaging and interactive presentation, as well as Q&A and networking following the workshop.

We hope to see you there!


July 11, 2017
The Frontier (The Classroom)

  • Registration & Continental Breakfast – 8:30 – 9:00 am
  • Workshop – 9:00 – 10:30 am
  • Q&A and Optional Networking – 10:30 – 11:00 am

As an app developer, we get to speak with a lot of businesses and entrepreneurs about new apps and ways of using software to solve problems. Most conversations have one thing in common: people immediately think they need custom software development to bring their concept to life. This can lead to an overwhelming experience as the person struggles to simultaneously interview multiple developers and learn about software. All the while, they are also working toward validating that the idea or app will solve a legitimate problem, that it’s a “pain killer” not a “vitamin”.

The good news? Testing your idea can be done in a number of ways that don’t involve significant amounts of coding. Previously we talked about using market research as a first tool to determining market need. Today we’re going to walk through one example of using an off the shelf products to deliver a product to customers.

It’s important to know and consider that using an off the shelf product will also depend on your business. There are some cases where it may not be possible, but I challenge you to think through it. The mental exercise will help clarify the features you need to build before you begin development.

We’ll use a recommendation or content delivery service as our example for this post. A large majority of apps are aggregating data and refining that for a particular type of customer. Menu planning services like eMeals comes to mind. It’s one of the most established meal plan services out there. There are also newer, lesser known services like PrepDish that serve a need in the Gluten Free and Paleo space. It happens to make an excellent example of using pre-built software to create a business. (I’m about to make a lot of assumptions about how these are built based on publicly available information.) But onward because this is an example.

eMeals is a PHP built site and likely has a developer or team working to build out its entire functionality. However, newer services like PrepDish utilize marketing automation software to deliver weekly meal plans. PrepDish is currently using Infusionsoft with a WordPress website. Infusionsoft is a business automation suite where you can pre-define rules or actions that should occur based on input from the user. Ontraport and Salesforce are two other examples of automation suites. Typically a user will go to the PrepDish website, which is hosted with WordPress, and sign up for emails or more information. The flow tends to look like this:

When the user signs up, Infusionsoft takes over. This allows PrepDish’s founder to focus on growing her business while the software handles the rest. The two big pieces of technology used here are WordPress, which handles the marketing site and user accounts, and Infusionsoft, which handles the email automation. Again, I’m making some big assumptions, but if I had to guess she likely hired a developer to make a custom theme for WordPress, set the website up and any necessary plug-ins. And guess what? That can also be done without a developer for those of you willing to push up your sleeves. I don’t know much about Infusionsoft, but the founder may very well have set it up on her own or she might have had someone assist. These services typically provide support (along with a hefty price) and help you get onboarded, so it’s important to use that onboarding time wisely!

There are some cons to using these tools: they don’t scale well and the more you build, the more you rely on the automation suite. As it grows you will need to hire a consultant that specializes in the suite or pay the company for additional help beyond your onboarding training. It can also be very cumbersome to migrate away from a marketing automation suite because they’re proprietary solutions. More than likely as your business grows, you’ll want to build a custom solution to offer a better experience and new features, which will allow you to retain and engage a user base, something essential for long-term growth.

As you can see, custom software development isn’t essential to bring your app idea to life in the early stages of business. With a tremendous amount of free or low cost “off the shelf” options available, there’s no reason you can’t begin and test the idea without the costly investment and complexity that comes with custom software development. And when the time comes for that, you’ll have a much better idea of what actually needs to be built. And when that time comes, we’d love to hear from you!

Shoestring Market Research

Two weeks ago we hosted a workshop discussing market research and validation. We shared several methods, tools and resources to use while researching a market opportunity. Most importantly, we covered why you should do research before building anything. Today’s post summarizes a few of those items and will give you a starting point into tackling your own market research.

Value Proposition

The hardest part of research, or anything really, is simply getting started. I like to begin with the goal of writing a value proposition. Fortunately, I spent plenty of time during the NC State TEC program working through value propositions, particularly one based on Geoff Moore’s Crossing the Chasm. I’ve since used the same value proposition with product teams, clients and our own internal projects. In order to “cross the chasm” and avoid certain death, you need a plan, a position and understanding of your market.

 

A well-researched value proposition will help you think purposefully about the business or product you are about to build. The structure to follow is:

For (target customer)
who (need or opportunity)
the (product/service name)
is a (product/service category)
that (statement of benefit)

Unlike (primary competitive alternative)
our product (statement of primary differentiation)
which leads to (economic impact)

If you break down each section, it walks through market size, problems and needs. It also covers competitors and your own unique differentiators. Using the value proposition as a guide, you begin with finding market opportunity or size in dollars. I primarily use Google search for finding reports or charts that show market size. As an example, we’ll research the construction software market. Here are sample search terms I might use:

construction software spend 2016
construction industry spend on software
construction software market share
construction software market size

It’s a good idea to also look at Google Images and different file types when using these terms. The data you’re after may be in an image or on a report. For file types, add “filetype:pdf” or “filetype:ppt” to the end and you might even find a report from another company that has surveyed the industry of interest.

Often times I’ll take a stab at writing the value proposition without real numbers and then fill them in later. Your value proposition will likely get re-written multiple times during the course of research and feedback.

Voice of the Customer

Outside of Google searches, the most important tool in your market research arsenal will be talking to people. The formal research method is called Voice of the Customer. It includes in-depth surveys, discussions and tracking of data from real human beings. Most small businesses might do a light version of Voice of the Customer in 4 steps.

  1. Create a contact list of people, including potential customers.
  2. Create a survey to use as a guide for interviewing people.
  3. Call and talk to people.
  4. Analyze the survey data and look for patterns.

The survey itself should have very open ended questions. You do NOT want to lead the interviewee. Here are some examples:

  1. What’s the most difficult part of your job?
  2. What are your top 3 challenges right now?
  3. If you could automate any part of your job, something that you find yourself doing over and over, what would it be?
  4. Is there anyone else that I should talk to?

Set a goal for the number of people you’ll contact. One hundred is a good start, but 200+ is even better. If you have a team and can talk to 500, you’ll have more data to support any conclusions. It’s also good to ensure the surveys are stored somewhere for review. It’s really easy to write down notes and then lose them later.

In every product or feature I’ve seen built, the most successful ones are supported by in-depth discussions had with real human beings. In-person conversations can also lead you to other resources and connections. For example, trade associations or conferences may not show up at the top of your Google searches. As an added bonus, some of the people you interview may become the first champions of your product.

Other Resources

Finally, a list of all the resources I’ve used in the past for research:

  • Google
  • Google Trends
  • Voice of the customer
  • Social media – Twitter, LinkedIn, Quora
  • Trade associations
  • Paid reports (IBIS, Gartner)
  • Networking events and conferences
  • App stores and reviews (Google Play and iTunes)
  • Digital surveys by using Typeform or SurveyMonkey
  • Annual reports, earnings calls
  • Job postings
  • University libraries and public libraries. Most public universities, like NC State, have resources available for alumni and community members.

There are so many resources available for market research on a budget. If you’re feeling overwhelmed and need an actionable market research plan, shoot me a note I’d love to hear from you!

Machine learning

At Oak City Labs, we’re an “agile shop” meaning we practice a project management methodology known as Agile, the specifics of which are interwoven throughout our relationship with each client. Most of our clients are entrepreneurs and organizations that are coming to us with a brand new app idea and don’t always have a background with software development projects. The words Waterfall or Agile, Sprint or Backlog often need explanation.

Waterfall vs. Agile: What’s the Difference?

Waterfall

Via

The waterfall methodology is exactly as sounds: linear. One phase in the process happens after another after another until the project concludes. From the onset of the project, each phase informs the next and must be completed before the project can proceed. If we were developing an app using this methodology, the project would begin with a set of requirements, followed by a design phase, then development, then testing and finally deployment. The client sees the working app once all development and internal debugging has been completed. Following their review, their bugs are fixed, the app would be released and maintenance begins! Hooray!

The catch? What if while reviewing that app for the first time you see that a feature isn’t meeting a user goal the way you thought it would and you know you need to make a big change to fix that? Since development and initial debugging are already complete, major changes aren’t so easy. Going back to the drawing board would likely require a change order, extra budget and a timeline delay. Oof!

Agile

 Via

The agile methodology is markedly different. The word agile is defined in the dictionary as “being able to move quickly and easily.” Nimble is listed as a synonym. Sounds about right, for projects that use an agile methodology are just that: nimble.

An app developed using the agile methodology would begin with a discovery phase, in which the client would work with us to not only lay out the strategy of the app (competitive research, user interviews, revenue strategies, etc.), but also to define a list of requirements and needs for the project backlog. These requirements are ordered by priority within the backlog. As development begins the team works through the backlog in that priority order during a series of weekly sprints. Each sprint begins with a planning session to review the backlog and determine what items will be tackled during the week ahead. As soon as a working version of the app is ready, even if not fully complete, we begin demoing the app with our clients during weekly check-in calls. And as soon as a functional app is ready, we provision our clients’ devices with beta builds so they can begin testing themselves, all the while development sprints continue. With each sprint, we add more features from the backlog and are able to adjust requirements and features as needed from feedback received from the client. This iterative approach not only enables the client to be involved earlier on, but also allows for feedback and adjustments to the requirements (aka backlog) as the project progresses without upsetting the apple cart.

So What’s Better for Your Project?

Both methodologies have their own merits, and as a PM, I’ve managed each. At Oak City Labs, we operate using the agile methodology because we believe by prioritizing features and getting in-progress builds in front of our clients’ eyes early on, agile leads to a better end-product for our clients.

Image Classification with fast.ai

Many people ask me if their app idea is a good one. They are often searching for validation of the idea before spending a ton of money building it. If it’s a market that I’m familiar with I can give a gut answer. More often than not though, I’ll start asking questions about market size and opportunity. In a few weeks, we’ll be hosting a free workshop on not only the questions to ask, but how to do this research and why it’s important. Today I’m sharing just a snippet of some of the content we’ll cover and why it’s incredibly important to businesses and entrepreneurs.

To begin, one of the most important pieces of data to find is the Total Addressable Market (TAM). The total addressable market is the size of the market that represents the actual revenue opportunity for your company. Most investors, whether external or internal, will want to understand the size of the TAM. It’s also part of a value proposition statement. And, hint: it’s most likely NOT the first really big number you find.

Let’s say you have an idea to build a mobile app for contractors to do project estimates on the fly. First, we go to our trusty and free market research tool, Google. We do a search for “contractor estimate tool market”. Not much comes up because it’s narrowly defined, so we widen the search to “construction software market”. Now we’re getting somewhere. Result #4 is a link to a press release that highlights a new market research report covering the “”Global Construction Management Software Market 2016-2020”. This is really close to what we need. However, most press releases aren’t great for actual numbers unless you’re willing to pay for the report (which can help greatly depending on the business case you need to make). This press release is fantastic for other items, like a list of key competitors and CAGR for market growth (how fast the market is growing). We can use a company from the list, Procore, and do a Google search for “Procore market share”. There are several interesting articles in the news about Procore reaching a valuation of $500M in December 2015 and another company being acquired for $600M by Oracle. Another one of the results shows Procore with a 1.5% market share. That’s a pretty nice looking opportunity based on the valuation and current market share. To really determine the legitimacy of the market data would take a few days of research versus the 15 minutes spent for this blog post.

We can already see some patterns emerging from just the one press release, but what about our original idea of a contractor estimation tool? Procore addresses larger companies, which makes sense for the numbers that we’re finding. For our app idea, we want to focus on small to medium sized contractors. We’re back to square one, aren’t we? But all is not lost, we can use that report and the other information for future reference. It can also give us ideas for key search terms for future research.

Maybe we should back all the way up, because sometimes you have to go backward to move forward. How many construction contractors are there in the US? Literally, put that whole phrase in Google. The first hit takes us to a trade organization, AGC of America. Trade organizations and conferences are great references for high-level market data. AGC sites a statistic of 650,000 employers with 6 million employees. That could be a lot of customers! Even more interesting, there’s a link at the bottom about construction spending which gives us numbers about actual spend. A mistake people make often is using the total industry spend as a representation of market size. What we really need to look for is “construction spend on software,” and then construction spend on software estimation tools. Using “construction spend on software” takes us to a Construction Software Buyer Report. It’s a little dated but we can work with it. The key stat is that “prospective buyers are willing to spend $7,766 for the purchase of new construction software.” And look! The top reason for evaluating new software is to “improve the accuracy of estimates.”

And the entire article is a fantastic source for more information. It includes a link to another article about a downward trend in spending which we should keep in mind. Most importantly, it includes an article link to exactly what we’re looking for, a research report conducted by JBKnowledge in conjunction with two other associations and a university. This should contain some good data and it does. They have over 2,600 survey respondents covering a wide range of budgets and sales volumes. It also has an interesting graphic depicting the resistance to use estimation tools in the cloud:

And one that offers more insight and potential opportunity in the market:

To sum up where we are, we’ve found a good list of competitors and we’ve started to identify the key search terms in order to find good market data. It might seem like we jumped all over the place but that is the reality of doing market research on a budget. It takes a lot of reading articles and a decent about of time. Good market research is going to take time and effort. With just 15 minutes of hunting, we found a really good, quality report on the market. Next steps for finding actual Total Addressable Market:

  1. Dig deep into the list of competitors and start to compare features. In fact, a feature comparison spreadsheet or chart is a great tool to use. While researching competitors, make note if one is a public company. If they are, reading through the publicly available investor reports like a 10-K or quarterly report can produce very insightful information about revenue and market growth.
  2. Continue searching via Google with various phrases pulled from reports and the industry. Some might include:
    • Number of construction contractors in the US
    • Average revenue or budget per contractor in the USIf you can find the first two and the percent of budget spent on software then you can make some assumptions about numbers. Let’s say most contractors spend 1% of their budget on software.# of contractors in the US * budget per contractor = total budget available.Then: Total budget * .01 = estimated spend on software.
    • Based on one report we found, we know that 71.1% of contractors use a software tool (versus a spreadsheet) for estimating. We can make a best guess that 71.1% of total contractors in the US use software for estimating. Which might be a little high given the study group. But let’s go with it for now until we find supporting or competing numbers. That same report from JBKnowledge also highlighted most contractors were not very happy with the solutions, so perhaps there’s opportunity to improve?
  3. Continue hunting for and looking on trade association websites for data.
  4. If all those numbers still sound good and we see a pattern developing, then we should move on to a very important next step: talk to people. As many as possible, in what is formally known as a Voice of the Customer survey.
  5. This is all just the tip of the iceberg, to learn more and continue the discussion, we’d love to invite you to our FREE workshop on market research. To find out more and to register visit this link. We hope to see you soon!

These days it seems like everyone’s making an app. At Oak City Labs, we love talking with entrepreneurs about their next great idea!

If you’re considering building a mobile app or are embarking on a custom software development project, we’d like invite you to join us for a free workshop next month. We’ll be discussing the most important, yet often most overlooked, step as you begin your project: market validation. We’ll also talk through technology and why it matters.

You’ll have full access to the entire Oak City Labs team for this engaging and interactive presentation, as well as Q&A and networking following the workshop.

We hope to see you there!

  • When: Thursday, April 27
  • Where: Halle Cultural Arts Center – Studio Gallery, 237 North Salem Street, Apex, NC 27502
  • Schedule:
    • Registration & Continental Breakfast – 8:30 – 9:00 am
    • Workshop – 9:00 – 10:30 am
    • Q&A and Optional Networking – 10:30 – 11:00 am

Braving the icy roads of North Carolina on January 14, 2015, we had the opportunity to attend an outstanding event hosted by Bull City Venture Partners.  Here are four takeaways to consider as you think about your next venture and the road ahead:

  1. The Market – Both panels said they were looking at the B2B space.   Lately we’ve been approached about building apps in the consumer space but almost of all of them have a potential B2B play down the road.   When planning out your product roadmap, consider the possible future B2B implications.  First ask, does B2B help accomplish your mission?  Take a look at Facebook at Work as an example.
  2. The Entrepreneur – Be coachable, know your metrics and milestones.  And do your homework.  If in conversation with a potential investor they suggest something to try, follow through.  Get their email address, write it down, put it on your calendar, do whatever it takes to follow through.  So few people follow through with things that this may be the one that sets you apart.
  3. The Network – Both panels said that “warm introductions are better than cold introductions”.   In the Triangle there are a ton of events and meetups to join to get your brand out there and get connected.  Check out the calendar at ExitEvent or search Meetup.com.   Follow people in the know on Twitter, a few of our favorites include @ExitEvent, @theRTP, @HQRaleigh, @AmerUnderground, @DerrickMinor and @RTPFrontier, but there are plenty more!
  4. Themes – Among the panel there wasn’t any particular theme or area of investment.  Investment focuses ranged from customer engagement platforms to gambling.  It still seems to come down to the entrepreneur (see #2).  For more information beyond this panel on investment themes, check out this article from Andreessen Horowitz: 16 Things.

If the ice kept you away, check out more detailed coverage including videos of the panels at ExitEvent.