Business | 13 min read
How To Pitch An App Idea To Investors And Get Funding For Your Project
When you come up with a good idea, you need to implement it immediately while viable. However, some ideas require a detailed analysis before they are turned into reality.
In this article:
Such ideas are related to software development. For example, if you have an idea for an app, you should approach this issue with the utmost seriousness. App development is not the only thing you need to consider. This process involves a few essential stages to know about.
What do you do with an app idea? The goal of this article is to explain what you should do, how to start an app startup and attract investments to your project with competent pitching.
What To Do If You Have An Idea For An App? Start With Validating
“I have an idea for an app, now what?” The first question to ask. And you need to define whether the idea of an app is viable or not. So the validation is the first step to undertake. You will find the primary ways to validate your app idea below.
Discover The Potential Demand
You need to use existing tools like Google Trends or Keyword Tool that will help you find out what is popular today on the market. Because you need to know the answer to the question “Can you sell an app idea or it costs nothing?” So these tools analyze top queries, and you can get statistics on each query you are interested in.
Even if you don’t have precise statistics in numbers, you can see the popularity of that or another topic. Thus, you can see how good your idea for a new app is and proceed to the next step if everything is OK.
Survey Your Target Audience
Now you need to study your target audience and interview a few potential users. Ask them what they think about an app you plan to create, what pain they have, how they deal with this pain right now. Get as much info as possible.
Use online surveys, and talk to people on special forums, find out more about their needs and expectations. It will help you consider the requirements of the audience and build a better app. Don’t be afraid to spend your time since it is a crucial step.
Conduct A Market Analysis
“I have a great idea for an app,” you think. Well, if your app idea is not unique, you should know everything about your competitors. Enter app stores like Google Play and App Store, download apps of competitors, and analyze them. What advantages and disadvantages they have, how your app may become better, why people are satisfied or dissatisfied with other apps.
Also, if you want to start with one specific platform (iOS or Android), you can pay more attention to the relevant app store, and look through reviews, feedback, rating, etc.
Create A Page On Product Hunt
Many startuppers use Product Hunt to promote the concept of their product and get the potential interest in the product. Mind to create a logo and description of your product, and see how many likes your app may collect. If you see that your app can be attractive and people need it, it will be an additional right step in your idea validation process.
Build An MVP
A minimum viable product, or an MVP, is an excellent way to test the viability of your software. However, before you build an MVP, don’t forget about the RAT — riskiest assumption test. RAT helps you avoid primary risks before you start building an MVP. You can find out more about RAT and its development steps in our relevant article.
So, an MVP is a product with basic must-have features. When it starts gaining popularity and the number of users will grow exponentially, it is the right time to modify your app and add new neat features. Also, you can build a landing page that will be an acceptable tool to drive traffic. Now you know what to do with an idea for an app.
How To Develop An App Idea? Create A Business Plan
Your next stage is to get your app idea developed. Don’t confuse it with the development of an app. When you are developing an app idea, it means you create a business plan where all app development nuances are considered.
What should your business plan include? Let’s list everything below:
Estimate the time and budget you will need to spend on the development of an MVP. Once it is done, estimate full-fledged app development with all features you want to add.
Think about marketing strategy and how to market an app idea. It means your business plan will include the information about app promotion after release, what key metrics you need to monitor, competitor analysis, etc.
The financial plan will also be a must since it contains the necessary information for investors (revenue models, startup costs, the funding required, and other financial data).
Also, don’t forget to include all the possible risks you may face. Evaluate them to be prepared for any unexpected situations — forewarned is forearmed.
By the way, business plan creation is the process that requires appropriate skills and knowledge. Check out our article related to business plan development — you will find a lot of helpful tips there.
How To Turn An App Idea Into Reality? Find Investments
“I have an idea for an app but no money” — one more question that each second startupper has. It is a real problem. Since, without funding, you won’t be able to create something. Yes, the main goal of an article is how to pitch an app idea to investors, but there are some other ways to raise funding as well.
Personal savings. If you have personal savings and want to invest in your mobile app development, go ahead. You don’t need to look for investors. However, all other stages like idea validation and business plan creation are integral.
Friends or relatives. Maybe, your close friends or relatives are ready to help you and invest their money in your project? It is a good idea, and you can also offer them a share in your future business.
Loans. You can find a bank that will finance your project if you prove the viability and potential of your future software. But don’t forget that loan is interest-bearing, so you will need to return more funds.
Investors. Some entrepreneurs are involved in investments of various projects, so such investors are the right people you may address. You should create a pitch deck that includes all the strong sides of your project and provides investors with info on how they can benefit from it.
If you don’t know how to build a pitch deck — the article with detailed tips is at your disposal. Also, we will focus on pitch deck creation tips in the next section.
Partnership. You may find a business partner who is ready to provide you with financial assistance and become a co-founder. You just need to discuss their share and what profit your partner will gain.
Contests. Every year some app contests are held in various world regions. If your app idea is exciting and jury members find it a great example of a promising and useful app, you will be awarded prize money.
Crowdfunding. There are a plethora of crowdfunding platforms that may be helpful in your specific case. Crowdfunding is a donation from future users in exchange for additional bonuses during application usage.
Depending on the donation amount, bonuses may vary. You can get acquainted with a full list of top crowdfunding platforms and choose the appropriate one for you.
Useful Tips For Building A Winning Pitch Deck
We need to focus more on pitch deck creation since an excellent pitch deck is equal to a successful investment attraction. Thus, you need to follow a few practical rules that will increase your chances of success.
Adhere to the 10-20-30 rule. Guy Kawasaki created this rule that became a golden standard of a pitch deck creation. It implies that your pitch deck should not be longer than 10 slides, take up to 20 minutes, and the font size in the pitch deck should not be less than 30.
Start with the Elevator pitch. Elevator pitch is a short description of product conception, containing its main goals, and benefits. Your investors don’t want to spend a lot of time, so capture their attention right from the start.
Mention monetization models. How do you plan to generate revenue? Explain it to your investors. They need to know the potential financial success of your app and why your project is worth their attention (and investments, of course).
Provide a prototype. You may not have a prototype yet, but it will be an additional trick up your sleeve. Show investors a prototype of your app so they will see it firsthand. Convince them of the viability of your product.
Hire App Developers To Build Your App
Well done! You raised funding with the help of one of the listed ways above, and now you need to hire a software development team that will create a mobile or web application according to your plan. When you come up with the following question like “I have an idea for an app but don’t know how to code, so what should I do?”, you will find the answer right here.
Software developers are divided into two popular types — in-house developers and outsourcing teams. Which one is better? Everything depends on your capabilities and requirements.
In-House Software Development
In-house developers are developers who work directly with you in your company. You hire a development team, and they work in your office under your supervision. So they are regular employees of your company, and they receive a monthly salary.
As for the benefits of in-house development, they include better communication since all employees are by your side, enhanced quality control, and long-term planning. In-house teams are better for long-term projects.
But cons of in-house development teams include higher expenses (you need to rent an office, buy hardware, licensed software, pay monthly salary regardless of employees’ workload), hiring challenges (it is hard to hire a developer if you are not experienced in it). Besides, the development of software is a complicated process, and you cannot manage it if you are not a tech-savvy person.
Outsourcing development means the development of your app somewhere outside your region. Thus, you find an experienced software development company that can be located in the opposite part of the world.
What are the advantages of an outsourcing development team? First, it is a cheaper option in comparison to the in-house team. You pay for the development process only. Second, you don’t need to spend time on hiring specialists. Third, the software development team has a stack of skilled specialists. Fourth, less time spent on project control. Also, you sign an NDA (non-disclosure agreement) with developers, so it means your idea won’t be stolen.
Cons of outsourcing development are time difference (you are in the USA, for example, and they are in Ukraine), and time for immersion (you will need to explain to a development team what you need and what you want to get).
However, as for time difference, at Cadabra Studio we don’t consider it as a disadvantage. We work while you sleep. And we always keep up with deadlines regardless of the time difference, it is not a problem to hold an online meeting late at night since the best ideas always come suddenly, you know.
If you want to figure out more details about this sophisticated aspect, read an article with tips on hiring the best mobile app developers — you will find more information there.
How To Protect Your App Idea?
Competitors don’t sleep. And if you have a perfect app idea, you should keep it secret and share it with trustworthy people only. You will see below some tips for your app idea protection.
Cooperate with reliable partners. When you are looking for an outsourcing development team (if the in-house model is not suitable for you), you should only deal with responsible companies. Read reviews about the company on Clutch, check their website, look through existing feedback on any other sources. The company that values its reputation will not let you down.
Conclude NDA. A non-disclosure agreement will be your safety bag. It means that all information about the future app will remain between you and the company. But don’t forget that the company should be dependable. Otherwise, NDA cannot guarantee 100% safety.
Reasons Your App May Fail
Finally, you cannot be confident absolutely that your app won’t fail. To minimize risks, you should make sure that your app doesn’t meet the following criteria:
You addressed the wrong target audience. You don’t know what your target audience is, and you ignored detailed market research, so your app isn’t capturing.
Your app doesn’t solve any problem. If it doesn’t become a solution, why does somebody need it? The app will fail since it has zero value.
The app is too complicated and not unique. Nobody wants to navigate through the app with complex UX, especially if it is not a unique app.
Unfortunately, this list is not full. You can check all other reasons for mobile app failures in this article. Try not to repeat these mistakes if you want to pitch an app idea successfully and become a successful entrepreneur.
Wrapping up, we want to say that you must go through all these stages if you’re going to cross the finish line successfully. And the app development process can be even the simplest stage. Because you already know that your app is viable. In turn, Cadabra Studio always does its best to build software in good faith, taking into account all the client’s requirements.
We create and help. And that’s what we do. Contact Cadabra Studio — united we stand.