Great Products Consulting

Tag: product development

  • What can you do to reduce the cost of building an online platform or mobile app?

    What can you do to reduce the cost of building an online platform or mobile app?

    In my last article, I looked at some of the major things that can affect the cost of building an online platform or mobile app. This article is going to look at some of the ways you can reduce your initial costs, without severely compromising your idea and the quality of the final product.

    The most effective way to reduce costs is to look at the following:

    1. Build less
    2. Reduce complexity
    3. Build for fewer devices

    1. Build Less

    It might sound obvious, but it’s a very difficult thing to do. How do you do decide what to cut out and what to keep? Often everything will seem important, and you’ll have to make some though choices. The reality is – research has shown that 80% of functionality for custom-built applications isn’t used, so as it turns out, there might be some features and functions that you don’t need for your launch.

    There’s an important thing to note here. Building less doesn’t mean that you never build the rest of the things that you want. What it does mean is you pick the things that your potential customers and users really want. Once they start paying you, you can afford to build more. Building less has other advantages around minimising the riskiness of your project.

    2. Reduce Complexity

    This one is probably a difficult if you don’t have any technical knowledge. How are you going to know if something is complex or not? Where building less is about the number of features and functions, reducing complexity is about what goes into each feature and function. It includes taking out steps in a process, and minimising the choices and scenarios that are possible. Generally, it’s about getting the platform or app to do less in the way of processing and calculating.  By reducing complexity, there are fewer places where things can go wrong.  When things go wrong, you have to pay more money to fix them.

    3. Build for fewer devices

    As I mentioned in my previous article, the more devices you build for, the more it costs. While responsive design deals with some of the differences in screen sizes, there will be cases where there just might not be enough space on a mobile phone screen. This means that you may have to adjust your design for mobile devices, and that means more designing, more coding, and more testing. With tablets and phones, and even laptops, your developers will also have to consider interactions with a mouse versus a touch screen.

    Why should you look to keep your costs low?

    No one wants to spend more money than they need to. However, people often go to a developer with a laundry list of things to do, and then get surprised by the amount they’re quoted.

    You might find that to reduce your costs, you may only need to do some of the things above.  By spending less money upfront, you can use the extra dollars in valuable updates after your product has launched.

    The more compelling reason for reducing your costs is actually around the uncertainty of making the money back. The more money you spend, the more you have to sell to make your money back, and to ultimately become profitable.

    Even if your most pessimistic business plans show you making money, it’s worth going through this exercise to see where you can cut the fat.  This can only mean more money in your pocket, so what have you go to lose?

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  • How much does it cost to build an online platform or mobile app?

    How much does it cost to build an online platform or mobile app?

    Cost is a big factor with any investment, and software development is no different. So, how much does it cost to build an online platform or mobile app?

    The answer – it depends. You might be able to get away with $10,000 or it might cost you $200,000+.

    Yes, an infuriating and vague response, but unfortunately, very true.

    Think along the lines of “how long is a piece string?” Software development projects can be small or they can be big. This, of course, affects the cost.

    Factors that can affect cost

    There are many things that can affect the cost of software development. Here are some main ones:

    1. What features and functionality you want (and how complicated it is)
    2. Who will build it
    3. How it will be built
    4. What devices need to be supported

    Let’s look at each of these in more detail.

    1. What features and functionality you want (and how complicated it is)

    There is a direct correlation between how much you want to build and the cost. An app with 50 functions is going to cost more than an app with 10. It just takes longer to build more, than to build less.

    The next part of this relates to how complicated the functionality is. We might both define a product with 10 functions, but they may differ in complexity. Mine might have lots of different rules, require lots of information to be captured and stored, and need lots of calculations to be completed. Yours may just be displaying different types of content that has been loaded into the system. Mine will probably cost more to build.

    2. Who will build it

    It’s no secret that going offshore will get you a lower daily rate than staying onshore. You’re probably looking at a difference of $50-$75 per hour. This can add up over a large project. However, the quality may not be there.

    There is also a difference between using a freelancer versus an agency. Agencies have a lot more overheads to cover, which makes them more expensive, but they usually have better coverage of the end-to-end process, because they have staff to address all of the skill sets needed to build software.

    Another element is the experience of the developer. As expected, if you use someone with lots of experience, it’s going to cost a lot more than if you have an inexperienced one. The balancing act between cost and experience is a tough one. Depending on your budget, it may be worth the risk to give someone less experienced a chance. However, if you don’t have a lot of time to spend on the project, then you’ll need someone more experienced.

    3. How it will be built

    If you’re building a mobile app, then the question of native vs hybrid will often be raised. Native apps are built individually for each phone operating system (e.g. iOS vs Android), and in the language of those operating systems. On the other hand, a hybrid app will be built once, and then converted into apps for different operating systems. The former is much more expensive because you have to build the app multiple times, but it allows you to have a product that is made specifically for that operating system. Hybrid apps work well too – and are often a good starting point – but you have to compromise because you’re building a “one-size-fits-all” product.

    On the web side, there are lots of ways to build a platform. You can use existing platforms like Wordpress to build very functional and experience-rich applications. Or you can build from scratch. This approach can have varying costs too depending on what you want.  If you can leverage an existing platform, it’s probably going to be cheaper than building from scratch. However, down the line, you might have to replace it with something else that allows you to do all the things that you might want to do.

    4.What devices need to be supported

    The number of devices that you want to run your product on will also affect the cost. If you’re only looking at a platform that someone will use on a laptop or desktop, that’s a different proposition to having it work on all device types. Just dealing with multiple screen types adds lots of overheads. Think about the different sizes of mobile screens and you’ll start getting an idea of the effort involved. Even if your product is built to be responsive, you still have to test it on all of these devices to make sure it works as expected. If you want to support touch screens, then there’s even more stuff to design, build and test. A lot more work has to go into making your product work on multiple devices, than making it work on one.

    How much will your project cost?

    Hopefully, you’ve now got a better feel of some of the major things that affect the cost of a software project. There isn’t a standard number that someone can give you.  If you want to know how much you need to budget for, then you really need to talk to a few developers about your specific idea. They should be able to give you can indication of the cost. You also need to find out how different parts of your idea will affect the cost, and where you might be able to simplify things or reduce what you build. This might affect the viability of your idea.

    At the end of the day, you need to know what it’s going to cost to make your idea a reality. This also includes all of the other costs that you’ll incur to launch your product. To give yourself the best chance at success, make sure your budget can cover it all.

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  • Do you really need a mobile app?

    Do you really need a mobile app?

    Mobile apps are the ‘in’ thing. About 119,000 new apps were added to the Apple App store last year. However, the question I always want to answer is – do you really need a mobile app to make your idea a reality?

    Why would you make it an app?

    Apps are very powerful things. You can do so much with one. Just look at your own phone and you can do anything from take and edit a photo, create videos, pay someone from your bank account, buy something at a store, listen to music – even make a phone call!

    If your target user is on the go and the problem that you’re solving for them involves activities away from a desk, then an app works. Also, if you need to use some the standard features on a smartphone – like the camera, someone’s contacts, GPS location, a microphone – all these things make a mobile app worthwhile. Being mobile has opened up lots of opportunities to take things on the road, but it’s not the only way for people to do things.

    When it doesn’t make sense to build a mobile app

    In many cases, people have an idea that they want to deliver on a mobile app when one isn’t required. Sometimes, it may be that there is already an existing tool that can solve the problem, but a person just assumes an app will fix it. Other times, it’s just a matter of understanding the technology and what it’s good for.

    If the problem to be solved involves a person sitting at a desk, then a web-based platform may be more appropriate. Displaying things on a computer or laptop screen has lots of advantages. The size of the screen fits more stuff – this makes it easier to do more complex tasks. If there is a lot of content to display – tables, text, images, video – then it’s easier to do this on a big screen. Ever tried to work on a spreadsheet from a mobile phone?! If your idea involves anything like that, then skip the mobile app!

    Why you want to avoid building a mobile app

    The main challenge with mobile apps is they can get expensive to build, run and maintain. Without getting into the different ways of building a mobile app, the costs come from having to develop and test for different phone operating systems (mainly iOS and Android) and screen sizes. Also, you have to update your app with each operating system update. This all adds up over time.

    The other issue is that people expect a lot from apps – but they don’t want to pay for it. When was the last time you paid more than $2.99 for an app?! If I look at the apps in my own phone – minus a couple of games – I’ve paid for about two of them. Sometimes the economics of mobile apps means you have to sell a lot of them to cover your costs and make money, which doesn’t make it an attractive opportunity.

    If mobile access is key, then there are other options other than a mobile app which you can explore. There are “mobile web apps” or “mobile websites” (<ahref=”https: www.qantas.com”=”” target=”blank”>qantas.com is a good example).  These websites are designed specifically for mobile devices, but require an Internet connection.  If you open the website on a laptop or computer, you’ll see a different screen versus opening it on a phone.  It will look more like a mobile app, and in some cases, there may be different functionality.  There are also “progressive web apps” that can be downloaded from a website onto your phone.  They can be used off-line, but more importantly, then can provide a seamless mobile app experience without having to be developed as a traditional app. So, before you go out and ask a developer to build you a mobile app, ask yourself – do you really need one?</ahref=”https:>

    Are you ready to turn your good idea into a great product?
    My idea to launch checklist is your plain-English guide to getting there.
    It’s available now for only $24.
  • Common mistakes when determining whether you will make money

    Common mistakes when determining whether you will make money

    In my last article, I talked about how to figure out if you’ll make money from your online platform or app. This article looks at some common mistakes that people make when they’re assessing their idea.

    Given that the simple equation for making money is that revenue (number of sales x price) is greater than your cost, then there are three main areas where people get it wrong:

    1. Overestimating demand
    2. Setting the wrong price
    3. Underestimating cost

    Let’s look at each of these in more detail.

    1. Overestimating demand

    When looking at your financials, it’s easy to overestimate the number of people you think will buy your product. Even if you account for the time it takes to ramp up the number of users you’ll get, if you start with the wrong number, you’ll be behind from the beginning.

    In product management, we’ve got a lifecycle diagram that illustrates sales over the life of a product. Guess what it looks like at the beginning…

    That’s right. At the beginning of most new products, sales are tiny compared to later on in their lives.

    2. Setting the wrong price

    Pricing is such a complex thing. There are many ways to charge people for your products and services. Pricing models vary to include options like monthly subscriptions, tiered pricing, or freemium – but what’s the right one? And then there’s the price itself. If the numbers are too low, you may not cover your costs. Too high and no one buys from you. That’s the challenge of pricing.

    When you’re thinking about whether your platform or app will make money, you may pick a price that is too high or too low. Couple this with a demand estimate that is too high, and you won’t be able to pay the bills!

    3. Underestimating costs

    This is a big one when it comes to platforms and apps. First, your development costs are probably going to be higher than you think. Second, you’ve probably underestimated the ongoing costs.

    Unlike most physical goods, software platforms and apps have ongoing operating and running costs. You have to pay for hosting, someone to monitor your platform, fix problems, and if you’ve got a mobile app, you’re going to be updating it every time there’s a new Apple or Android operating system update. Then, there’s the user expectation that you’re constantly improving your platform and rolling out new features. All of this costs money – cash to be exact, as that’s usually what your vendor prefers.

    What can you do?

    The main problem here is that forecasting and financial planning is not an exact science. If it were, everyone would be making money.

    The challenge, then, is to reduce the risk of you being wrong. Along the lines of lean methodologies, you want to research and test all of your numbers. By testing the assumptions that you’ve made about your numbers, you can increase your chances of making money. It’s a critical part of product development. Making a guess – even a fairly educated one is not enough.  Do yourself a favour – spend the time to figure it out.

    Are you ready to turn your good idea into a great product?
    My idea to launch checklist is your plain-English guide to getting there.
    It’s available now for only $24.
  • Will your platform or app make money?

    Will your platform or app make money?

    The idea of building a platform or app and having this steady stream of passive income is very attractive prospect. Unfortunately, the question of how to make money from an app is not so clear cut.

    There are a lot of factors that affect success, but often the issue is that the numbers weren’t right in the first place. It seems obvious, but it happens in business – all of the time.

    In the simplest of terms (and sometimes that’s all it takes), your financial equation is going to look at two key components – revenue and costs. In order to operate and hopefully make any money, revenue (or cash in) has to exceed costs (or cash out). I’ve put it this way, because there are many startups that don’t make money until they sell their business (and when that happens, they can make a lot of money).  However, in the meantime, they still need cash to pay the bills on an ongoing basis.

    A simple way to gauge your financial success

    Success is a relative term and a very personal one, so your definition will depends on the goals you have of a platform or app. If you want to replace your income, then that’s a different measure than supplementing your income. It will also affect your approach to building your product.

    So, a very simple gauge as to whether you can make money is:

    1. Decide how much you want to make a year.
    2. Decide how much you can charge for your platform, and an average revenue amount per customer (e.g. what’s your price?)
    3. Divide how much you want to make by your average revenue per customer.

    This gives you the number of customers you need a year to reach your target. Does this number sound reasonable? If not, you’ll need to play around with the numbers to see if you can get the required price and number of customers to more manageable amounts.  It may not be possible. In this case, your idea won’t make you the money that you’re looking for.

    Now you have to think about the costs.

    If you think you can make enough money from your platform or app, the next part of the equation is your costs.  This will include the initial development costs, but you’ll also need to include the ongoing costs of managing and enhancing your product. On top of that, you have the overheads of running a business – insurance, marketing, advertising, legal, accounting, payment providers, banking, etc. It can all add up and eat into your hard earned revenue.

    The next step is to take your revenue every year and deduct the costs. If the number isn’t positive, then you won’t make money that year. As simple as that.

    You’ll then have to go back and either adjust your revenue numbers to cover all of these costs, or you’ll need to cut back on your costs, so that you can still make money.

    But when will you start making money?

    The thing about the above revenue number is that it’s your ideal number. The reality is that you’ll need to ramp up to that number – and it will take longer than you think. This means that you won’t be making all of that money on Day 1.  The important part of this means you need to have enough money to cover your ongoing costs. Don’t spend all of your money on the upfront development!

    An important cashflow indicator is called a ‘payback period’. This is how long it takes to pay back your original investment. Only then do you really start making money (after taking out your ongoing costs). Most software development projects in corporate land look for a payback period of about 18 months to 2 years. As a small business relying on your own money, this will probably be longer, as you may not have access to the same resources you need to scale quickly.

    What next?

    The above is a very simple view of figuring out if you can make money, but it will give you a quick indication of whether the numbers can stack up. For a more detailed view, talk to an accountant or financial advisor where you can get advice on a model to suit your specific business.

    The bottom line is that it’s not so easy to make money as you might think. Even the big startups don’t actually make money yet, and their worth is based on their valuation as a business. However, if you’re a small business owner looking to enhance your income in the short to medium term, you do have to have a good handle on the numbers before you start.  Otherwise, you’ll find yourself running out of money before you can figure out if your platform or app can be successful.

    Are you ready to turn your good idea into a great product?
    My idea to launch checklist is your plain-English guide to getting there.
    It’s available now for only $24.
  • What does CRUD mean?

    What does CRUD mean?

    When you have an idea for a platform or app, you might start paying closer attention to ones you use today, or new ones that do similar things to what you want to do. What you might notice is that there are some common things that you do in each of them. If you’ve added something, viewed a list of things; maybe even updated or deleted something, then you’ve performed a CRUD operation. In this article, I’ll explain what they are and why you need to know about them.

    What does CRUD stand for?

    CRUD stands for Create, Read, Update, and Delete. These words refer to some very common things that you do on a daily basis. You add (or create) a post for Facebook. Then you view (or read) other people’s posts. Maybe you edit (or update) an image in Canva, or delete one that you don’t like. If you start thinking about your interactions with different platforms and apps, you’ll find these are functions that are common to them all.

    Seems simple enough, how do you use them?

    Understanding what CRUD means is most important in the defining what you want your product to do. It relates to what the users in your platform or app should be able to do. As you think about the different processes that your users will go through to achieve their goals or solve their problems, you should also think about what CRUD operations they should be able to do.

    It might seem simple to say – “oh yeah, they should be able to do all of those things”, but sometimes, it doesn’t end up that way. Maybe some users should be able to do all four things, but other users should only be able to view. What happens if you update a master list? How should the updates be distributed to users? What are the implications down the track if a person can delete something? Is it a permanent deletion where it is gone from the system altogether? Or maybe it’s just a case of “hiding’ it from the user to make it appear like it’s been deleted.

    All of a sudden, you now have to start digging deeper into what you want your platform or app to do. For every feature and function, you should be thinking about what your users will be doing, but also what you want them to be able to do. Take some time to ponder all of this, as you’ll find it opens up a lot of complexity in your system that you might not have been aware of before.

    What if you don’t do this?

    The problem is that CRUD operations seem so obvious to people, that they either don’t even think about them.  Alternatively, they subconsciously assume that their developers will build them anyways – because they’re a part of every system they’ve ever used.

    The thing is – developers can only estimate and build based on what’s specifically stated. It’s hard for someone to anticipate everything that’s not written down. If there’s something specific in the way you want your platform or app to work that’s not obvious to someone, then your developer either won’t build it, or they’ll build it in a way that you didn’t want. Who can blame them though? They’re not mind readers, and they’re running a business too – so the only way for someone to deliver to expectations is to have a clear definition of what needs to be built.

    Imagine that you have a five features in your platform or app, and you only define your product with the create and update functions, but not the read and delete ones. All of a sudden, you’ve only covered 50% of what you need. Fast forward a few months, and your developers will be asking for more money!

    So, when you’re looking to turn your idea into a product, consider your CRUD operations. Even though they sound simple, they have a big impact on your development project both in terms of the features that are developed and the overall cost.

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  • What’s the difference between Web Design and Web Development?

    What’s the difference between Web Design and Web Development?

    Do you know the difference between web design and web development? I often see people looking for recommendations for one or the other, but did you know that when you’re building an online platform or mobile app, you might actually need both?

    Traditionally, these two disciplines were quite separate and distinct. However, over the years, the line between the two has been blurred.  In this article, I’ll talk about both of these terms, and how they might impact your product development project.

    Web Design

    As it implies, web design primarily looks at how the site will look. Think colours, fonts, images – the general look and feel. It also considers the usability of the site. However, web design is now also so much more – which is where the confusion occurs.

    Web designers can also build websites. This often includes the marketing-focused websites that we all use for our businesses. The ones that explain who we are and what we do – these are called “static websites”. They can do this with the help of website platforms (or content management systems) like Wordpress and Squarespace, which usually have drag and drop website builders. These are further enhanced by “themes” that are essentially templates of “pre-built” websites. These allow designers to use their design skills to craft a web page for you.

    To even further extend the power of web designers, are “plug-ins” or “apps” that are essentially pre-built tools, which interact with the website to give it extra functionality. They allow you collect email addresses, and send them to your email marketing or CRM tool. They can also be as sophisticated as allowing you to have a membership section or accepting payments.

    A good web designer will also have some SEO skills as well. As a marketing tool, your static website should be easy to find through search-engines.

    Web Development

    Even with the increase in the scope of work that a web designer can cover, there are still limitations to what they can do – unless they really learn how to code. While most web designers will be able to do some front-end coding (using HTML and CSS), these programming languages focus on how things look on the screen. In order to do more complex things – you need a web developer. 

    Web developers have a different skill set. They can build a much more dynamic website that can capture information, store it, and do something with it. Developers can build applications that allow you to move and manipulate objects. All of the website builders, themes and plugins were built by developers.  This means that web developers are in a much better position to build a more specialised platform; with unique or specific features.

    Why do you need both?

    As you can see web designers and web developers do very different things. While they can both build you a website, it depends on what kind of website you want.    

    While a web developer can build you a static website, it might not look very good. This is not what developers are good at. However, if you want to introduce automation to your business, or to extend your business offerings through an online platform, then a developer is more likely to be able to help you.

    If you’re building a new online platform that you want to market and sell as a product, then you’ll probably need both. A web developer will build your platform – with all of the screens and components that you need to give you the features that you want. Meanwhile, the web designer will create the static website that you need to market your platform.

    But there’s more…

    Unless your web developer has some interface design (UI) and user experiences (UX) skills, you’ll also need one or more people to make your platform look nice, and to make it user-friendly. While, a web designer might be able to create a visual design for your platform, they may not have the skills and experience needed to design the user experience.

    The next time you’re thinking about who you need to turn your idea into a product, along with UI and UX designers – consider both web designers and web developers.  If you’re very lucky, you might find a superstar that has all of the skills outlined in this article! 

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  • 5 Foundations for non-tech people with platform or app ideas

    5 Foundations for non-tech people with platform or app ideas

    Software technology projects can be tough at the best of times, but what happens when you have an idea for an online platform or app,  and you’ve never done anything like it before?  In this article, I’ll explore some of the ways that non-technical people can get the foundations to set themselves up for success.

    As someone that’s been in the industry for a while, I can tell you that there’s no such thing as a “perfect” development project. However, if you come from a non-tech background, there will be things you just don’t know about, and frankly, it’ll make life more difficult for you. 

    Here are a few ways that you can get on the right foot:

    1. Understand the process
    2. Learn how to brief your developers
    3. Know what to build
    4. Keep on top of your development project
    5. Don’t forget the biz

    1. Understand the process

    Software and software-related product development processes are beasts in so many ways. The scope of knowledge and experience that people working in the industry have can be outstanding. Every day, I am awed by what people know and can do. So much goes on behind the scenes of tools, apps and applications that you use every day. This is not a journey where you can close your eyes and hope for the best. 

    While it’s not feasible or even necessary for you to become experts in this area – that can only happen over time – you should at least understand how the process works. You want to know what’s ahead of you and what’s expected of you. If you know how things are supposed to work, you can recognise when things are going wrong.

    2. Learn how to brief your developers

    A critical step in any product development process – not just a software one – is defining what you want (a.k.a writing requirements). When building online platforms and mobile apps, this is particularly difficult.  You have to describe your product, in detail, to someone who thinks in a completely different way than you do.

    Even the most basic digital products includes multiple features and functions. You’ll need to tell your developer what you expect each of those things to do. This means you have to become the expert on your product. There are many pitfalls and considerations when you write your requirements, and a non-tech person, you just won’t know what these are.

    Bottom line – if you can’t brief your developers properly, you won’t end up with the product that you want.

    3. Know what to build

    Along the lines of briefing your developer is actually understanding what you should be building. In software, you have an opportunity to test and learn.  

    As someone that’s not familiar with a very complex process, this presents a unique risk-mitigating option for you. Instead of pouring tons of time and money into an all-singing and all-dancing product, that may or may not make you enough money to pay off your investment – you can build it piece by piece. By knowing what to build, you have a greater chance of scaling and growing a product that people actually use. Ideally, you want to aim for the smallest possible product first.   

    4. Keep on top of your development project

    Once your development project is up and running, you can’t just sit back and wait for the finished product. Ultimately, as the owner of  your product, you want to make sure your developers are doing their job. You don’t want to wait until the end to find out what they’ve built is not what you expected.

    There are also lots of things along the way that can derail your project – both in terms of budget, schedule and what is delivered. Look for ways to be involved in your project. This might include regular status reports or meetings, design documents, sample screens, etc. If you can head potential minor issues before they become major problems, you’ll save yourself a lot of headaches.

    5. Don’t forget the biz

    Development costs are going to be one of the highest, if not, the highest cost that you’re going to have to get your product to market. The problem is, this often makes people forget about all of the other things that are needed to launch. 

    There are legal considerations around terms and conditions, and privacy. Make sure you protect yourself in terms of insurance and business structure. From an operations point of view, you also have to think about how to support your product – how will people contact you if they have a questions or a problem. An online platform or app is a 24 x 7 business so you need to think of the best way to handles inquiries. 

    The point is that your product is more than the platform or app you want to build. Products are often successful because of all of the other things that are needed to make it work.

    The bottom line

    Non-technical people build platforms and apps all of the time. 

    Sure, it would be less expensive if you were a developer, but then you probably wouldn’t have all of the other skills needed to launch and grow a product. 

    Gone are the days when you hire a developer, and trust that you’ll end up with what you want at the end. In these competitive times, knowledge is power. The more you know about software and product development, the more power you have to control your destiny. 

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  • How your pricing model affects the development of your product?

    How your pricing model affects the development of your product?

    Platform and app pricing plays an important part in the success of your product, but did you know that it has an impact on how developers build it? Today’s article will look at how your pricing model can affect what you want your product to do.

    The approach for monetising your platform or app will vary on a case-by-case basis. Some will charge from the beginning, some will be free forever (e.g. make money through advertising or selling data), while others will be free with paid upgrades (e.g freemium) or have tiered pricing based on usage. Then you have marketplaces and directories that charge one or both parties in a transaction.

    Pricing itself is a whole other article, but what I’m looking at today is how that decision can affect how your product is developed. You’ll want to consider these things as you define your product. I’ll highlight some of the things that you might want to think about with the following pricing options:

    • One-off upgrades
    • Access to additional features on an ongoing basis
    • User and usage limits
    • Marketplaces and directories
    • Non-standard pricing, discounts and introductory pricing

    One-off upgrades

    If your pricing model offers to remove advertising for a fee or to add features for a one-off fee, then you’ll fall into this category.

    When defining your product and writing your requirements, you need to think about what will be free and what won’t. It’s usually a basic upsell and isn’t too complex (you either have it or you don’t). This will be important to your developers as they’ll have to restrict access to functions for users that haven’t paid for it. They’ll have to get the system to recognise who has paid for it and who hasn’t. You’ll also need to how the customer will choose to upgrade and how to collect the payment.

    Access to features on an ongoing basis

    Unlike the above, this model involves charging people an ongoing subscription to access features and additional functionality. This time though, things can get complicated. Some things might be charged a one-off fee, while others require users to subscribe to a different plan.

    As you define your product, you’ll have to decide what people should have access to. It could be an option within a function (e.g. buy a paid picture for a project in Canva). Alternatively, the upgrade could be for a completely separate function (e.g. a “premium” plan to remove branding in a video-making platform). Spend some time thinking about what types of plans you want to have and what features and functions can be accessed in each.

    This model has payment considerations too that affect both technical development and business processes. Do you need to process one-off payments? Will users be able to downgrade a subscription? What happens if a recurring payment is declined?

    User and usage limits

    Another pricing model may charge based on the number of users. A lot of B2B platforms work this way. Pricing changes based on the number of people that access the platform or app. Alternatively, you may apply limits to what a user has access to. This might be the number of projects that can be created, the size of individual projects, or the amount of storage available.

    All of these models will require your platform to track the number of users and usage to see when the conditions are met. You also have to think about what happens when a user or business meets these thresholds.

    These models also have a frequency piece – how often do these limits apply? Will it monthly? yearly? etc.  Also, what will be the process for increasing the limits?

    Marketplaces and directories

    Unlike the above models, marketplaces and directories have two sets of users. There is someone to buy or search, and another to sell goods or provide a service.

    In this case, the main question is about who will pay. Then there are a set of functions around when people will pay, and how much you will charge them. Unlike the previous models, there are lot of different pricing options available – fixed fee, percentage fee, fixed plus percentage, minimums, maximums, bundles, etc.

    When you start charging in percentages, your platform will have to calculate these values, so you need to think about all of the rules that go along with this. If you decide to sell a bundle of 10, then the system will have to track as each one is used.

    Non-standard pricing, discounts and introductory pricing.

    When thinking about your pricing model, you also want to consider different pricing promotions that you might offer. While most payment providers will support one-off pricing, discount codes and recurring payments, you want to check out their ability to support introductory pricing (e.g. first year at a discount, etc) and instalment payments (e.g. pay the entire amount up front vs monthly repayments).  Your platform or app itself will have to recognise these different payment options and ensure your users are accessing the right features and functions.

    Wrapping up…

    As you can see, your pricing model is not just important to making money. Pricing can actually affect the definition of your product – which means it can cost more to build some models than others.  So, when you’re writing the requirements for your platform or app, take some time to consider how you will charge your customers. This will make sure that your pricing model can be incorporated in the development of your platform or app right for the beginning.

    If you want to turn your good idea into a great product, then my Idea to Launch Checklist is your plain-English guide to getting there. It’s available now for only $24.

  • Does your platform or app solve a problem?

    Does your platform or app solve a problem?

    Ultimately, a product or service exists to solve a problem, or it addresses a need or goal of the customer or user. Without that fundamental piece, a platform or app is doomed to failure. Understanding this is an important part of validating your idea.  This article looks at what to consider, and why it’s important to understand the problem your solving when you want to build a product.

    So, what’s the problem, need or goal?

    At the end of the day, you don’t want to spend your time and effort building something that isn’t helpful to people in some way. Whether it’s around productivity or maybe just entertainment, your platform or app has to have some purpose for people to use it.

    Generally, we talk about solving problems with products. That’s because people are driven to look for products or solutions because they’re having trouble with something. Some problems are more trivial (“I’m bored, let’s find a game to play” or “I’m hungry”) and some things aren’t (“How do I do my taxes?” or “What insurance should I buy?”). Bottom line – if there’s no problem, you’ll find it very difficult to get people to use your platform or app.

    It’s not always doom and gloom, and that’s why I like talking about needs and goals too. To me, needs and goals are a variation of a problem, but with a positive intention – if you’re looking to meet a need (“I want to learn a new skill”) or if you want to achieve a goal (“I want to book a holiday in Perth”), then you’re equally motivated to find a solution.

    Regardless, in order for it to be successful, your platform or app needs to do something useful for someone.

    Is that problem painful enough for people to seek a solution?

    Your platform or app is the solution to a person’s problem, need or goal. By using your product, your clients and customers will achieve the outcome that they’re looking for. But how painful is the problem? Is it a little itch or a full-body rash?!

    If you think about the buying process, there are generally a few steps that people go through before pulling out their wallets and purses. This means that you want to make sure that the problem you’re solving is painful enough for people to go looking for a solution. If I have a hole in my sock, do I look for a hole-fixing service or do I just buy new socks?  Conversely, if you’re talking about needs and goals, then you’re thinking about how important this is to someone.

    If you’re product is free or low cost, then it’s less of an issue as it’s low-risk for an individual to try your service or download your app. People will use it as an option for evaluating different alternatives. The challenge then falls into my next point.

    Are there enough people with the problem? And how often do people have this problem?

    I’ve combined these two questions together because they speak to how many people you need to use your platform or app. You’ve found people with problems, and they’re painful enough to look for a solution. But are there enough of them?

    Unless you’ve got a high-ticket price, volume is key to any platform or app. There are a lot of overheads to cover with a platform or app. You’re looking at 10-20% of your initial development costs to keep your systems running every year. This means there needs to be enough people with the problem to use your product, so you can pay your bills. This is a really important point. Be realistic about the number of people that you can get to sign up to your platform or app when doing your financial analysis.  This is usually where a business falls over.

    Another element of the volume equation is how often will people use your product. Problems are not all equal in importance. Some problems can be solved as a one-off (e.g. buying a present) and some happen over and over again (e.g. ordering takeaway). You can solve a problem in a minute, while others take years. If you have a subscription or membership product, then you want problems that take a while to solve. For smaller problems, you want people to keep coming back every time they encounter the problem. While it’s important to have a large number of users for your platform or app, you also need them to use it again and again.

    Why should I care?

    If you don’t first understand the problem, need or goal, then it’s no point building a solution. No one will use it. “That would be cool” is generally not a good reason for building a platform or app.

    I’d also encourage you to explore the problem. This involves thinking about how painful it is. You want to understand why people might have the problem, and what motivates them to want to solve it. If the problem you’ve identified isn’t a big deal for them, then you’ll have a tough time convincing them that you have a solution for them. This research will also help you to build a better product by making sure you address the pain.

    Finally, think about how many people this problem affects. How many of them you could realistically get to use your platform or app, and how often can you get them to use it. This is critical to the long-term success of your product. Your product may be great at what it does, but without volume and consistent use, you’ll struggle to keep it going.

    At the end of the day, products are created to solve problems, so take some time to think about the one that you want to address in order to have a successful platform or app.

    If you want to turn your good idea into a great product, then my Idea to Launch Checklist is your plain-English guide to getting there. It’s available now for only $24.