How do you demonstrate your new app is compelling?

Start-ups aren’t just for technical folks anymore.  Entrepreneurs with good ideas come from all disciplines, and can partner with developers to turn their vision into a product or service.  Folks who are able to recognize and analyze communication processes and needs (hey, listen up, comm majors!) are in a great position to invent great apps.

Michael Cusumano gives some great advice to would-be entrepreneurs as well as to their potential funders and investors.  He lists 8 things that should be used to evaluate the strength of a start-up proposal:

  1. A Strong Management Team
  2. An Attractive Market
  3. A Compelling New Product or Service
  4. Strong Evidence of Customer Interest
  5. Overcoming the “Credibility Gap”
  6. Demonstrating Early Growth and Potential
  7. Flexibility in Strategy and Technology
  8. Potential for a Large Investor Payoff

This is a fairly wide ranging list, and each element is important. When I work with students–whether they are studying communication, computer science, or media design–I challenge them to think more deeply and strategically about two items on this list: developing something compelling, and providing evidence that people will want what you’re offering.

Many entrepreneurs struggle to articulate what is compelling about their idea. We all can have this problem — I mean, we’re just, you know, excited by it…and…it’s so obvious that others will feel the same way, right?  As Cusumano points out, though, the bottom line is that entrepreneurs need to show that people will (a) use their product or service and (for many ideas) (b) pay for it.  So, to say that an idea is compelling is not to say that the idea is great in some abstract way that we can wax on about.  Instead, it is to concretely demonstrate its value to a base of users.

A mistake some investors and funders make is to accept as evidence that there are already a group of beta users or testers and maybe plans for marketing.  Cusumano cautions against this, but doesn’t really offer much advice on what to do instead.  He does advise to have at least a prototype or a limited engagement of a service.

So how do you get out of this Catch 22? Entrepreneurs need investments to build to get the users, but they need users (it seems) to get the investment.

This is a fundamental question, of course: how do know which investments will be successful if you are looking at new ventures? As Cusumano’s list suggests, it’s possible to look closely at things like the business plan, the leadership team, the market and how well the new venture is positioned in it.

These other elements are important, to be sure.  But if the product is not compelling, even these will not be enough. So, what should we expect instead?

I advise designers to build their case from a social or communication perspective.  At the most fundamental level, show that people, regardless of the technology available to them, have a strong need for something or already have a strong interest in something. Be as specific as possible without (and this is most critical and the hardest part) slanting your observations toward what your new product provides.  The way you answer this question will set up the challenges you’ll have to address for growing your user base. The basic assumption operating in my advice (widely supported by research in many areas) is that most people (not the early adopters, not your friends and family) don’t go around looking for change.  We tend to stick with habits. We don’t like uncertainty.

If your idea lets people do something that they can already do reasonably well with other means of communicating (including using other products or services) concentrate on where is a low threshold for adoption.  Show how your idea will seem very similar to the user but will be valuable because it is more efficient, more accessible, less costly, more easily disseminated, etc.  I call this a converting idea. Think of Encarta which was successful for many years because it worked hard to look like an encyclopedia.

If your idea lets people do something different than what they can do now, it is better if what it does is let people do more of the same or what they do now “plus” something added on, rather than something completely new. Show how users can get all of the main functions they expect and they will be able to do something they couldn’t do otherwise. I call this an augmenting idea. Think of Wikipedia.  It didn’t do quite as good of a job as Encarta of looking like an encyclopedia, but it did offer very timely information on a much, much wider range of topics (those that might not have made the cut for Encarta).  It does well enough as a converting idea, but really shines as an augmenting idea (and lately has increased its focus back on converting–to better match our expectations of what an “encyclopedia” looks like).

The last type of idea is the transforming idea.  These are the ones that get designers most excited.  These will “change everything.” These will reinvent, reimagine, revision. And most of them will fail.   Those that don’t will need evangelists to change the way people think or other inducements (like organizational policies or new laws) that require them to change.  Remember the basic assumption: Most people, most of the time, avoid change.  If your idea requires the user to completely rethink the way they see something, most people won’t go to the effort.

Now, the nice thing about seeing all of these together is that there is a sweet spot to aim for.  Find the idea that can start as a converting idea, grow into an augmenting idea, and then finally prove itself to be a transforming idea.  Any fantastically successful idea will follow this path. Two examples:

  • facebook tapped into the social processes already adopted by college students, augmented that with novel ways of showing the information (but the information itself was still familiar), and finally has transformed our idea of what it means to be connected to one another.
  • Youtube was familiar to watching home movies or obscure cable channels, it just let us do that online. As content became more mainstream, it stayed familiar – like watching television.  Entrepreneurs saw the augmentation potential and began creating native content.  Now it has transformed our understanding of the broadcast landscape, with mainstream media integrating comments and feedback and youtube “programs” being produced for traditional television programming.

And this pattern is repeated over and over again among successful ventures. Compelling ideas tell a story that center on ordinary, typical, even mundane communication and social processes. They don’t need evangelists (though evangelists could help in accelerating change) and they don’t emphasize how cool the technology is (though indeed it might be).  Don’t worry though: because working and living with each other is still awfully complex, this still leaves lots of room for great ideas.

Cusumano, Michael. (2013, October). Technology strategy and management: Evaluating a startup venture. Communications of the ACM, p 26-28.