Hey, I have a great idea for an app! Can you tell me, just roughly is fine, how much would it cost?

This question was one I fielded literally hundreds of times in the decade or so I was doing mobile app development in startup co-working spaces, after quit Google and Nokia to run my own app consulting business.

The number one thing I that stopped more than half of these starry-eyed appreneurs from going ahead was they had no business plan. Even if you’re trying for some sort of social enterprise, you need to keep the thing afloat.

This one pager canvas, inspired by the lean business canvas, is a way to quickly map out an at-a-glance snapshot of that strategy. Its not a pitch, its not a go-to-market, its not even a business plan yet. BUT: it’s the mud-map you must have as a minimum before you go looking for more buy-in from outside collaborators, such as your developer partners and investors.

Why Do You Need it?

Brian came to me with an amazing idea. His father had suffered for a long time with a degenerative disease necessitating more and more home aids of various kinds. Sadly when Brian’s father passed, those aids would be headed for the trash heap. But other folks need those aids for their loved ones!

What if there was an app where you could jump on, know that someone had already logged on and had some reputation to list the home aids, put up photos. Then you, also verified, go and buy them at a reasonable price. The aids avoid going in to landfill, both parties win: what a great app!

You just invented Facebook Marketplace. Except it will cost you $100k+ to build.

“So, Brian,” I said, “you want an app where first someone can log in and be verified, then list their home aids with photos. Someone else like that can buy them? I think you just invented Facebook Marketplace. Except it will cost you $100k+ to build. Why not start with Facebook marketplace first?”

Brian was so invested in the emotion of what he wanted to do - which is completely valid and important, you can’t achieve great things without passion - but he had forgotten to look at it from a practical angle. How would he differentiate his idea? What did he bring that made it any different from the options? What if his early customers were already waiting and he didn’t need a special app yet?

Brian could have saved himself feeling disappointed if he’d spent some time with the app startup canvas.

Do it with your Co-Founders

How do you do the canvas?

* TOGETHER

Most important: get the whole team in for the exercise. It’s something everyone needs to be giving their buy in for. Don’t be a solo-preneur. That is a losing proposition. I will do a session on this, in case you’re solo right now. But the number one thing you need, as someone with an app based business, is to work with others.

* WITH BUY-IN

Assuming you have the team, by the time you walk away from the session, everything on the sheet should be something you have all committed to putting in to the pot.

If you have one of your team members expertise or hours listed as a Unique Value or an Unfair Advantage then that has to be locked in at this session.

If you have one of your team members expertise or hours listed as a Unique Value or an Unfair Advantage then that has to be locked in at this session. If you’re the Ops person — like the COO for the startup — don’t accept being told to go do this on your own. It needs whole of team buy-in.

* KEEP IT LIVE

You can use a live shared whiteboard/doc eg Canva, or Google Docs, or a Microsoft Word 365 document - as long as you can take a private link to it that only your team can see.

* Set up a zoom call, with a shared doc, and plonk the canvas JPG on to it. OR

* Print out the canvas on A4, and then use a large sheet of paper & pens OR

* Get around a tablet/ipad and markup the canvas with a stylus/Apple Pen.

The whole thing should take 45 minutes or less. If you are solo now, sure — go ahead and fill it in — but you must do this sheet again when you have your team.

Sell a Product People Need

You’re going to start by using the focus statement at the bottom of the sheet. It can change, but start there. It’s based on a pitch framework from Anthony Gaddie:

* The Gaddie Pitch example

So for Brian above it might be:

You know how

* it’s really hard to deal with all the assisted living aids (problem)

* when you lost a loved one who used those aids (target = bereaved kin)

Well, what we do is

* know what its like

* provide a two-sided market place for aids

* with authentic buyers and sellers

So far we have

* re-homed 20k worth of home aids that would have gone to landfill

Enter the Items from the pitch line on the sheet

Brainstorm the Gaddie Pitch until you have it down on a sheet of paper. Then you can transfer it into the sheet:

Problem

* it’s really hard to deal with all the assisted living aids (problem)

* folks who have lost a loved one who used those aids? (target market)

Offering

* provide a two-sided market place with authentic buyers and sellers

Metrics

* 20k GTV (gross transaction value)

Unique Value

* authentic users

* founders personal experience of target market

Concept

* two sided marketplace

Just because its needed doesn’t mean it will work

Notice that I already mentioned a big problem with Brian’s idea was that it was basically Facebook marketplace?

Also we can see that folks who have lost a loved one who used those aids? (target market) is not a big TAM (total addressable market).

Finally the Unique Value of “authentic users” is a tough thing to sell. Brian’s story is one from the heart with his bereavement. But how when you expect every customer to see that value, what are you going to do to get cut-through?

Facebook users are already authenticated, and they try to have real profiles with authentic profile photographs. But there are a lot of inauthentic profiles - sometimes for privacy reasons. How will you solve this problem when even Facebook struggles?

Use the Canvas to Distill out the Truths

The Gaddie pitch is great for being bullish about your idea, and it’s a fantastic elevator pitch. But when you’re looking to make an app, that is a big investment of time and money, so some realistic modelling is needed.

What the app canvas will do is help you see that. By stripping it back to a simple proposition on the top-left part of the sheet, you can move across the top of the sheet and see if you can make it work.

I could not get people to buy [an app I built that people needed] because there was already competitor apps out there, and people already had workarounds.

Quick story: I built an app that people needed. I could not get people to buy it because there was already competitor apps out there, and people already had workarounds. My app was better, and had more features; but when your target market is a niche - like Brian’s and like mine - you must be willing to build a go-to-market strategy that can reach those folks where they are.

List the Current Alternatives

This needs to be not just what is actually a straight head-to-head competitor, but what people are using right now.

Talk to people who have the problem. What is it that pops up in peoples heads when you raise this problem right now? What has mindshare? What do you face when you find a go-to-market strategy for your app?

For Brian it would be:

* Facebook marketplace

* Selling it back to the pharmacy, community groups etc

In Brian’s case, he and his team/family had already used these above alternatives and established some good social proof by re-homing 20k worth of aids.

So your first MVP might actually be built out of these alternatives. Providing that there is a market, and the first step for your go-to-market plan, might actually be meeting your market where it already is.

Workarounds

Also workarounds, that don’t have all the benefits of your solution, must be listed:

* Taking the items to the dump (wasteful, contributes to landfill)

The app is only a channel

If there is only one thing you take away from this, please let it be this:

your app is only a channel, its not a golden goose

Go ahead and write in the top of the sheet:

Channels

* Mobile app

* Web app

A problem I used to see a lot in appreneurs that approached me to build an app is that they would look at successful apps in the App Store or Google Play store and say “I want that, but for X” where X was their idea.

It’s like going to a video production house and saying “I want a video to go viral please.”

There is almost zero discoverability in the App Store and Google Play store. If you see a successful app getting promoted in those stores it is because a team of people worked really hard for that to happen. I will address ASO and features in another post, but let me assure you; when you publish your app no-one will see it.

Brian understands that because authenticity is so important he is recruiting a talented part-time community manager to work across all their events, social media, and newsletters in a personal customer-centric way that fits with their social enterprise profile. Also Brian has identified a local sports star — a Key Opinion Leader — and a community arts figure to be the first customer zero in a visible way:

Costs: Growing

* Organic/social media marketing $50k/pa

* Hosting, domains, ongoing app costs $50k/pa

Costs: Fixed

* Initial App development $100k+

* Legals, accounting, other setup $20k

Customers: Champions

* KOL’s, customer zero

Brians has shown these folks his app mockups they are helping build the buzz.

Revenue

After getting some idea of costs, factor in operating profit and ballpark the revenue, and figure out when you can recoup initial development costs:

Revenue

* Percentage of transactions 20% x $1m = 200k/pa

Brian thinks that with his plan he can get to $1million in transactions in a year.

What is the revenue model? Will you clip-the-ticket on transactions, taking a percentage when the buyer pays for the goods? Require a membership or subscription to list on the platform? Have affiliate sales or value-add like truck rentals or tradesmen installers in Brian’s case?

Capture your Secret Sauce

Why are you the ones to execute and make this app a reality? Why would I not just download a clone of the app that was released after your but at half the price?

Unfair Advantage

* founders personal experience of target market

In Brian’s case he believes he can curate the sellers in his marketplace so that the pricing is fair, and the aids sold are in good condition. His authentic connection to communities in his target market provides customers with perceived value.

Think of everything you bring to the table

There’s a great scene in the movie Princess Bride where the hero has been so badly hurt that his two collaborators have to use a wheelbarrow to get him to the castle they plan to storm. They list their assets as Westly’s brains, Fezzik’s strength and Inigo’s sword. But Westly says “If only we had a wheelbarrow” — and of course they do!

The point is you need to think about the collaborators you have to convince to get on board. And you need to convince yourself when you are slowing down, or getting off track. List what you bring to the table, as a team.

* Previous experience - why can your team do this?

* Irreplaceable knowledge - what domain knowledge do you exclusively have?

* Location, assets, connections.

Cost structures are critical for app

Don’t skip this, or try to diminish it. But at the same time, don’t get bogged down with small ticket items. This is a big picture document and later you can have a detailed financial plan. For now, the key question is can your revenue outpace your costs, soon enough while your app startup has runway?

You’ll start most likely with some stake money. Savings, someone’s credit cards, maybe an early investor. Lots of sweat equity.

Ballpark for that running out is 18 months maximum in my experience. Your app building will require an up front spend of capital - a fixed cost - to get the bare bones MVP done. This MVP should be an absolute embarrassment. It will be a poor shadow of the apps you see on the market.

But it should be just enough to perform as a channel, as listed above, and no more.

Another huge, huge mistake I see from appreneurs and founders is they have not made any sales yet — Brian had his $20k sales — and they think they will build an amazing app that will automatically generate sales for them, if only it is as good as all those super apps in the stores.

Wrong.

You need to sell first. Then build the app. Your app is a channel.

Costs that scale up with traffic

My app design recommendations that I will share on other posts, but which are outlined in my talk “Mobile Mindset” - see the about page of Totally A Thing - include ways to make sensible decisions that reduce overheated app costs.

But Amazon or Google hosting is expensive, and if it’s not done well can go up and to the right along with the increase of your user base. This can eat your revenue. Make sure early estimates capture this, and that you don’t price your offering too low so that you cannot recoup these costs.

Costs: Growing

* Organic/social media marketing $50k/pa

* Hosting, domains, ongoing app costs $50k/pa

Boots on the ground costs

This is a very important one for apps, and it’s often forgotten at the early stages of a an app startup. This is the growing cost of an app, that requires support from real people beyond what is in the App Store or Google Play store portal.

Costs: Growing

* Community support & customer satisfaction $20k/pa

Brian gets an urgent message from Carol, his community manager, on Saturday morning. A customer has bought $2000 worth of home aids, and on arrival half of it is broken. The customer is very upset and has recorded a video on Instagram blasting Brian’s app and team. The customer does not speak English, and did not understand a message. Carol is not able to help the customer. Now Brian’s business could be torpedoed as a lot of his customers have Instagram accounts.

Brian phones his KOL, Tony, and asks for help. Tony is busy but gives Brian a name for someone who knows the customers community & can speak to them, and four hours later Brian has turned around the situation, and followup posts show Brian’s app in a good light for their fast response.

This sort of thing is not a one off. You don’t see what is happening with apps that have a lot of “Boots on the Ground” because it’s not on the app. I saw the roll-out of Uber in Australia which started in the co-work space I was in during 2012-2014. There are constant requests for help, complaints, technical problems and regulatory matters that have to be dealt with.

These will eat you alive if you have not planned to limit them, and budget for them.

How to use the Canvas

* KEEP IT LIVE

If you did it on a big sheet of paper, get a shot of it with your phone, or scan it in. Store it live - in a Google Doc, Canva, or Microsoft 365 - whatever your team can all access. Share the link to your team.

Once you have completed the canvas, create a calendar entry for a month’s time, to revisit it with your team and check in on your assumptions.

Take a copy or screenshot of the completed canvas and add it to your core team documents, business registration and legals, in a folder, so you can add updated versions as you create them.

* USE IT TO GUIDE DECISIONS

In any team setting you can use the canvas to get the team on track, and remind yourself and the team of what you already agreed you bought to the table. Check bold initiatives against the cost structure you sketched out. Any planned purchases of fancy chairs, or team trips - use the sheet to ask how do those purchases get your value out to customers?

* USE IT TO ONBOARD NEW PEOPLE

New founders, top tier collaborators or partners need a lot of quick thinking when testing how they will fit with your plan. Use the canvas as a compass: does the decision mean a change of direction? How many of the points the team previously agreed on do we need to upset to make this change, or does it fit well?

Summary

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