by Jason Johnson
Tech is the new sexy, and founders of technology companies are the new rock stars. Each day, my social media timelines are filled with founders who’ve launched new products or closed million dollar rounds. Our love affair with tech has even reached the big screen, where movies such as The Social Network (2010) and Steve Jobs (2015) captured our imaginations. With all this positivity surrounding technology, it’s no surprise that many aspiring entrepreneurs are interested in launching tech ventures, or at the very least adding a tech component to their business. With the right people on board, launching a tech venture can be relatively inexpensive in comparison to launching a traditional brick and mortar business such as a coffee shop or a laundromat. However, there are three things that EVERY aspiring tech entrepreneur should do before shelling out cash to build an app or software platform.
#1 Find Your Customers’ Pain Point: Technology is about solving problems. Whenever I meet another founder, their first question isn’t about the features of our platform, but about the problem that we are trying to solve. The hallmark of any successful business is one that solves a problem for a large number of people.Before you invest time and resources in developing a platform, first find a problem you’d like to solve. After identifying a problem, talk to potential customers to see if they share that pain point. This can be done through interviews, surveys, and focus groups. If you discover that a lot of people also have this problem, then it may be worthwhile to work on developing a solution. This first step alone can save you thousands of dollars and months of time.
#2 Develop a Low Tech Version of Your App Idea: Once you discover that your customers have a problem, then the next logical step would be to work on a minimally viable product (MVP). An MVP is a version of your product that simply has the basic features needed to test its viability on the marketplace. Since tech is merely a tool, your MVP should be specifically designed to solve the problem you’ve identified. However, it is more cost effective to develop a low tech version of your product to ensure market demand before spending money on an initial prototype. For example, I wanted to solve the problem of awkwardness when meeting others at networking events. After talking to several people, I found that many people found approaching others at networking events challenging. Having a psychology background, I thought that knowing the personality type of other guests at events would make networking easier and more enjoyable. To test this hypothesis, I created an event called Personality Powered Networking. Event attendees got a short four question personality test, a name tag with their personality type and a socialization guide that let them know how they were compatible with everyone in the room. After several events, we found that 95% of guests said that knowing the personality type of other guests made networking easier and more enjoyable. Once we got that feedback, we started working on Konveau, an app that uses personality compatibility and common interests to helps attendees develop connections at social events.
#3 Build A Basic Business Model Using Lean Canvas: Also, before spending money on developing an app, you want to first ensure you have a way to monetize it. Regardless of how cool your app is, investors will not fund it unless it makes money. That’s where developing a Lean Canvas comes in. The Lean Canvas is a one page diagram that allows you to sketch out your business model. Once you complete your Lean Canvas, you’ll have the foundation for the nuts and bolts of your business including how you’ll monetize the product, who your customer is, and key metrics you’ll use to monitor your growth (which are very important to investors). The worst situation for a founder to be in is to have a product that no one wants after spending extensive time and money on developing it. Following the steps above reduces the likelihood that you end up in that situation.
Jason is a subject matter expert in personality psychology and the CEO and Co-Founder of Konveau™. He is also Entrepreneurship Program Manager at the Chicago Urban League’s Entrepreneurship Center, and a Ph.D. candidate in Organizational Leadership.