Identifying a Billion-Dollar App
When was the last time you were performing a routine task and thought, “I wish we had an app for this!”? As an entrepreneur, that thought probably crosses your mind on a daily basis. After all, it’s getting easier to envision ways mobile apps can help you grow your business and earn more money. But what most entrepreneurs struggle with is how to determine
which app idea will provide the most bang for their business buck.
My company recently identified eight apps for a client that, together, would provide a return of up to US$323 million within the first year and a billion dollars over the course of three years. How did we come to this conclusion? What steps did we take to determine which apps were right for our client? In many ways, investing in an app is a lot like investing in a new business— it takes plenty of planning, patience and strategy. Here are seven steps we followed to help our client identify the right apps for their business:
Outline the Opportunity: Start by white-boarding your business strategies and goals for the year. For example, your goals might be to increase revenue, improve margins or reduce customer turnover. Chances are you’ve already prepared this information, but it’s important to put this up somewhere so you’re always reminded of the “why.”
Identify How You Will Get There: Each goal you’ve white-boarded will have one or more workflows. If your strategy is to increase sales by 10 percent this year, think about all of the workflows you use to make this happen. Record the workflows so you can refer back to them when you kick off the app-selection process.
Know Your Roadblocks: The next step is to identify all of the issues that could get in the way of these workflows functioning optimally. These roadblocks typically include things that take up time and resources. For example, face-to-face sales may include a workflow that involves filling out a paper order form, driving the form back to the office and entering the order information into a CRM system. The roadblocks in this process include using paper forms that must be keyed into a system and the need to drive back to the office to place orders.
Apply Mobile Apps: Now for the fun part! Looking at the roadblocks you’ve listed, envision ways you can apply mobile apps to alleviate these issues. For example, a searchable catalog available on an iPad may reduce the time your sales reps spend writing orders, or a quote-creation app may alleviate order-entry mistakes and speed up fulfillment. This is the chance for you to get inventive!
Score the Apps: Once your app concepts are developed, you can begin scoring them to determine the value they will bring to your organization in terms of time saved or revenue potential. I call this Return on App (ROA). For example, saving 10 percent of time on a task that costs the company US$1 million annually delivers a cost savings of US$100,000 a year.
Assess Other Criteria: In addition to revenue potential and cost savings, look at other criteria that can affect the success of your mobile app. These criteria are specific to each company, but often include things like the overall cost to implement the app, the effort needed from your IT team and how excited users will be to adopt the app.
Create a Chart: Once this criteria is gathered, create a chart of potential apps that will provide the most value and have the best prospects for adoption in your organization. Charting apps also helps organizations develop a mobile app strategy that prioritizes and plans for the future development of those apps that are chosen.
Nowadays, it seems like every business has an app of some sort, but not every business is making money or achieving growth because of their app. By following these steps for app selection, it will be easier to see how mobile apps can produce significant returns and contribute to the overall growth of your business. At the end of the day, the app you choose can mean the difference between making nothing and making millions.
Will Scott is the president of Lextech Global Services, a technology solutions firm that helps businesses optimize workflows by identifying, designing and developing suites of custom mobile apps. Fun fact: Originally from Zambia, Will has lived in seven different countries and traveled to more than 30 before making Chicago, Illinois, USA, his home.