This post was republished with permission from the BDEC, Irvine.
This series of posts will walk you through the process of planning, market testing and developing an app. The app we’ll talk about is called CrashRespond. It will automatically detect car accidents and upon detection, send a text and email alert to up to 3 pre-selected contacts.
Our goal is to give worried parents of new drivers some much needed piece of mind for $2-$5. We believe that when parents are worried about their kids driving around out in the world, they will relax knowing that CrashRespond would notify them if their kids were involved in a serious accident.
Research the Competition
We found several apps that would detect car accidents automatically, but they all had fewer than 100 sales. We attribute the poor sales to the fact that these apps required the user to activate the app before getting in car! We will market this app to parents for their kids, and there is no way you’ll get a teenager to remember to activate an app before they start driving. If we get CrashRespond to activate automatically once the user started driving (by monitoring GPS location to detect speed), we could succeed where other apps failed.
After researching the competition, we set about following the Lean Startup Method by identifying our core business hypotheses(beliefs upon which our business will succeed or fail) and testing them.
Hypothesis 1: Parents would be willing to purchase this app for their new-driver son/daughter.
To test this hypothesis we created this survey, and we used it to interview random people at a local outdoor mall and handout to our friends and family. After 2 weeks and 208 responses, here is what we learned:
- Most parents(52%) would purchase the app based on its description in the survey.
- 30% of parents said they would purchase the app depending on how much the app cost, whether there was the possibility of false-positives and whether or not the app drained phone resources.
- The average price that parents said they would pay for this app is $5.52.
- 18% of parents said they would not purchase the app because they believe CrashRespond will cause them to worry unnecessarily.
- 23 people gave us their email addresses because they wanted to be updated when the app was finally released
You can see the full results of the survey at the end of this post.
We believe that we can convert the majority of the ‘Depends on…’ responses into ‘Yes’ responses just by having a well-made and reliable final product. If this is correct, then our survey effectively has an 82% ‘Yes’ response rate! Satisfied that there is a market for CrashRespond, we then set out to determine the technical feasibility of the idea.
Hypothesis 2: CrashRespond can be automatically activated once the user is driving
To test H2, we contacted local developers (and CSUF alums), Prosperitech, gave them our specifications and requested a quote.
Prosperitech researched the app with their development team and concluded that the app can be created according to our specifications, but only on the Android platform. iOS has several restrictions that prevent apps from using the GPS to automatically determine when the user is in motion and from accessing the phone’s cell service and contacts list to send automatic messages in the event of an accident.
Hypothesis 3: There are enough 14-18 year olds with Android phones to justify the development of this app
We tested this Hypothesis in two steps:
1. Pew Research says that, as of March 2012, 23% of kids aged 12-17 own a smart phone.
2. 2010 census data gives us the population for 10-14 year olds(20 mill) and 15-19 year olds(22 mill), so we can’t get a direct comparison. But if we just assume that half of 10-14 year olds are over 12, then we know that there are approx. 10 mill 12-14 year olds. Using the same math we can say there are 11 mill 15-17 yr olds.
Total potential customers = 4.8 million (22 mill 12-17 yr olds * 23% smartphone adoption)
These numbers, though rough, give us a basic understanding of our potential market size.
We have a quote for development and basic marketability information. Next, we’ll test our 4th Hypothesis: That we can generate interest and drive sales of the app through it’s website. We’ll test this by creating a full-fledged sales website for the app. H4 will be proven true if a certain percentage of site visitors click the “Download this app now” button. The button will take users to an email signup form, but its safe to assume that the users who click the button would have purchased the app if it was available. We’ll drive customers to the site by taking advantage of $100 free Google AdWords credit that I get as a member of the Google Engage program and $50 free Facebook ads that I got when I purchased a Facebook Marketing book.
What do you think? Did we miss anything? Do you think that our survey was so unscientific that it can’t be used even to roughly judge customer interest? Do you disagree with our market size estimates? Sound off in the comments, we’d love to hear your thoughts!