Have you ever created products following your gut feeling? If so, you might appreciate the ideas from my favorite book, “How to Fail at Almost Everything and Still Win Big”, about the value of execution over the uniqueness of the idea, and the importance of gaining knowledge to increase your odds of getting “lucky”. To further boost the likelihood of success, it's crucial to understand the product’s potential, move beyond intuition and leverage Product Discovery Tools. In this article, using our real app as an example, I will illustrate how we validated product ideas and strived to achieve product/market fit.
About the Team
In 2023 an app for learning foreign languages called CatWordy was launched in the App Store and Google Play. Our small but mighty team consisted of my husband as an app engineer and product visionary, me as the Product Manager, and our two babies (one of them in my belly at that time). During our immigration to Bulgaria, we found ourselves with very little motivation to learn the local language. However, we believe that no task is unpleasant if you do it your way. Our way was to create an app for learning foreign words - CatWordy.
Product Idea
The idea was to have a single place for all new words in all the languages you learn: to collect, train, and remember them. It seemed that all existing products didn’t solve this not-so-unique problem in the way we like to see, at least for the Bulgarian language.
Popular apps on the market provide a predefined journey with very little commitment to teaching you a foreign language but to entertain you. But, as it turned out, there was a reason for that.
Product Discovery Toolkit
So, you're about to create your own product. I hope you've evaluated it from all perspectives and believe it's the best idea ever. Just kidding! Instead, focus on the idea you can execute and gain sufficient knowledge about your market and customers.
My essential Product Discovery Toolkit consists of:
- Competitor analysis
- Product strategy
- Market analysis
- Customer development (CustDev)
Let's explore these techniques together, using the CatWordy app as an example.
Competitors Analysis
I prefer to keep it simple yet profound. For me, it’s about analyzing other products, and gathering relevant data. I downloaded 20+ language-learning apps, used them, and systematized my insights. I’ll share some of them with you.
About Product Idea. Only a few apps addressed our key idea, and we were capable of surpassing them in terms of user interface and technical implementation.
About the Market. The Bulgarian language was not represented in many existing apps, probably because of the market size (Bulgarian is spoken by only around 10 million people across the globe).
About Educational Apps Metrics. The retention rate for educational apps is 1.76% on Day 30. This is why many apps don’t show the content, don’t provide the trial period and force customers to buy annual subscriptions. After purchase many apps engage customers with gamification, networking, push-notifications and streaks. It determined our roadmap for the next releases.
On this step our confidence level was high, and we proceeded with the initial idea.
Product Strategy
Simply put, Product Strategy answers the questions of what you deliver and for whom. For a comprehensive understanding, I recommend reading the chapter about Product Strategy in the book Inspired.
The key idea is to come up with the smallest deliverable product that makes your target customers successful. Focusing on a single, small market at a time helps you launch your product as soon as possible.
Based on the Competitors Analysis our initial Product Strategy for CatWordy was to deliver an app for learning Bulgarian words first.
Market Analysis
The idea is to check if the market exists and is large enough. This is why you start
with the Total Available Market and you go down to your product strategy. What we've learned at this stage is that despite the market's size, our share is very distant from it.
According to the public data on the global online language learning market size and its estimation for the next 5 years, I found that the language learning app sector is valued at $8.21 billion in 2021 (or $5.7 billion with 30% of excluded store commissions).
The second step is to define the Segmented Addressable Market. Keeping in mind our Product Strategy to focus on the Bulgarian market, In 2023 the non-national population in Bulgaria (who may be interested in learning the local language) was estimated at 83k people. Considering the median annual price $55 from my Competitors Analysis, the SAM could be estimated as $4.5 million annually.
The potential revenue which our company could achieve (Share of Market) I estimated based on conversion rate assumption (2%), our go-to-market price and landed at $17k. Well, our initial product strategy certainly wasn't going to make us billionaires and required adjustments for the next releases.
CustDev
Interviews with potential customers provide a lot of insights. The best guide I know is in the book The moms test. We interviewed people who had 365+ days in Duolingo, learned English for work, and learned German and Bulgarian for life. Very soon we realized that even our initial product idea didn’t have the product/market fit.
What we learned is that customers expect high-quality entertaining content and a ready-to-go learning journey. The popular apps they use don’t actually help them master the language, but they feel productive and have fun achieving daily goals. The majority of customers are less concerned with memorizing words from books or speech, finding it overwhelming. They prefer translating words as needed or grasping the context overall.
This is just an example of how CustDev interviews can provide insights and bring you closer to your customers.
Instead of a Conclusion
If we hadn't analyzed the market, products, and customers, we could have spent months polishing the app only to discover after release that the idea lacked product/market fit. Instead, we launched the first release within just two months, working on it in our free time (Have I mentioned my husband has a full-time job?) By following the “Deliver - Learn - Improve” approach and having Product Discovery Toolkit in hand, we iteratively adjusted our strategy to meet market expectations. Several next versions of CatWordy better matched our customers' needs, and we expanded our language support to include 10 languages. It’s pretty common that after the initial excitement, dissatisfaction can come, and the development process will slow down. Our priorities and focus also have changed. Despite this, our passion remains strong, and we continue to monitor the market, explore and evaluate new ideas for our next releases.
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