Minimum Viable Product
By the time you come to make your minimum viable product, you will have realised that you are embarking on a journey as an entrepreneur within a start-up. Your product or service aims to converge on something you like to do/are good at with something your customers are interested in. The trouble is, you don’t really know what your customers want and you don’t really know who your customers are. Undeterred, you hope to use your minimum viable product to get the show on the road and start to figure out what is going to work. This involves a process known as validated learning which you can achieve through the build-measure-learn feedback loop.
The Need to Experiment
It’s time to apply a scientific approach to your enterprise. Begin with a clear hypothesis about what you think will happen and then test it. This means you should test your strategies (which are usually guided by your vision) to see if your efforts are producing tangible results in line with your predictions. In other words, have you correctly identified your customer and is your product valued by your customer? You should tease out all the assumptions from your plan and figure out ways to test them. This is the goal of every start-up; the ability to test assumptions systematically in a quick manner without losing sight of the overall vision.
Begin by creating a product. You will learn more and faster using this product, particularly when compared with only asking prospective customers. This is because your product enables you to interact with real customers and learn all about their needs. It produces real data about customer demand and reveals their surprising behaviours. People often don’t do what they say they will and you cannot take for granted what other people tell you. You are responsible for testing your own critical assumptions.
These early iterations of your product are known as a Minimum Viable Product. They help you kickstart the process of learning as quickly as possible and provide the fastest way to get through the build-measure-learn feedback loop. The aim is to get learning as soon as possible and test the fundamental business hypothesis; a minimum viable product does not make the perfect product and it will lack many features that will later prove essential.
The minimum viable product is the key to getting your business successfully running with the minimum amount of effort. Be warned, the minimum viable product is not necessarily the smallest product imaginable.
How Not to Experiment
The worst thing you can do is build a complete product and launch it in its entirety under the premiss of watching your customers reaction. This is because it leads to high levels of waste. What if you build something no one wants? You’ve clearly wasted your time. Every additional feature you add that is not required is also a form of waste. If you launch many features at the same time, how do you know which features your customers find valuable?
Building the complete product prior to launch takes time. It serves to delay your launch and means you are not learning about your customer right from the start. This is time wasted! Therefore, any additional work beyond what is required to start learning is a form of waste.
Meeting Early Adopters Expectations
In any business, you will first encounter early adoptors of your product. These are the first people you will sell your product to. Early adopters will accept 80% of a solution and use their imagination to fill in the rest. They want to be the first to use your product, will more easily forgive mistakes and are more willing to give feedback. Any additional features created beyond what early adopters demand is therefore a form of wasted resources and time.
Working with early adopters, you can iterate your minimum viable product into a widely marketable product. When you finally come to launch to the whole market, you will already have an established customer base, you will have solved real-world problems related to the business and you have the specifications for what needs to be built to further improve the product. This is all possible by engaging the few early adopters.
A final word on early adopters. If they refuse to use your product again, you know something is seriously wrong with your product and/or strategy. If this happens, you know it is time to gather some qualitative feedback from them to understand what is pushing them away.
What About Quality?
Traditional thinking leans towards the delivery of high-quality products which the customer perceives as valuable. This is a fantastic approach if we know what the customer finds valuable. The truth is that in a start-up, we have no idea what the customer wants, nor who the customer is. In this scenario it is therefore impossible to know what quality is.
When creating our minimum viable product, we must bear this in mind. If a product is seen as low quality, this is a learning point and can help direct our product towards something our customer cares about. Remember, your customer is only concerned about whether the product serves their needs (i.e. provides them value).
If the early adopters cannot figure out how to use your minimum viable product, then you might need to spend more time creating a superior design. Thus, high quality minimum viable products are possible, but only if it leads to learning.
The golden rule about quality is that the minimum viable product should be used to put assumptions to the test. If the customer reacts in the way we expect, our assumptions are correct. If not, you need to change your hypothesis and test again. Any features, processes or efforts that do not contribute to your learning must be removed as they are a form of waste.
Fears and Concerns: A Reason to Delay?
Many individuals often fear going public with their product too early. These fears are both real and imagined. They include concerns about:
Competitors Stealing Your Idea
The trouble is hardly anyone will take notice of your business in the first place! If they do notice your product and can out execute your start-up, then the start-up was never going to succeed in the long run.
Damaging the Brand
This is simple. If you are worried, launch the minimum viable product under a different brand name!
Patents
These usually begin when a product is released. Thus, if the product is central to your business, early release can reduce your patent protected time. There is simply no way around this.
Rejection
Often entrepreneurs fear their product will be rejected by a false negative and so launch fully formed products. It is much better to learn your product is going to fail before you have invested all that time.
Remember; the purpose of the minimum viable product is to provide a full dose of reality. It is normal to fail, and this will save you time in the long run. No matter what happens, when your minimum viable product fails, persevere through iteration and flexibility. If you discover an element of your strategy is flawed, then you may need to consider pivoting. Prepare to fail!
What Success Looks Like
Start-ups have small numbers of customers and very little exposure. You can use this to your advantage and experiment to find the perfect set up. If you can execute the build-measure-learn cycle faster than anyone else, then you will not have a problem with any of your competitors. The only way to win is to learn faster. Only once you have been able to solve your customers problem (not delivering a feature) will you have truly achieved success.
Types of Minimum Viable Product
As discussed before, the aim of your minimum viable product is to test your essential business hypothesis. To this end, they do not need to be complete products, nor do they even need to be a product. There is no perfect solution; it all depends upon your needs. Most entrepreneurs will overestimate how many features are required. The best rule to go by is to keep it simple. You could create one minimum viable product that tests most assumptions at one time, or you can create multiple minimum viable products that test one assumption at a time. Here are some examples:
Smoke Tests
These as simply adverts. Create a video highlighting how your product works and link it to a beta waiting list.
Give individuals or companies the opportunity to pre-order a product that has yet to be built. See how many people sign up and thus see if there is demand.This only measures whether customers are interested in trying a product.
Concierge MVP
This is a labour-intensive method where you use personal interaction with your customers to understand what makes a workable product. You give them the best possible experience that aligns with your vision.
Essentially provide a high end and personalised service to a few customers. Measure what your customers did and take your time to understand what your customer values. You might not even be building your product at this time!
As you start to understand what your customer values and the processes you need to deliver this value, you can start to build the product around this concierge delivery and automate your service in order to save time. This allows more customers to be served simultaneously and leads to growth of the business. Thus, at the point of use you have created a product that is working.
The Magic Curtain
You can create a high-tech product with no real backend. That is to say, rather than using a computer process, you have people behind the curtain manually performing the job.
This means you can find what your customers really value before trying to build the actual product.
Early Prototypes
Create an early prototype, complete with problems and missing features.
References
- The Lean Startup; Eric Ries
- The $100 Startup; Chris Guillebeau