Pulling an idea off the ground might look like an easy play for first-time founders, yet a lot of them fail in their first few attempts.
We’ve heard it before.
According to CBinsights more than half of startups fail in their first four years. 42 percent of them do because of a lack of market need, 29 percent run out of cash and 14 percent ignored their customers.
Founders learn about this process gradually, and often the hard way. The counter-intuitive nature of startups makes it difficult for first-time founders to have the right guesses at first.
Eventually, it was clear to the startup community that this stage was a legitimate challenge that needed to be addressed. More attention and conversation were dedicated to this topic: How to help more startups effectively reach the market.
In fact, that is how some of the fundamental concepts in the startup world today, came to the surface. Lean Startup, Minimum Viable Product (MVP) or “pivoting” are all notions that emerged to make the process of starting a company less risky.
Although they are simplified models, many founders still seem to struggle to fully grasp their complexity, let alone the intricacies of implementing them.
The MVP is one one the most important and decisive stages in the product lifecycle. It helps your product enter the market smoothly hopefully without too many (bad) surprises, and above all, without spending every penny of your savings.
What is an MVP?
- “An MVP is a concise summary of the smallest possible group of features that will work as a stand-alone product while still solving at least the “core” problem and demonstrating the product’s value.” –Steve Blank
In other words, an MVP is a minimalist, well-functioning version of your product that solves an accurate need in the market. It should give your early adopters a quick glimpse of the experience your final product offers. And additionally, you should be able to test it, measure it, and iterate on it, without spending a fortune.
On the right is an illustration by the Spotify product development team that depicts the right way of building your MVP. (not sure if this is necessary)
Think MVP at the first — minuscule — concept stage.
We can start talking about an MVP at the conceptualization stage. The mockup you pitch to your team to get their first impressions is considered a low fidelity MVP. It’s the very early version of your MVP, and it could be as simple as hand-drawn sketches, or surveys.
However, it should help you get a better idea of your users’ persona, needs, and preferences. A low fidelity MVP helps you find out whether people share your vision of the customer need/ problem.
The latest version of your MVP is the high fidelity MVP. This, on the other hand, is much further along; it’s running and it should specifically convey your current value proposition. The high fidelity MVP consists strictly of the features that are linked to your core hypothesis. Anything that doesn’t help you assess your main assumptions could be added in a later stage.
How can the process of MVP help my new startup?
So by now, you’re probably still asking yourself “how would this MVP help me succeed”. Well the initial purpose of the MVP is to get you the maximum insights from the market, with the minimum resources.
But truth to be told, your MVP will unintentionally come with a lot more benefits than you first counted. Allow me to walk you now through a few perks of having an MVP that you probably haven’t thought of before:
Knowing your users better. Oh, yeah — that…
One of the core principles of the startup business model is the user centered lens. If you don’t give most of your attention to your user, you will most probably fail. It is advised that your product development should go hand in hand with customer development. Know your audience as you know your product; it’s equally crucial.
“The Customer Development model is not a replacement for the Product Development model, but a companion.” – Steve Blank
An MVP is made for this exact purpose. When testing your product, you’ll be able to know what your product is missing, but also what your users prefer.
The data you’ll collect would help you figure out whether your product aligns well with the market demand and customers’ needs, before it’s too late. MVPs generate helpful user feedback.
The data will help you validate your core value proposition, adjust your revenue model, or segment your audience. All of which is crucial before you invest all of your resources in your product.
Focusing on your core hypothesis.
The lean startup methodology has established that products are initially, before even being an MVP, a bunch of untested hypotheses yet to be confirmed by the market. Those are assumptions about the need your product fulfills, and how it does it.
As a founder, you probably have a long list of ideas and theories on what/how you want your product to be. However, once you reach the MVP stage, you’re bound to narrow your focus to one or few core hypothesis; and those are the very few guesses that you are ready to bet on for the rest of the journey.
Can anyone help me?
CountUp.io is a startup that was part of our first batch here at Hidden Founders. Nodar, the founder, spotted a gap between startup founders and accounting specialists, and decided to build a connecting platform to link the two.
We helped Nodar build and launch his high fidelity MVP in order to get validation in the market. CountUp’s business idea was based on two main assumptions:
- H1: Startups want/need to connects with vetted accountant
- H2: An online platform is the optimal solution to the problem
In order to build the optimal MVP, we decided to reduce the platform to two basic elements: the matching system and an instant messaging feature. Those were the only element we needed for the Countup to be operational and to test the two hypothesis.
We only needed the minimum elements that would make the transaction possible between our users. We didn’t include video messaging, or an automated paying system although they would have been useful to the platform. They were simply not part of our hypothesis scope.
Saving money and time.
M is for minimum technology, spending, time but also for minimum risk. An MVP prevents you from sinking before you even jump in the water. It prevents you from rough crushing. The fewer features your MVP has, the less money you spend and the less time you consume.
Those are very important resources that you want to manage wisely. The time you spend on extra features holds back your official launch date, and distracts you from the important parts of your product.
It’s no secret that spending too much money in the early stages of a startup does nothing but lower your odds of getting it off the ground. So make sure to lower your financial investment and focus on validating the product before diving in.
Avoiding the fallacy of the perfect business plan.
A prominent reason for founders’ failures is their desire to apply what they were taught in college about business, to their startup ideas. They are usually confident about a fixed business plan, and can’t wait to execute it.
However, Business plans rarely survive first contact with customers. Rather than engaging in months of planning and research, founders have accepted that all they have on day one is a series of untested hypotheses.
There’s no actual book that will take you step by step through building your MVP, because It’s usually very specific to the nature of your product. A feature that is unnecessary in one MVP could be extremely crucial in another.
Therefore, you’ll never have a clear chart of “include/not include” elements. You’ll have to figure that out on your own. You can start doing that by organizing your features in two categories: must have/ nice to have.
At Hidden Founders, and through our experience building MVPs, we’ve come to believe this exercise to be essential when building your MVP.
Avoiding the “we need this feature too” trap.
Most founders understand and acknowledge the importance of the “core features only” rule in the MVP building process. Yet, they still end up overbuilding their MVPs. The truth is, the features selection process is often very tricky.
When working with CountUp, we came across the same issue. After including the matching system and the chat, we realized that conflict management was becoming a legit need in the platform.
The two parties involved in the transaction were very prone to finding themselves in conflictual situations. And as a third and linking part, CountUp was responsible for resolving any disagreement between the users.
We decided to include a conflict management system.
We decided to include a conflict management system. However, instead of automating the process, we judged that the problems could be handled manually. By adding just a “signal a problem” button, the users can fill a complaint or signal a problem via email, or phone call and Nodar would take those and handle them personally.
This saved Nodar a lot of time and money that would have been wasted developing an automated complaint management system.
Automation is only used for big data loads, and the number of complaints received at that stage by CountUp was totally manageable manually.
This is called a Concierge MVP, it’s basically an MVP that “feels” like the real product to the user, yet a lot of its back the office functions are done manually. So be ready to handle edge cases manually, or off line whenever is possible.
Too attached to our product, are we?
A common trap that first time founders fall into is getting too attached to their product. It’s completely understandable that it’s their little baby and they want it to charm everyone around. Yet, embellishing your product is often the worst thing you can do to it.
Be fast and build something people want, that’s all you need at the early stage. You want to prove that your product fixes a real problem, and you want to launch quickly. Anything that doesn’t help you get closer to these two objectives can often be dropped.
So if you want to be sure you’re doing it right, you’d better get started on building your Minimum Viable Product, keeping in mind that all the cool features can be added in the future.
Jeremy Webb Blog | Startup Grind https://www.startupgrind.com/blog/heres-how-an-mvp-helps-bootstrapping-founders-reach-their-market-1/