If you aren’t embarrassed by your first product, you’ve launched it too late.
I was an accidental entrepreneur, unexpectedly managing to grow a business for over 20 years from the kitchen table. When I took up writing and started interviewing other entrepreneurs for my books, I found that meant I had a lot of knowledge but not always the right tags to put on what I had been doing. I discovered what white labeling, drop shipping, and MVPs meant, for example, many years after I had been doing them instinctively.
However, when someone asked me the other day which “bit of their business” they should concentrate on, I was entirely comfortable with the phrasing. But I still wasn’t sure where to start with an answer. There are just so many strings to this.
On the one hand, it would depend on what they wanted out of life and their personal goals. But from a business point of view, it always comes down to concentrating on what the customer wants the most that you can supply with ease and maximum profit — in other words, developing your MVP. And this process is full of mistruths.
Let’s debunk a few.
Myth one — Only Highly Skilled Tech People Use MVPs
Determining what your customer wants comes from various forms of research, and one well-known approach is the MVP. When I mentioned this to the person wondering what business line to go or, the response was, “But I am not a tech person”.
That is one of the myths. MVPs are not restricted to tech founders; the principle behind them is sound for any business.
Let me give you the story of an MVP development in action. Once upon a time (like all good stories), there was a guy called Nick who wanted to buy a specific pair of shoes in a particular size. He drew a blank at his local shoe shop and started wondering if other people wanted the same ones, and perhaps he could buy them and then sell them on the net.
At next to no cost, he built the most basic website, spoke to a shoe store, and used some of their photographs for his online one. When he had an order, he bought in and shipped out. Virtually zero investment, and in return, he learned that there was a market for shoes online and which ones appealed the most — instant market knowledge and research. Further down the line, Amazon acquired the company for 1.2 billion, albeit long after Nick had left. Nick’s surname was Swinmurn, and the company was Zappos.
Myth Two — The Origins
Swinmurn’s shoe shopping expedition was back in 1999, nearly ten years before Eric Reis published the Lean Start-Up. It is another common myth to believe that Reis coined the term MVP.
However, what Reis did was bring it to people’s attention. Frank Robinson, CEO of SyncDev Inc., originally coined the term in 2001, and it was then adopted by author Steve Blank. Blank set out a customer development method for small companies that they could use without the huge finances at their disposal that the giants have.
Myth Three — What An MVP Is
I have heard MVPs described as a launch strategy, but that fails to explain what it is. Also, it gives the impression that it is to test at the startup stage, which is not exclusively true. It can be used continually to test products. Remember Nick? It is a tester of your idea with a minimal investment. It should reveal if there is market demand and explore exactly what the demand is for (which shoes!) and if your method of selling will work.
With traditional market research, you ask customers questions that produce varying degrees of honesty and self-awareness. With MVPs, you learn by watching customers in action; will they buy; what do they buy? The data is both more accurate and more specific.
Steve Jobs is quoted as saying, “You’ve got to start with the customer experience and work back to the technology.”
Apple used it for iPhone, using the most core model to see if the heart of the thing functioned, i.e., could people manage without a keyboard and would mobile phones fully function on the internet. There was no point in building apps and fancy extras till those two core principles had been established. The core production gets validated first.
Not only can you test the idea for a product you have cheaply, but you do it fast, which means you learn what will and won’t work fast, and your product and or brand comes to life quickly. The product has to have enough value and work well enough to appeal to the customer; otherwise, it is a non-starter.
There are two other benefits. One, you will be making money while you learn. Not enough, probably. Our shoe salesman certainly lost initially, but you will be making some. As you progress, the losses can shrink because you know more about your customer’s needs.
Mailchimp managed to stay bootstrapped by offering a free version to customers of their new software and a fancies model on subscription. It will also stop you from spending a larger fortune on developing something which will never sell. The last benefit is that you are always building the foundation of your business, brand or product, getting your name out there.
Myth Four — The Guarantee of Success
One of the biggest causes of failure in new businesses is a lack of market demand. So, MVPs take away that risk. Don’t they? Like all methods, they are not fail-safe, only as good as the starting point, the operators, the ability to adapt, and the data actually being used.
The starting point is crucial. There is work to be done before the MVP stage, and racing in will risk wasting time and money. Before even thinking about an MVP, you need to have done the initial research, studied the competition, be clear on your core product or service and its hopefully unique differential, and have studied the competition. You have to have some validation that your idea is something the market might want. If you haven’t done any of these, you are not MVP-ready.
While the product can be basic, the marketing basic, the data collection has to be far from it. Many MVPs fail simply through bad data collection. The whole point of the process is to find out about your customers, your product, and your website — is it easy to use, and does it connect with your customers? Many entrepreneurs have admitted to me that in their excitement of launching, and their commitment to high tech, they forget the resonance with customers, which is crucial. They have even forgotten how important calls to action are and how easily they can be followed.
On the customer side, your data collection should be set up to reveal where your clients are, potential market segments, how the customers engage, expected percentages at each stage of the funnel, and the acquisition cost. All vital information that a startup couldn’t normally collect with accuracy.
Your product might suck. For an MVP to work, it needs to be basic, but that doesn’t mean that it doesn’t have to get customers excited or that you won’t need to wipe the floor with the competition. You must be open to the idea that the feedback may tell you to quit. But equally, it is a balance. Many fall into the perfectionism trap and keep developing it forever, reacting to every customer suggestion while seeking perfection. That defeats the point of the MVP.
A final common error is to not react to the data. All that lovely feedback and through ego and obstinacy, founders chose to ignore it. The reality is that within the MVP process, you must continually learn, develop, and adapt. And swallowing it bravely if it emerges that the only thing a customer would want is unviable financially.
Myth Five — Only the Best Method Will Do
Business methods have become big business. So, there are plenty around to propound ever more complex theories on how you should set up and run an MVP.
One of the things they will tell you is that you have to have a working prototype. When I set up a furniture manufacturing business, I didn’t have anyone to make the furniture leave alone the money to produce it. I did some exceptionally bad drawings, stuck them together in the tattiest of leaflets, and proceeded to send them to people. One or two designs had just about enough appeal to get ordered and, from there, launch a business.
Next time around, with a slightly better brochure, the pieces that had never sold were dropped — having never been made. A cost-free MVP, if you will. In due course, we did start making prototypes, but more to get beautiful photographs than to refine manufacturing. This basic method of testing, launching, and relying on customer feedback still had immense value, enough to launch a business.
Innocent Drinks took another approach. Still employed elsewhere, the founders were unsure if they had enough demand for their idea to fly. They made up a big batch of their drinks and sold them a small music festival. Beside them was a big sign asking, “Do you think we should give up our jobs to make these smoothies?” and two bins, one labeled yes, one labeled no. The yes bin filled up, and they gave up their jobs.
As always, with tech, we can do things better. We can mine more data and gain information faster. But we have also added layers to the marketing challenge with the web, necessitating more complex information collecting. What you put in doesn’t necessarily pay out.
Remember Reid Hoffman’s view: if you aren’t embarrassed by your first product, you have launched it too late.
Jan Cavelle is an entrepreneur and author of two books, Scale for Success and most recently Start for Success.