Start. Grow. Exit

The Minimum Viable Product

key-2114046_1280For startups it’s essential to do whatever is required to get to product/market fit, including re-designing your product or moving into a different market if necessary. Only after you know that you found a set of customers who react positively to your product can you take your startup to the growth stage. Don’t burn your money on a product no one will want to use. You have to maximize your learning for your money spent.

The Minimum Viable Product (MVP) is a product with just enough features to gather validated learning about the product/market fit. The basic idea is that gathering insights from an MVP is much less expensive than developing a product with more features and then testing it on the market. If you haven’t reached product/market fit yet, it is crucial you to keep your cash burn rate low and focus all resources on proving that people want what you’re planning to build. A MVP is the minimum you could create to find out that. This means that you are still thinking about all the elements your product could have, but you only build the things that are essential to find out that people want your product. This does NOT mean that you should build a bad product, because of course with a bad product you will get bad feedback.

Do not forget that a MVP must not necessarily mean you have to start coding a lot. For example, with Dropbox a video that explained what Dropbox does and why people should buy it worked very well in the early phase. Or you set up just a landing page to validate your value proposition, product fit, sales argumentation and even your pricing. Or, instead of providing a product, you start with a manual service. Or you launch a crowdfunding campaign on platforms such as Kickstarter or Indiegogo. Not only will you validate the product if customers want to buy it, but you will also raise money. As you can see there, are many different ways to build a MVP. You have to be smart about the right approach for your idea.

Having said that, I have to admit that it is sometimes very hard to decide which things are essential in order to find out that people want your product, especially if you don’t have any customers for your product yet. The only thing that helps here is to experiment for a pre-defined time period – e.g. 12 months – and try to learn from that. If, within that time period, you could not progress, maybe it’s time to let it go. As always in startup life, you also need a certain percentage of luck to have the right idea at the right time and find the early adopters that you need to be successful.

I strongly advise you don’t bring in marketing or sales employees to try to solve the problem of not having enough customers interested in your product. They will only add to your cash burn rate and probably won’t improve the product/market fit.

Final comment: the whole concept of MVPs doesn’t only apply to the initial phase of your startup. In my eyes it’s a methodology applicable to running your startup. For every new major feature it’s a good idea to think about starting with a MVP instead of a full-blown implementation. The nice thing is that later on when you have loyal customers it’s much easier to get feedback and input from them on how to improve the product further.

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