Launching a startup isn’t a fairytale! Unrealistic from-zero-to-hero movies and books have done more harm than good to the startup founders.
Okay, you’re a first time entrepreneur, you’re just getting started, congratulations, you’ve taken the first and most difficult step… getting started!
Now, I can almost read your mind… I can anticipate the mistake you’re most likely going to make or already making …
But wait, don’t feel bad. It’s okay, we all make this mistake, but I want to stop you before you continue…
I can tell you’re working on your BETA version of your product or service…
You want it to work perfectly before you get it to your customers.
Most likely you’re investing long nights and hundreds of hours of hard work to make this your perfect product.
Most likely coding, buying inventory, making a hefty investment of time, money and effort…
That’s your mistake!
“What? This guy is crazy!” Yep, I know you’re thinking that. It’s okay, you’ll love me after I save you tons of money and effort.
You should not be buying inventory, coding or creating your product. You shouldn’t be renting office space or buying furniture, NO!
“So what will I sell? I need something to sell!”
Exactly! That’s your mistake.
“No, Hector! I’m not gambling! Everyone needs this product. If I could get just 1% of the market, we will be very successful!”
Yes… you said it correctly… “IF” you get a part of the market.
A very common mistake we all make is creating the product BEFORE we find the customers and that’s gambling.
In fact, it’s EXTREMELY expensive to find the ideal customer for YOUR product.
Here’s the key difference:
You create YOUR version, then go out to the world and say, “I’m trying to sell this! I need to find the PERFECT customer for my product.”
The correct way to do this is creating a ‘demo’ product and then going out to the world and saying, “I’m trying to learn what YOU need and I’ll make it for you.”
See the difference?
One is gambling… you invest everything into your business and THEN you go out to sell.
The other one is investing… you invest very little, find the customer and then create the product for one or more clients you KNOW will buy your product.
What is a minimum viable products
I recently learned about these two startups, which both started as Minimum Viable Products. One, Crew, was recently valued at $30 million and is growing at 300% year-over-year. Three years ago, it was an email newsletter connected to a Google Doc.
A Minimum Viable Product (MVP) is a product that has the minimum set of features to prove the most essential hypothesis in your business.
If you’re starting with an idea and nothing built, your first goal is to prove that people want what you’re planning to build. A Minimum Viable Product would be what you could build at a minimum to prove that.
It sounds obvious. But the reality is many products are made that no one cares about. A product may have many great features but building features doesn’t help a product in search of a problem.
Building a Minimum Viable Product can save you time and money, but it’s not an excuse to build a bad product. Making a Minimum Viable Product means thinking about all the elements your product could have – each feature, each potential page – and only doing the things most essential to prove people want it.
Example: How Unsplash started as a $19 Tumblr theme without writing a line of code. And is now it’s one of the fastest growing photography websites.
Rather than spending months creating a website with profiles, logins, etc., we setup a Tumblr blog with a $19 theme and uploaded 10 hi-resolution photos to a public Dropbox folder. Within three hours, the first version of Unsplash was built.
The first version of Unsplash as a Tumblr theme:
Unsplash was submitted on Hacker News, an online community of designers, developers, and entrepreneurs we thought might like Unsplash.
Within a few hours of posting, over 20,000 photos were downloaded. Even though the first version of Unsplash was primitive and barely worked, it was enough to prove it solved a problem for many people.
Today, Unsplash gets over 7 million photo downloads a month. Interestingly, the basic look of the first version of Unsplash is still how Unsplash looks today. The simplicity of a Minimum Viable Product ended up being the thing that made Unsplash special.
Often you don’t even need to code or design anything to prove the product you want to make solves a problem.
Mark Randall, Chief Strategist, VP Creativity at Adobe said,
“Only write code when you can’t think of any other way to validate your hypothesis.”
At first, you may simply need to hop on the phone with a handful of potential customers or sketch out your idea for a website with pen and paper.
A Smoke Test is another tactic you could use to validate you’re solving a problem before you build.
An example of a Smoke Test is to create a one-page website that says what your product will do along with an email signup box. No actual product exists yet but the goal is to see if any potential customers signup for what you want to make before you spend time making it.
This is something social media company Buffer did when they first started. Buffer launched with this 2-page website.
The aim of this two-page MVP was to check whether people would even consider using the app”, said Joel Gascoigne, Buffer Founder and CEO.
Although this basic version of a product might seem leagues away from what you want your product to be, it’s an essential first step toward getting there.
Even many of today’s most popular products had to start somewhere.
Minimum viable products of popular products
eBay, today’s most popular online auction website was originally called AuctionWeb when it launched in 1995. Here’s the earliest screenshot available of eBay’s original homepage compared to their homepage in 2014.
Apple is one of the world’s most valuable brands in the world. When the company was founded in 1976, there was a lot of risk. Personal computers weren’t a thing yet so Apple had to keep things minimal.
The Apple 1 was the first computer released by Apple in 1976 and was just a circuit board. It didn’t have a keyboard, monitor, or case.
Kickstarter flipped the funding model for creative projects by allowing people to support and fund project creators from all over the world.
It seems like an obvious solution now but when Kickstarter founder, Perry Chen, first had the idea, it took 6 or 7 years to launch.
Although he wasn’t a designer, Perry sketched his initial vision for Kickstarter in 2006.
We see how successful products look today. Sometimes we forget it took years of evolution to get where they are.
The Minimum Viable Product approach doesn’t end after your first Minimum Viable Product is launched. It continues through the entire life of your product. Even when you have customers or you’re a well-established company, you still need to choose what to build first and what should wait.
Building a Minimum Viable Product isn’t the only approach to product development but it’s the one I adhere to almost always. Every time we’ve tried to build the perfect first version, the investment has rarely paid off. The idea either lost it’s magic, the product got complex, or it was delivered late. Worst of all, it never felt worth the extra time and money.
Even now, with a team of 15 designers and programmers and over $12 million in funding, we still start new projects as if we had no money or couldn’t code or design.
A Minimum Viable Product isn’t about making a bad first product. It’s about focusing on what’s most important and building that.
What is the purpose of building a minimum viable product.
Let’s start by looking at the Top 3 reasons startups fail?
- No market
- Run out of resources
And those three reasons account for easily 90% of the causes.
Now, what there is overcome by a great product? In fact, none.
- If the team disagrees with the direction the company is going or just can’t keep putting in the effort, they’re done, despite the product
- If there is no market for what you have in mind, or more likely, you can’t acquire and secure it, why on Earth would you build more than the minimally viable?
- Until you have a business model or funding, no amount of a great product will keep you from still burning cash and time.
Your job, as a founder, is actually to avoid 1, 2, and 3 until you crack the market and find a model or funding to keep going.
Most startups put too much time and effort in the product. Most founders are too fixated on the product they want or the affirmation they have that it’s right.
An as a result, most ventures experience teams that fall apart, discover they’re wrong, or run out of resources.
Build as little as possible that can on its own work and persist. Be viable.
Most founders don’t do this. Even if they think they do, most aren’t.
An MVP could be something like a newsletter. You convert people, it grows, and you can get a sponsor. In your space: MVP.
And an MVP such as that is truly an MVP. It proves you can convert, grow, and make money. It will in and of itself subsist and live on. And most importantly, it gives you an market to develop.
But most founders want to build their thing. Most want to prove they’re right by showing people want that thing.
That’s not a company. That’s lunacy.
Companies build what the market wants. They invest minimally in determining that and then they iterate.
Find a team committed to a mission and vision, do the marketing to determine what people really want and will pay for, build the least viable thing you can, and make money.