So, you’ve sketched your brilliant idea onto a Lean Canvas per my last blog post. Now you ask…what’s next? Assuming that you have a compelling business case on your canvas, then it’s time to get to work.
Build something that can be tested and that people want to buy!
Whether you have a physical product or a software concept, build something that you can test with actual customers (no, your parents and friends don’t count). The fundamental activity of a startup is to turn your idea into a product, then measure how customers respond to it, and then decide based on that feedback whether to continue. This is called your “go/no go” decision.
Unfortunately, for many early stage entrepreneurs the question -- to build or NOT to build? -- is not asked enough. The “no go’’ decision is often skipped over. Instead the "if we build it, they will come" mentality is the mantra.
However, that rarely produces more than the proverbial field of dreams. As a result, many products (and their related startup companies) have little to no appeal to the customer, which can ultimately mean failure of the startup.
One of the best ways to combat this problem is with the Minimum Viable Product, or MVP for short. Eric Ries of the Lean Startup movement popularized this term for technology startups in 2009. Eric does a great job of setting the stage for lean thinking and the use of the MVP:
“Too many startups begin with an idea for a product that they think people want. They then spend months, sometimes years, perfecting that product without ever showing the product, even in a very rudimentary form, to the prospective customer. When they fail to reach broad uptake from customers, it is often because they never spoke to prospective customers and determined whether or not the product was interesting. When customers ultimately communicate, through their indifference, that they don't care about the idea, the startup fails.”
What is a MVP?
There are lots of folks that have taken Eric Ries' work to the next level. Once again, I’ll point you to the founder of Spark59 and the author of Running Lean, Ash Maurya, and his perspective on the MVP. Ash describes the MVP as follows in his blog “Practice Trumps Theory”:
“A Minimum Viable Product is the smallest thing you can build that delivers customer value (and as a bonus captures some of that value back).”
How Does the MVP Work?
MVPs work best when they adhere to the principles of “Build – Measure – Learn.”
First, build something really basic. And I mean basic. Think of the most stripped down version of your idea that still gets across the concept.
Remember: the Palm Pilot started out as a block of wood. DropBox started as a simple 3-minute video describing how the service should work to an audience of tech early adopters.
See if someone, anyone will buy it (again, not someone you know preferably). If you can get someone to give you cold hard cash for your idea in its most basic form, then go to the next step. If not, go back to the drawing board.
There are lots of ways to test your idea these days. Crowdfunding is probably the best testing platform available today. Indiegogo and Kickstarter are the most famous but there are more options cropping up every day. It’s not rocket science to set up a campaign that describes your idea (product/service) and allows people to sign up for the future version, although it does require a lot of marketing to have a successful campaign. You can get that cold hard cash I talked about earlier before you ever put your idea into production. What a way to validate an idea!
ToastyTote, a SparkLabKC 2014 company, raised more than $15,000 and gained 177 backers on Kickstarter as a way to validate their ultimate sports blanket before they went into production.
Don’t have a fully formed idea yet or need to test aspects of it? Try using an online focus group through services like PickFu. At $20 per test, you can get feedback from 50 potential customers about what they like and don’t like. It’s not the same as getting someone to pay for your product, but it is unbiased feedback, which is priceless.
Creelio, another SparkLabKC 2014 company, used Pickfu to validate their storytelling concept and how well their tagline communicated it. In just a few hours, Creelio had all the data they needed to nail down their MVP concept and move forward.
Listen to the customer feedback -- the good, the bad and the ugly. Don’t be tempted to only hear what you want to hear and discount the customer’s opinion. True, the customer doesn’t always know what they want, but they always know what they don’t want.
Finally, start the process over again. Improve your MVP a little (but really just a little) and test it again. If you still attract buyers for your product/service, then you have something that can become the core of a startup company.
The Build-Measure-Learn process is a feedback loop. The best startups continually cycle through this process as they grow their company and advance their products.
Finally, remember: There is no business without revenue.
In the startup ecosystem, we often forget that the purpose of a startup is to build something of value that solves a problem, and that someone will pay for. If you are considering applying for SparkLabKC’s 2015 accelerator class, we look forward to seeing your MVP, the results from your product tests, and what you have learned along the way. Of course, if your company already has revenue, we love that. If not, please be ready to show us the feedback from potential customers and how that is driving your business model.
Our application for the Class of 2015 will be available on October 15th and is due by midnight December 1st!