One of the pitfalls fledgling entrepreneurs can fall into is getting stuck in the costly product development process. Lot’s of time and money gets invested into a business before customer feedback gets involved. When customer feedback eventually does get involved it can derail a lot of the work that has been put in.
Creating early prototypes for the purpose of gathering feedback is a good way to avoid this issue.
In this process, we are going to build a very specific type of prototype called a ‘minimum viable product’ (MVP).
This concept was popularised in a book by Eric Ries called ‘The Lean Startup’. He defines an MVP like this:
“The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
Let’s unpack what that means a bit further before continuing.
Product Viability – What is meant by viability?
Your interpretation of viability is key here.
- Is the product viable if it works how you intended it to?
- Is the product viable if it includes all the features you want?
- Is the product viable if it is high quality?
None of these questions directly pin down what a viable product looks like because viability is a slightly different question.
It’s about whether your product is succeeding to fulfil a need in the market. The features you want to include may or may not help to fulfil this criteria. This is what we are trying to uncover here – to learn and test whether the features you’ve identified as important are actually important to the customer.
The quality of the features may help but something of low quality may still work if it is fulfilling a need the market is lacking.
Identifying which features are required and which are surplus to requirements is where the ‘minimal’ aspect comes in.
Now, you might be thinking, what’s the good of a minimum viable product? It won’t have all the great stuff that is important to my idea. I’ll just make a fool of myself trying to sell a substandard product without all the great branding, bells and whistles and extra features I’m planning on building at my company.
Let me tell you perhaps the greatest lesson I’ve learned in growing a new business. There is an old saying:
“You have only one chance to make a first impression”
It sounds great but this kind of thinking can stifle your developing business idea.
Getting real customers to engage with your ideas through a tangible product (even if basic!) will give you critical information that is far better than just researching your market through generic questionnaires and competitor research.
It helps you learn, fast.
What is an MVP? What should my MVP look like?
Keeping your MVP simple is essential. It should be as low cost, and low commitment as possible whilst still remaining viable.
The MVP probably won’t be what you end up selling when you’re running your business – it is a tool to let you learn quickly and find out more about what your market wants – the features that your MVP needs to have in order to succeed.
If you plan to sell t-shirts, your MVP might be buying a couple of low quality t-shirts featuring your designs and trying to sell them. Selling them by whatever means necessary – eBay, selling on the street (you’ll need a permit), selling at an event, etc.
You’re trying to prove there is a demand for your unique design, anything else is surplus to requirements. A higher quality t-shirt material might help in the final product but right now it just wastes time and money. Skip anything that gets in the way of learning and ultimately proving your product or service is viable.
If you can prove that your designs can sell some of your t-shirts, that’s demonstrated there is a market for what you’re doing. And, most importantly, you’ll get experience of selling to customers. But however you sell your t-shirts it’s important that you learn from this experience. If you engage with customers directly as part of the selling, take the time to go back and find out exactly what they thought of your offering. If you’re selling online you may be more interested in looking at how much a sale actually cost you, in terms of time, money and red tape.
A minimum viable product doesn’t have to be a product
That’s a confusing title, what on earth am I talking about here?
Well, remember we are trying to maximise validated learning in the easiest possible way. That might mean all you need to do is create a video showcasing the idea of your product before you even build a full prototype! If that helps you get useful feedback then it’s worth it.
Here are some other ideas:
- Pay someone to create a 3D render of your idea to showcase in images or videos.
- 3D print a simpler version of your product in cheaper materials
- Create a video presentation
- Get some of your service working but the rest is done manually by people (even if an app might take over the function later on when proven)
- Showcase the materials you want to use even if they have not been turned into the final product yet (if materials are a key part of your USP)
- Create a UI prototype of an app with stitched together images rather than fully coded. It’s not ‘usable’ but shows how it can be used.
The method you choose needs to showcase your USP clearly to the view so that they can give valid feedback.
It’s actually really useful to have some of these digital methods like a video showcase since you can get this out to more people through facebook groups, email surveys, forums etc.
How do I use my MVP to learn and improve?
I’m going to split the MVP approach into two categories – plan it, and build it.
Plan it (theoretical MVP):
- Choose the features that best meet these criteria.
- Work out the simplest way you can build these features in order to test them quickly
In the previous article we looked at identifying your unique selling points. This should have helped you prioritise your initial feature list. Make sure you reference this when planning your prototypes.
Build it (practical MVP):
- Build the MVP – pay close attention to what you have identified as the minimum. Avoid the temptation to stray from this path.
- Monitor how the MVP works. Make sure you have methods for encouraging and recording feedback when you expose it to customers.
- Learn from your customers. If customers hate it, why? If they like bits of it, why? Keep in very close contact with your customers at this stage to get as much feedback as possible.
- Adapt your product armed with this new information. Develop the features your customers want, and change or remove the ones they disliked.
- Repeat the process. Keep up the cycle of building, monitoring and learning to hone your product into something the market really needs and nothing more.
Launching a minimum viable product, warts and all, may not be to everyone’s taste. But the lessons you can learn from thinking about MVPs and the features that your products or services could have are applicable to all businesses.
It’s also critical at this point that you also put your business model to the test. The pricing strategies you intend to use need interrogating too. When you ask for feedback you need to find out if they would be willing to buy the product your offering at the price you are considering.
They might love your product but if the price isn’t right, that might need adapting too! This is important feedback for honing in on the right pricing strategy for your business idea.
Is your product viable? Interpreting feedback and adapting your approach
What you’ll probably learn from this exercise is that some of the things you are really enthusiastic about and feel are absolute necessities for your product are in fact not something that real customers even consider.
What’s important to take away from this exercise is not just the customers’ responses themselves, but the importance of talking to people about your product or service and getting honest, pointed feedback.
Sometimes, neither your ideas nor the customers’ quite hit the spot. Despite the customer “always being right”, customers often don’t know exactly what they really need. Testing out a mixture of features from these two sources and seeing how customers respond to these ideas is the next step – whether by returning to more customer research, or waiting until you actually launch your business to get the most valid form of feedback – sales.
Remember, developing many extra features because you are worried your product is not good enough will likely only generate more costs. If your core MVP did not receive good feedback then no amount of bells and whistles will fix this.
Be honest with yourself and go back to the drawing board if you need to, it will save you money in the long run!
Should you launch your business with a minimum viable product?
In the end, this is a question only you can answer. Depending on the type of business, it may be possible to launch with the MVP we have been discussing. Software businesses often start this way, dipping their toe in the water to see what works and what customers really engage with. It’s a low cost way to start up, and if you can prove there is a market for your idea then it can be easier to get funding.
The whole concept of this process is that you are trying to find a viable product in the most minimal way possible. If it is indeed viable then it is very likely that you can launch a business with this highly stripped down product or service.
Just make sure it is actually viable! Complete the process of gathering feedback and making changes diligently and honestly.
The viability should be established by the early exposure to customers and your market. So, in theory, it will be a much safer way to launch a business than just relying on indirect market research on it’s own.
If you’re the kind of business that can embrace lots of change and experimentation, then continuing to work with MVPs for all of your new products and services can be very rewarding, and stop you chasing after fruitless or costly ideas.
You’ll find the concept of an MVP isn’t something you ditch after launch – it’s a continuous process essential for growing your business too.
Next week we’re going to get stuck into how you’ll go about marketing and selling your product. It’s here that you’ll start to work out what a realistic sales volume will look like. This is a critical aspect of working out if your business model is workable.