Tag Archives: Minimum viable product

MVP Minimum Viable Product Fails For Two Reasons

mvp minimum viable productEveryone wants to start validating the idea for their startup by creating an MVP minimum viable product. However, very few people get it right because they overcomplicate the process of picking features that go into the MVP minimum viable product.  Here are two reasons MVPs fail:

  1. You haven’t figured out how to provide a simple value proposition that differentiates your product from your competition.
  2. You haven’t identified who the early adopter for the product is.

Let’s Start With The First Reason An MVP Minimum Viable Product Fails: Value Proposition

Before you build anything you have to know what is already out there, otherwise you’re not really innovating.  I make it a point to understand why people love and hate as many of my competitors as possible.  The reason you need to do this is because potential customers are going to ask you one very basic question: “How are you different from your competitor?”  If you aren’t prepared to provide a quick response then you’ll lose the sale. Keep in mind they aren’t asking how are you better than the competition, they are only asking you how you are different.

To be different you have to work backwards. I start by knowing all the features that my competitors offer that their customers just absolutely love i.e. they will never come and try my product out unless I offer these features. Even then I’d have to do a much better job offering them than my competitors. Before moving on to what my competitors customers hate about their product, I go interview people whom I think should be using my competitors product, but aren’t.

Why do I do this?  Plain and simple: zero switching cost.  I don’t bother wooing customers that are using my competitors product.  Instead, I go after the bucket of people that either don’t know about my competitor or don’t like them.

I fixate on the needs of those who aren’t using my competitors product.

This requires having conversations with people to understand what their needs are.  From these conversations patterns of problems that users experience will emerge, the solution to those patterns is where you can start to spot the features needed in your MVP.

For example, at my first startup, Mint.com, we knew that  a number of customers of people were quite happy using Quicken, and were even willing to pay for it.  They loved Quicken so much they didn’t mind all the hours of their lives it consumed syncing accounts, categorizing transactions, and providing them analysis on their investment portfolio.

We didn’t even bother attracting those Quicken lovers.  Instead, we looked at all the people who weren’t using Quicken.  The young 20 and 30 somethings who wanted to spend less time managing their finances.

We launched a whole year after our competitors at the time: Geezeo and Wesabe. Our key differentiator was that our MVP downloaded transactions automatically from your bank and credit card accounts, and automagically categorized them.  Was it perfect?  No.  Did everyone want to sign up even though it was a free service?  No.  But did people understand our value proposition through our MVP as compared to our competitors?  Yes.  Automation was the key differentiator for us.

The Second Reason An MVP Minimum Viable Product Fails: Casting A Wide Net For Early Adopters

In August 2010, I launched an alpha version of BizeeBee my second startup.  No one except my team and myself knows how much this product tanked.  Why did it tank?  Because we cast a freakin’ huge net!  We went after all small businesses that offer services.  We built a tool that no one wanted to use.

It was a valuable lesson, and we quickly corrected our mistake by doing just one thing differently figuring out who our early adopter was.  We went after a niche inside a niche market: small independent yoga studios who weren’t using our competition.  Between September and December of 2010 we built our real MVP, with our very targeted early adopters, and launched in December with paying customers.

Our value offering was simple and targeted. Small independent studios could stop losing money on expired memberships and know how much they were making with 3 basic features adding members, recording purchases, and taking attendance. BizeeBee would handle tracking the memberships automatically.  Starting to see a theme here?

There is more that goes into making a product mainstream.

What often happens is that people conflate success with an MVP.  With an MVP you should be testing adoption, engagement, and possibly monetization depending on your user base and growth goals.  Most products including the successful ones that have grown virally had their beginnings amongst a small subset of early adopters like Facebook appealing to college students, and Groupon solving a big problem of marketing for small businesses.

People forget this and think they need to design for the mainstream from the beginning, and that’s what ultimately obfuscates the initial value proposition and throttles even eager early adopters.

Want to learn how to build an MVP minimum viable product that succeeds?

Check out our upcoming Ship It Course here.

Think About Scale from the Start

If you are thinking about scaling a web application or service, congratulations, because you have users that liked you or were curious enough to sign up and stick around! You will of course be acquiring more users shortly.  While the trajectory of user growth is unknown, and depends a lot on your usage model (viral social network vs. word-of-mouth individual user service) there are a few things you need to address:

  1. Capacity – your site will need to handle more concurrent users, signing up users alone can generate a lot of load on the system, even before they get to using the product.
  2. Reliability – users will want to use the service on their own time.  The site needs to be up and running 24 hours with  limited maintenance windows.
  3. Scalability – if users can generate data on your site you will have more data you need to store/retrieve.

If you’re growing too fast a common way to solve #1 and #3 is to throw hardware at the problem.  A startup focuses on creating the MVP (minimum viable product), which means the prototype has just enough functionality to add a significant value to the lives of users that convinces them to sign up and use it for awhile.  Putting the product out there initially means you’re testing the product/market fit, and as a result you’re unsure of how many user will signup, and what their usage patterns will be .  Let’s say you are a cocky and a cheapskate, you know you’ll have users, but you don’t want to solve problems by buying hardware all the time.  If you’re cautious you will do the following:

  1. Start performance tuning and load testing even before releasing the product!
  2. Create a restricted alpha and beta, which allows you to control the growth rate.
  3. Measure the adoption rates and usage patterns for your alpha and beta users.
  4. Use the measured adoption rate to anticipate how many servers you can afford.
  5. Monitor spikes in adoption due to press releases or other news events. And be ready to re-route traffic (failover) in the event of a server failing.

These are the top 5 ways you can initial think about scaling your app without a whole lot of code re-writes.  But there will come a time in which you will need to redo a lot of the prototype’s code base.  We’ll save that for another post…

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