It's common for people who are starting their first business to spend too much time and money building the first version of their product. This leaves them with little room to change the product, which will inevitably happen once they get it into the hands of customers.
The first version of your product should be designed to test the value of your idea and to understand your users. Spend as little money and time on it as possible by building what is called a 'Minimum Viable Product'. This is the product to validate what the real product should be.
This resource is designed to help you to understand the importance of building a minimal viable product ('MVP') and how to make a start on developing yours.
Here's what people often do when starting a business for the first time:
They have a great idea. This idea is generally a solution to a problem in the form of a product or service.
They pay a lot of money to have the product built, or spend a lot of time building it. Usually, it's an overcomplicated product with too many features. When people don't understand the core value of their product, they add features that sound good to make up for it.
The product takes longer than expected to build and costs more than expected. When the company finally gets the product in the hand of users, they realise that x,y,z is fundamentally wrong. A complicated product becomes more complicated to change, especially if there is no good reason for it to exist - because it doesn't provide enough value to enough people.
It's hard to come back from a product that doesn't work when there has been a lot of time and money poured into it. If you invest a small amount of money and it doesn't work that's ok, as you still have resources to invest in the next thing. If you invest all your money and it doesn't work, it can be game over.
Do not let this be you.
Instead, let this be your story:
You experience or recognise a problem, which you think a large enough group of people are experiencing. You think that you could solve this problem and build a product that people will be prepared to pay for. You identify the core assumptions that will need to be true for your business to be viable, for example being able to acquire customers at a cost that is less than the cost of the product.
You complete a series of customer interviews with a range of people who you think are experiencing the problem. This gives you a better idea of what the problem really is, who would be most likely to pay for a solution, and what the core benefits need to be in the solution.
You use this information to decide how to design a product or service to test whether people will actually use and pay for your product. You work out the fastest and most cost-effective way to build this product and get it into the hands of your users. It might be a landing page, an excel spreadsheet, a video, a survey, a simple web app or a stall at your local markets.
You stick to your core features and budget. The people you validated your idea with are the ones who are the first to sign up and start testing your product.
You observe their behaviour to see whether they use the product as intended, or if there's something you've missed.
Maybe you're on the money, maybe you learn something that changes the product entirely, or maybe you realise that it's not as good of an idea as you thought and it's better spending your time on something else. At least you haven't spent months and months and your life savings getting to this point.
This is a much better story, and why you should start by building a low-cost product to test your assumptions.
Your minimum viable product should be a low cost, low effort, first version of your product, designed to test your idea. It won't be the end product that you have it mind. It will serve as a necessary vehicle for understanding what is valuable for your customers, and where to focus your resources.
But what about other startups, their products look really good?
Any product that you use or see is not likely to be the first version of the product unless you have signed up as an Alpha or Beta user. Successful products have been through countless changes to get to the point where they adopted by a wide audience.
Here's what some of the 'great products' that come to mind looked like in their infancy:
If you can get people to start using a very basic, crapy looking product is a sign that you're solving a real problem and you're probably onto a good thing.
The fundamental concepts of MVP development
- You should be optimising for building a product that is most valuable for your users.
- To do this you need to find out what your users value and why.
- Figuring out what is most valuable to users can be hard because people often can't articulate what it is that they want, and people's assumptions about this are often wrong. This is why building something simple that people can use and will pay for is useful for validating an idea.
- But, it takes a good understanding of the problem you're solving, the people with the problem, and the core benefits of a solution to be able to get to the point where you can build a decent MVP. This is where customer interviews are essential.
- Once you’ve validated there is a problem for a core group of people, by talking to them, the next step is to create something to test your assumptions with a greater degree of certainty. This is to get more valuable feedback on what it is that your customers actually value through behaviour based feedback. You do this by building your MVP.
- The outcomes you want from the MVP are:
- Validation of the things that need to be true for your business to work.
- To build a relationship with your early users so they can give you feedback on the product for the next stage of development.
Questions to ask yourself to find the starting place for building your MVP
Questions to answer:
- What is the core value of your product - what makes it valuable for your target customers?
- How can you demonstrate the value using as little time and resources as possible? (DO THE MINIMUM WORK NECESSARY)
- What are the necessary features that you need to demonstrate for your product to be useful for your users/customers?
- What are the things that you need to prove to be true, in order for this business to be viable?
- What do you need to measure to know if you are on the right track?
If you don't know the answers to these questions, you probably need to spend more time doing customer interviews before starting on your MVP.