Got startup meetup 23 jul2015

Got Startup Meetup July 23, 2015

How to Create and Deploy an Effective

Minimum Viable Product (MVP)

Minimum Viable Product (MVP)� In product development, a minimum viable product (MVP) is

the product with the highest return on investment versus risk

� The term is associated with Customer Development (Steve Blank) and Lean Startup (Eric Ries) methodologies

Steve Blank – Customer Development

� Silicon Valley serial entrepreneur (Zilog, MIPS, Convergent, E.piphany…)

� Developed Customer Development methodology

� Scientific approach to be applied by startups and entrepreneurs to improve their product success by better understanding their customers

� Basic concept is a balanced relationship between developing a product and understanding the customer

Eric Ries – Lean Startup� Was a student and then a collaborator of Blank

� Popularized the Lean Startup methodologies for developing businesses and processes of which Customer Development is a key component

� Shorten product development cycles by� Business-hypothesis-driven experimentation

� Iterative product releases

� Validated learning

The Minimum Viable Product� Make a version of a new product which allows your team to

collect the maximum amount of validated learning about customers with the least effort

� The goal is to test fundamental business hypotheses (“leap of faith assumptions”) and to help entrepreneurs begin the learning process as soon as possible

WEBVAN – AN UNFORTUNATE EXAMPLE OF

UNTESTED BUSINESS HYPOTHESIS

� Online “credit and delivery” grocery service founded in 1996

� Venture capitalists invested more than $396 million in Webvan

� Built infrastructure (including warehouses, fleets of delivery trucks, etc.) to service 10 US markets (SF, Dallas, Los Angels, Chicago…)

� Raised $375 million in an IPO in 1999

� Bankrupt by 2001

ZAPPOS – A SUCCESSFUL EXAMPLE OF TESTING A

BUSINESS HYPOTHESIS WITH A MVP

� Zappos founder Nick Swinmurn wanted to test the hypothesis that customers were ready and willing to buy shoes online

� Did not initially build a fully functional ecommerce website, create a large database of footwear, or create inventory to test the hypothesis

� Instead, Swinmurn approached local shoe stores, took pictures of their inventory, posted the pictures online, bought them shoes from the stores at full price, and shipped them to the customers to validate the hypothesis

� Then he built Zappos into a multi-billion dollar business

Minimal + Viable

The Virtuous Cycle

A few words from Steve Blank

MPV to Product

Why you need an MVP� You shouldn’t sell products that you can build

� You should build products that you can sell

� An MVP� Tests product viability

� Tests assumptions

� Tests the market

� Tests product usability

� Obtains user feedback re improvements

Everything is an experiment� Internal debates do not generate facts

� Effective experiments generate facts

� You have to “get out of the building” to test your hypotheses as to what will sell

Pre-MVP (Pretotypes)� Proposals – documents describing a solution

� Smoke tests – e.g. a landing page to test curiosity and interest or buying AdWords

� Mockup demos

MVPs� An early version with minimal feature set that can be sold to

early adopters

� Crowdfunding is a viable sales channel for an MVP

� Note� A MVP isn’t a bad version of a final product

� A MVP is a viable product that is attractive to at least early adopters

Pretotype Examples� In person interview/proposal

� Smoke test: Landing page and AdWords

� Explainer videos

� Mockups

Purpose of Pretotypes� Test a product hypothesis with minimal resources

� Accelerate learning

� Reduce wasted engineering hours

� Get the product to early customers as soon as possible

Examples of Pretotypes� A large poster of a TV screen to simulate a flat screen TV that

can hang on a wall

� A PowerPoint mockup of a website

� An explainer video

� A simulated mobile application

� Landing pages

Examples of MVPs� Concierge – “Food on the Table”

� Wizard of Oz – Zappos & Groupon

� Old School – GoPro

� Crowd Funding – Pebble

� Explainer Video –Thalmic Lab

MVP: Food on the Table (Concierge) � Customized menus for meals at home

� Signed up first customer by describing the benefits and getting a subscription fee

� Provided the recipe service personally (like a personal concierge)

� Learned from their customer

� Automated later based upon that learning

MVP: Groupon (Wizard of Oz)� Skinned a Wordpress blog to say Groupon and posted daily

� If customer interested in a product, they were invited to email a request

� Used Filemaker to create PDF coupons and emailed back

� Effectively validated the demand for its service without developing an automated system

MVP: GoPro (Old Tech)� First GoPro cameras used 35mm film

� Were strapped to the user’s wrist

MVP: Pebble - Crowdfunding� Kickstarter campaign

� Raised over $10M

� Predated that Apple Watch

MVP: Thalmic Lab (Explainer Video)� Created a YouTube video

� Obtained 10,000 pre-orders ($1.5M) in first 48 hours

Try Tech-savvy Early Adopters� Ability – they “get it” without hand-holding

� Opportunity – they use technology frequently during the day

� Feedback – they’ll give you exhaustive, ongoing feedback

� Co-creation – they’ll help you bring key social systems to life

� Evangelism – they’ll spread the word when it is time to scale