Zibtek Nailing Your MVP eBook

THE SMART ENTREPRENEUR’S GUIDE TO NAILING YOUR MVP

THE SMART ENTREPRENEUR’S GUIDE TO NAILING YOUR MVP2

INTRODUCTION

Everybody loves a tasty origin story. Who doesn’t savor the tale of a billion dollar company that was once a humble startup in someone’s garage? Or the saga of a business that just raised $200 million in funding that got its start at somebody’s kitchen table? Or the group of savvy innovators who just sold their business for $400 million after building the company out of a dorm room?

We eat these stories up. Why? Because it’s easy to relate to the humble beginnings that are a common theme of massively successful businesses. Plus it gives the hope that with a good idea, strong work ethic, and time commitment... you might actually make it to the top someday. Then, if you do get there, you can look back with fond memories about where it all started.

The fact remains, however, that most startups fail. And when they do, it’s too easy to declare they didn’t succeed because the founder(s) didn’t work hard enough or build what they set out to build. While this may be the truth, not much can be learned from such a trite assessment. The only lesson learned is, “That startup failed because the founder didn’t work hard enough; ipso facto, my startup can succeed if I just work harder than she or he did.”


“Startup success is not a consequence of good genes or being in the right place at the right time. Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught.”

Ries goes on to outline the Lean Startup concepts that have had a tremendously positive effect on startups from a wide variety of industries. The Lean philosophy emphasizes the importance of getting through the Build → Measure → Learn loop as quickly as possible. To do this, Ries recommends a combination of informed experimentation, iterative product releases, and what he calls “validated learning”.

The first step is figuring out what problem you want to solve for your future customers. Then, you need to develop a Minimum Viable Product (MVP) to test your assumptions.

Alas, startup success entails much more than a cool origin story and relentless work ethic. Eric Ries, in his introduction for The Lean Startup, makes the point that it’s more complicated than that, but this is actually a good thing:


An MVP is a stripped down version of a product that you can quickly create to (hopefully) deliver customer value. This will provide you with the fastest way to get through the Build/Measure/Learn loop with the least amount of effort. Nailing your MVP prevents you from sinking time and money into solving the wrong problem for the wrong customers with the wrong solution.

And you don’t have to take just our word for it. Techstars, the #1 startup accelerator in the world, follows the MVP principles. With an acceptance rate of less than 1% (more competitive than Harvard), Techstars saw the value in our philosophy and provided us with some of the best and brightest mentors from around the country.

If that’s not enough to convince you, over the past 18 months, we have created 33 MVPs for various startups. The companies we have helped to launch MVPs for include firms from a wide range of industries: Zinch, Orapup, Quotadeck, National Ad Manager, Smartfunded, NetMedAl, Oh Hello, MatchMate, and many others.

In this ebook, we’ve taken our experience developing MVPs and condensed it down into five principles every entrepreneur should know. As you embark on your journey towards creating a sustainable business, consider these principles as the lifeline to the possibility of success.


Y Combinator is a Silicon Valley-based accelerator that has helped fund over 500 companies in its 9-year history. Their portfolio includes giants like Airbnb, Reddit, and Dropbox. Getting into the Y Combinator is a competitive process, but one thing you absolutely don’t need to get in is a business plan. They don’t ever read them.

Sam Altman, the president at Y Combinator, explained this logic in an interview with Russell Roberts on the EconTalk podcast:

1. DON’T BOTHER WITH A BORING WRITTEN BUSINESS PLAN

“At the stage that we are operating at, (a business plan) is irrelevant...We would rather them spend the time working on their product, talking to users. What we care about is: Have you built a product? Have you spoken to users? Can we see that?”

Written business plans take a lot of time to create and don’t allow the flexibility you need as your business grows. However, it’s still important to map out your business model and document your hypotheses, which you can do effectively with a Lean Canvas.


Lean Canvas is an actionable and entrepreneur-focused business plan. It focuses on problems, solutions, key metrics and competitive advantages. With hundreds of different things you could be doing, a Lean Canvas helps you hone in on the 1 or 2 things that should take top priority.

Here is a sample of a Lean Canvas:

PROBLEM SOLUTION

PRODUCT MARKET

KEY METRICS

UNIQUE VALUEPROPOSITION

UNFAIRADVANTAGE

CUSTOMERSEGMENTS

Top 3 problems Top 3 features Single, clear, compellingmessagethat states whyyou are di�erent and worth paying attention to.

Can’t be easilycopied or bought

Target customers

Key activitiesyou measure

CHANNELS

Path tocustomers

REVENUE STREAMS

Revenue modelLife Time ValueRevenueGross Margin

COST STRUCTURE

Customer Acquisition CostsDistribution CostsHostingPeople, etc.


A Lean Canvas captures the same level of information as a traditional business plan, but in a single page. It also gives you much more flexibility to switch to a Plan B if Plan A doesn’t work out. An MVP combined with a Lean Canvas allows you to transition to a new plan without running out of resources.

Being able to boil down the essentials of your business model onto a single page can pay huge dividends. When you meet with customers or potential investors, you won’t have much time to describe your entire vision, and so a Lean Canvas can help you effectively and concisely explain your business. If you can describe your customer’s problems clearly and succinctly, you can get to the heart of why your solution fits.

An MVP is the smallest solution that delivers customer value, and a Lean Canvas will give you valuable insight into what it should entail. Being intimately familiar with your customers and their problems will give you a head start in the race to deliver customer value.


Although it’s right there in the name, the Minimum Viable Product isn’t actually about the product. The product is merely the vehicle that you use to acquire validated learning about how to build a sustainable business.

2. PLACE YOUR PRIMARY FOCUS ON THE LEARNING, NOT THE PRODUCT

“Minimum” does not mean “less difficult.” In fact, in many ways, an MVP requires more work because you need to be ready to measure its impact. This is a rigorous, unpredictable process that requires you to be creative about how to measure your progress. You will need to keep track of metrics and analytics, and you will definitely need to do interviews and talk directly to the people who use your product.

To create an MVP, it helps to simplify your product so that the features you work on today are directed toward your early adopters. What problem are you trying to solve? And what are the attributes of the group of people who have that problem? When you have this group of people defined, you will be able to narrow down the set of features you will want the MVP to include. The product won’t be perfect and it will lack many of the features you will soon learn are essential, but the goal of the MVP is to focus on the riskiest assumptions and begin the learning process.


It also helps to think in terms of 10x cycles. Once you have defined the group of people most likely to suffer from the problem you are trying to solve, think about what you need to build for your first 10 customers. Then once those 10 are finding value, decide what you need to build for 100 customers to use it. Then 1,000, and so on. This will help you narrow down what features are essential today and allows you to think of your product in terms of 2-3 week cycles instead of months.

Your early adopters and visionary customers are more likely than you to know whether your product works or not. However, they might not be entirely sure what they want, so an MVP helps by providing a concrete example of what your product looks like (or could look like). You might end up finding there is virtually no interest on the customers’ end. Or, if you’ve truly hit on something that solves a pain point in their lives, they will start begging you for more, asking every day when they can get their hands on the next iteration of your product.

You will need to carefully monitor the change in consumer behavior that results from each new iteration. Conduct interviews with your early adopters and identify core metrics to monitor in order to validate and learn from every release and iteration cycle. An update may frustrate some of your early adopters, but their negative reaction shouldn’t steer you if the overall change in customer behavior is positive. Make sure to gather a consensus of 10 people who give you the same feedback before whiplashing around on every suggestion.


Customer feedback is an important part of each iteration of your MVP, but you don’t need to focus on getting every bit of feedback that you can. Your goal should be to get only enough feedback to discover whether you’re completely crazy or on the right track. Don’t ask customers what they want, because most of them don’t know what they want—an MVP gives you the chance to test whether they actually do want the service you provide.


As discussed in the previous step, an important aspect of nailing your MVP is finding a core group of people whose lives will be bettered by your product. Unfortunately, these people won’t come to you; you’re going to have to go out and recruit them.

3. DO THINGS THAT DON’T SCALE

At the beginning, the methods that you use to recruit new customers will not be scalable. A great deal of time and energy will be required, both in identifying the right group of people and then convincing them to give your product a chance. However, the goal of an MVP is to acquire as much validated learning as possible. No one is better suited for helping you with this than a group of visionary customers and early adopters.

Many founders are deterred from these methods because the amount of user feedback seems so small. Having a pathetically small number of customers can be depressing, and it’s hard to get excited about pounding the pavement to bring just a few more people into the fold.


Keep in mind, many fantastically successful companies dealt with tiny numbers at the beginning, expending great efforts to recruit new users. In the early days of Airbnb, for example, the founders went door-to-door in New York City to ask people to list their apartments and to help existing users update their listings. This type of effort, although unsustainable in the long haul, gave Airbnb the opportunity to test different iterations of their service on a core group of users.

Another example is Quotadeck, a platform that provides businesses with warm introductions to get in the door to to their target companies. Much of the work in the beginning was manual. For example, a business would come to them seeking a connection, and someone at Quotadeck would try to match them up with the right connector. Then, they would call the connector to get them excited about working together. In the process, they learned a great deal about what each entity was looking for. This model won’t scale or be profitable in the long-term, but for Quotadeck it was the best way to gather learning.

In short, don’t let a small number of customers discourage you. The key advantage? You really get to know your buyer persona. Instead of investing in expensive data-mining to learn about consumer behavior, you can do in-person interviews or phone calls.


It’s not hard to convince most entrepreneurs that their MVP doesn’t need to include all the features they would like. But when it comes down to it, their instincts about what to include and what not to include are likely way off base.

For instance, launching without a “Forgot your password?” mechanism in place is perfectly okay. You also may not need a “confirm email registration” process or a number of other features that might seem essential.

In fact, you don’t even need a product with your MVP.

4. YOUR MVP NEEDS FEWER FEATURES THAN YOU THINK

The goal of your first MVP should be to test how to reach new customers – what message do you have to convey to get people interested in what you are saying? It’s quite possible that absolutely no one is interested in what you have to offer, in which it could be a giant waste of time to create even the most stripped down version of your product.


Take Dropbox, for example. The cloud storing startup began with a landing page as its MVP. The page included a short demo video and a form to capture email addresses for those who wanted to sign up for a product that hadn’t been released yet. 70,000 signups later, the landing page helped confirm a strong product-market fit. There are now over 300 million users and 4 million businesses signed up to use Dropbox.

You may end up releasing a product that doesn’t include a specific feature. Your customers may laugh, scorn, and tease you for releasing a product without that feature. Just remember – this isn’t a bad thing. The point of an MVP is to allow customers to communicate to you what is important to them. The worst response from a customer isn’t a negative one; it’s no response at all.


Entrepreneurs are by nature a passionate group. They are especially passionate about the product they are trying to bring to market. As a result, their instincts about what constitutes an MVP are often way off base.

This is understandable – a product or service is an entrepreneur’s baby, and it can be hard to take an unbiased look at your creation without thinking that it needs every little feature. However, the goal of an MVP is to gain the most amount of validated learning in the shortest amount of time, and so it will take some real intellectual honesty to get the most out of each iteration.

5. BE AWARE OF YOUR BIASES AND DO EVERYTHING YOU CAN TO MINIMIZE THEM

Intellectual honesty is a trait characterized by an unbiased, honest attitude that seeks to obtain facts in their true form. If you have intellectual honesty, you will be more likely to accept what other people have to say about your product. Their feedback will be more meaningful, and you will maximize the amount of validated learning you get with each product iteration.


As previously discussed, the group you can trust most to receive honest feedback from are your early adopters and visionary customers. With no emotional connection to your product, they know better than you whether your product actually works. Your goal as an entrepreneur should be to stop seeing your product as your baby and to see it instead as something that is supposed to be solving a problem.

MVPs are easier to do than to argue about. If you can overcome your fear and reduce your biases about your product, you can get to the learning a lot quicker.


The MVP is a key piece in turning on the learning engine for any entrepreneurial venture. Avoid spending time and money on developing a product that nobody wants, and instead find early adopters who may end up helping to shape your product into a disruptive force.

Nothing about an MVP is particularly easy or straight-forward, and getting the most out of each iteration requires a great deal of analytical rigor. The alternative to this is spending weeks and months on a product that may not end up having a market. And although an MVP won’t give you all the answers to your questions, it will help you come up with the most intelligent questions that will guide your strategy.

CONCLUSION


MVPs are a passion of ours, as our CTO and founder, Cache Merrill, is highly active in the startup community. He was the CTO of Zinch from its very beginning up through its acquisition by Chegg. He stayed with the company up through Chegg’s IPO, and now he leverages the same patterns and great relationships built over the past 13 years to help people overcome the challenges of working with international teams.

We are well aware of the complaints that many have reported when dealing with international developers. The most frequent complaints are about communication and quality. We have addressed those issues by ensuring all international teams are managed by U.S. account managers, each of whom have strong technical backgrounds. Our engineers have extensive experience in Ruby, PHP, .NET, Java, Python, SQL,JS/Jquery, HTML5, Mobile Development, and CMS systems, and we make certain that they continually work to improve their skill sets.

WHY ZIBTEK?

We can provide you with a team of two full time engineers, a Chief Technology Officer, a Project Manager, an Architect, and a Systems Administrator. We will test your product market fit, get an MVP out and iterate with your market too see if there is a fit. This process typically takes about 4-6 months, and we can get you started at $9K per month.


With dozens of them under our belt, we at Zibtek have gained tremendous insights into the process of nailing an MVP. We are highly active in the startup community and have helped several companies get their products off the ground. Our experience and business model allows us to bring our cost down to an affordable range, and we have a strong grip on how an MVP strategy should fit in with the entire Lean methodology.

Ready to get started on your MVP? Let’s Talk.

CONTACT US

http://zibtek.com/contact-us/

Date post:	19-Feb-2017
Category:	Business
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