Published in 2011, Eric Reis’s book The Lean Startup became the blueprint that dozens of “web 2.0” companies were built against. At a high level, the book promotes an “agile” like approach to developing a new company. Loosely speaking, the “happy path” to building a new startup would involve synthesizing ideas into a minimal viable product (MVP), receiving feedback, rapidly iterating, and finally reaching product market fit. Due to its simplicity and wide applicability, the “lean startup methodology” has become wildly popular especially among first time entrepreneurs. With this popularity, the concept of a “MVP” has basically become a buzzword rallying cry to justify what people are building.
Unfortunately, a common problem we’ve noticed is that people focus solely on the MVP and end up neglecting the other parts of the business, notably sales and marketing. To combat this, you should really be thinking of building a minimal viable business instead of specifically an MVP. Ok great, so what are the components of an MVB?
The product that you’re actually building is ultimately going to be one of the most important parts of your new business. Surprisingly, I’d argue that the exact features that make it into the MVP aren’t terribly important. What is key, is that your users experience an “aha!” moment while using the product which will help you convey the value. Another key takeaway is less is more. Start small and grow the product to avoid leaving users overwhelmed, confused, and discouraged.
Awesome. So you’ve built a fantastic product, now how are you going to get in front of people? First time tech founders often overlook an effective user acquisition strategy and it ends up being a major risk factor for them. Hallmarks of an effective strategy are that it needs to be replicable, measurable, and generally affordable. Because of this, “getting great PR”, “going viral” or “buying a super bowl commercial” generally don’t qualify as tractable strategies. Instead, things like paid search, affiliate marketing, and native content ads would be more reasonable strategies to consider.
Community is another area that is often overlooked. Even though it’s usually associated with B2C companies, it’s still important for B2B companies. On the B2C side, the majority of users are less likely to engage with “empty” social sites since no one wants to be the only person at the party. You’ll need a strategy to seed any social features your site has and also keep the heartbeat there once you launch. From a B2B perspective, you’ll still need to think about things like answering support issues, writing newsletters, and generating blog content. Although they seem trivial, having an actionable plan for these “community” issues helps establish user trust and win brand champions.
The last piece of the “minimum viable business” are the KPIs and metrics that you’re looking to track. Tracking key indicators is important because they provide a yardstick to let you know if you’re moving in the the right direction. A key point is to make sure you’re tracking useful numbers. Vanity metrics like “# of followers” or “page views” aren’t really going to help you determine the health of your business. You’ll need numbers like “customer acquisition cost” or “lifetime value” which help you distill how your company is doing.
That’s a wrap
Wrapping up, building an MVP is just one of the components of building a successful startup. You’ll need to consider several other important aspects which will help you build, measure, and iterate along your path to building a successful company.
As with all advice, just remember that 90% of all advice is bullshit.