This article is part of a serie about going from “I’d like to start a business” to having a small start-up running, and beyond. If you haven’t read the previous articles, I recommend you do so by going to the first one, which includes a small table of contents.
You have probably noticed some obsession of mine with keeping our time and material resources investment as low as possible until we discover if our idea has any hopes of creating value for someone and becoming a profitable business. This is by no means an idea I came up with; it’s part of a philosophy called Lean Startup. Before I get to the main topic of this post, I would like to make a brief introduction to this way of understanding a startup’s development.
The Lean Startup philosophy is an adaptation from Lean Manufacturing (the famous Toyota System) to startups . In the case of the Toyota System, the main concern was to reduce factory waste. In the case of a startup, our most precious resource is time. One of the worst things that can happen to a startup is investing months building a product or service nobody wants. The Lean Startup philosophy pushes us to reduce as much as possible the waste of our most valuable resource: time. The time that it will take us to learn what is it exactly that our customers want.
As a general rule to avoid waste, we should understand that the activities that generate value are those which let us learn what our customers value. Everything else is probably waste. Besides focusing on this activities, it’s important to understand how that learning takes place. More on that later on ;)
What’s an MVP
Let’s get back to this post’s main topic. So far we have invested our time in developing an idea, doing some initial testing and investigating if it’s feasible to turn that idea into a profitable business (in terms of market size, margins, and so on) The next step is putting a first version of our product in front of customers and see what happens (will they buy? how are they going to behave? etc.)
I will keep using the example in which we’re selling basic t-shirts through an online store. What we should do is set up a little factory, buy a nice amount of raw materials, hire and train the right people, recruit a team of rock star developers to come out with a wonderful site… Wait! Do you remember that “most precious resource” of ours? Yes, time. And cash reserves as well. OK, what do we want to do everything I just described for? As I said before, it’s to find somebody will buy our product, and how many units we might sell. Doing what I just described would take some months and a couple thousand dollars. If there’s a faster and cheaper way to sell our first t-shirt and find out if it is of value for anybody, then by executing the original plan we are generating an awful lot of waste. Yeap, you got it: there is such a way, and it’s called the Minimum Viable Product, or MVP.
An MVP is the version of a product with just the absolutely essential features that make it possible to put it in the wild. Which are going to be that features depend on the project we’re developing, and choosing them is not that simple. In our case, we definitely don’t need a factory, just a place where we can buy t-shirts. It doesn’t even have to be a wholesaler. That will make margins really tiny, and logistics will be pretty inefficient, but remember: our MVPs objective is not to generate high profits, but to get feedback as early as possible. When it comes to the website, we don’t need to develop something from the ground up with all the features we can come up with; we just need a store with a payment gateway and some generic template that will let us start selling.
How to build your MVP
The good news is you don’t need to know how to code or be an industry expert in order to build your MVP. There are platforms that are relatively simple to use, pretty scalable and that will let us have an MVP ready in weeks (may be less)
WordPress: It’s a lot more than a blogging platform. There are hundreds of extensions and plug-ins that will let us add our site a wide variety of functionalities; in some cases features are there out of the box, in some others we’ll need just a bit of thinking. Groupons’ first version was a wordpress blog in which the founders uploaded a coupon daily (and later generated the coupons manually). Do you want to build a niche job board? There’s a plug-in for that. A website to handle Salons reservations? There’s a plug-in for that. And so on.
Shopify: It lets you create online stores in which you can sell all kind of goods, such as our t-shirts. There’s a really big community of developers and designers just in case you want to hire some talent, and it works great.
Ning – If there’s something our world does not need, that is another social network… but if you really feel the one you have in mind is worth it, Ning is the way to go.
Google – No, Google has no MVP-building solution. However, it’s a great place to find that solution yourself. A little bit of research will help you find exactly what you’re looking for: there are literally hundreds of options for you to explore.
These are just some tools. It’s up to you now to do some thinking and find out what’s the best way to build your MPV as efficiently as possible. For the time being, I’ll leave you with that task: take your time and build it! We’ll meet again in some weeks to see what to do once our MPV is ready.
Here goes a question to our most experienced readers: What tools would you recommend someone looking to build his first MPV? What advice would you give him?
***** When defining Lean Startup I realized I never defined what a Startup is. Better late than never. There are lots of definitions, but the one I find most accurate is the following one: a startup is a group of people trying to turn an innovative product into a profitable and scalable business.
*As regards the Lean Startup philosophy, it’s “parents” are Steve Blank and Eric Ries, I recommend you read a bit more about it.