The Cheapest Way to Start Your Business? Test a Minimum Viable Product (MVP)
You Are a Startup
Even if you’re not working in tech, if you happen to be creating new products & services under conditions of uncertainty, your organization is by definition a startup. Well, at least in the way Eric Ries, author of The Lean Startup, defines things. In his mind, entrepreneurs can be anyone, as long as they’re depending on innovation (or creativity) for growth, and a product (or service) is ultimately anything customers experience from their interactions with you. Value, in this sense, then becomes anything benefiting the customer, and if it doesn’t benefit the customer - it’s waste. And waste is what you want to avoid at all costs.
If You’re Not Creating Value, You’re Generating Waste
Waste can be extremely expensive. It’s created when you spend a fortune in both time and money to design an elaborate plan based on the wrong assumptions. It’s created when you ask “can this be built?” rather than asking “should this product exist?” Waste is also created when you set out to only ship a highly polished product before you even consider getting customer feedback. Why are these choices wasteful? Because if you put all of your eggs into this one basket, and the basket fails, not only do you lose all of your eggs but also all of the time, energy, and money invested. Plus, you’ll have to start over completely, which will be even more costly in terms of time, money, and energy - finite resources you may not necessarily have.
In the tech world, there are two main processes to consider in relation to waste:
This is the “traditional” way of doing things. It’s a step-by-step process in which a product is only seen by customers once certain steps have been completed. In software development, this might look like performing an analysis of the problem, agreeing on a design, building the code, testing with early users, and then shipping. Now, this system may have worked well in manufacturing during the industrial age, but when creating new products and services under conditions of uncertainty (as you’ll probably be doing), this old school methodology can lead to excessive waste. Why? Because uncertainty equates to a lack of knowledge. So, in essence, you’re flying blind - unsure of what your customers truly want or if your concept will even be able to meet their needs and expectations. And you can lose a lot of money this way, especially since this specific process makes it extremely difficult to stay within a well-defined budget. (If anything goes wrong or has to change, you can bet your ass you’ll be paying for it, if not now, later.) Finally, if you do conduct product development in this manner, and discover upon launching your product that no one wants or needs it…ouch.
Also known as the “Scrum Framework,” this software development methodology has effectively been around since the late 1990’s, although the term “Agile” wasn’t introduced until 2001. Basically, what this process does is take the idea of Waterfall development and put its step-by-step nature into a series of iterative sprints. Each sprint is short with clearly defined goals, making it far easier to implement necessary changes. But, unlike in the Waterfall process, a premium is placed on customer feedback. And it’s that feedback that helps you learn exactly what your customers want and if you can provide it. This minimizes waste by forcing you to face reality as it applies to your business idea, ultimately preventing you from endlessly redefining your plans with no end in sight. Furthermore, it enables you to test your assumptions in real time, so that when you do ship a “final” product, you know that there is a market for it, which also eliminates waste from the process.
Follow the Build-Measure-Learn Feedback Loop
Sure, it doesn’t have the same ring to it as “follow the yellow brick road,” but it’s just as important for your product (and business) development journey. Why? Because transforming your ideas into valuable products (and services) requires a scientific approach. First, you start with your hypothesis or assumption, build something that represents that idea, test it with potential customers, analyze the results, and then adjust your idea based on what you’ve learned. From there, you repeat the cycle until you’re ready for growth (read: able to “cross the chasm” into mainstream markets). Not only will this process establish what you need to learn, but it will also make evident what product you must build. Of course, to begin this process, you must start with a Minimum Viable Product, or MVP.
KISS: Keep It Simple Stupid
An MVP is the bare minimum version of your product. It’s supposed to be just enough to test your idea or business hypothesis, while also providing some value to your customers without creating waste. At the same time, you’ll be using your MVP to gather actionable feedback from your customers so that you can continuously improve your product with each iteration along the Build-Measure-Learn Feedback Loop.
It’s this simple creation that will help you de-risk the investment in your idea and eliminate waste far more effectively within each sprint or cycle. And the goal of your MVP is to constantly reduce your time in this feedback loop, which would indicate that your product is constantly improving. Furthermore, this focus on experimentation will enable you to “fail fast,” meaning that you will know what’s working and what’s not necessary far more quickly. And through these “micro fails,” you’ll always be able to determine if you’re on the right path towards having a viable business or not.
So avoid perfection and test the bare minimum build early and often with actual prospects and customers to determine if your business idea is actually worth pursuing. Anything more than that, or anything that doesn’t lead to to learning, is waste. And waste is the last thing you want.
The Application for Artists & Creatives:
Don’t confuse the lessons of the MVP with producing half-hearted shit. You still need your MVP to be a high quality offering. It just means don’t plan on writing a trilogy until you’ve tested the premise with either a short story or the first book. Don’t plan on creating a fashion line until you’ve created a few basics or original pieces that customers love. And don’t plan on recording an album in a professional studio until you’ve created a few demos and gotten feedback. Still do the best work you can at that point in time, but make the smallest product you can in order to test.
To give you a personal example: I’m currently working on a novel that takes place on the show jumping circuit. I wrote my first full draft, then sent it off to a few readers who I knew would appreciate this brand of literature in order to get actionable feedback. Right away, they told me that they had to look up show jumping terms - things I thought were second nature, like bridle, stirrup, bit, and oxer. Turns out, I was too “in it” to realize that average readers don’t know that much about show jumping and it’s my job to educate them in an easy and inviting way. So, in my latest iteration, I’m addressing that problem.
So, you could argue that my first draft was my MVP. I learned something through that iteration through customer feedback. Now I’m revising my MVP, which I’ll test again, and so on and so forth. The original draft was still the best work I could do at that point in time, and this second draft is even better because I’ve grown through the experience. Therefore, as an artist, simply think in iterations and test your products with real people. Their feedback can be invaluable. And since gatekeepers rarely give feedback, it gives you an opportunity to grow independently and specifically for your audience.
In Conclusion: Be Lazy
Don’t do any work beyond the bare minimum required to learn. Don’t fall into the trap of elaborate plans devised in your bubble, the pursuit of perfect, or detailed assumptions not rooted in facts. Get out there and test your idea in the marketplace with an MVP. It’s the only way you’ll learn, and according to Eric Ries, whoever learns the fastest wins!