Sell Your Minimal Viable Product, then Build Your Business
If you’re going to build a house, it only makes sense to test the foundation to ensure it can support the mansion your about to build, right? With a sound foundation you can build a strong house to live in for years to come – so why not take the same approach to building your enterprise?
Today we are going to talk about exactly that, how to test the foundation of your startup idea before putting a shovel in the ground. Much like a homebuilder you can have paying tenants before the house is finished!
The tool we are going to use to do this is called a minimal viable product (MVP) – the bare minimum set of features required to learn from the early adopters in your target market. The good thing is, you don’t often need technical skills to build one.
Assuming you’ve stepped outside of the building to discover the problem-solution fit with your customers, developing your MVP is when talk turns into action. At this point you’ve clearly defined the pain points of your future customers, and identified solutions to solve their problems. Now it’s time to experiment and ask them to put their money where their mouth is.
An MVP should have just enough features to allow you to deliver value to your early adopters, get paid, and gather feedback to further develop your product.
“But wouldn’t it be a lot faster to just build the entire product before showing customers my rough idea? I don’t want anyone to steal my idea or think my first prototype sucks and ignore me!”
Gone are the days of “build it and they will come”. Building an MVP enables you to have constant feedback from customers to ensure you are building something the market wants, while maximizing learning. Your time and money is finite – you’ll get the biggest bang for your buck with an MVP – not to mention develop a way better product in the end.
So at this point you’re probably wondering what an MVP looks like, and how to make one yourself. Here are a few options you can explore:
An Explainer Video
An explainer video is exactly what is sounds like; a 1-2 minute video explaining your product or service, and why someone should buy it. Ideally, you want your explainer video to leave your target market saying, “Sign me up!”
Waterloo startup, Thalmic Labs, did a great job at using an explainer video to prove the market demand for their new MYO armband. The MYO is a unique control device, which measures muscle movement and electrical impulses, and translates those into a control mechanism to your devices via Bluetooth.
With this explainer video alone Thalmic Labs pre-sold 10,000 units in the first 2 days, and has now pre-sold well over 25,000 units, hitting $4 million in total sales before shipping a single product. Talk about a grand slam.
Even if you’re using an explainer video don’t be afraid to ask for the sale.
This is exactly how you want an MVP to work. With these results Thalmic Labs has raised $1.1 million in seed funding, been accepted into the Y-Combinator, and is on track to release their MYO device in early 2014!
If you’re going to use an explainer video as your MVP be sure to integrate technology such as Vidyard to measure the engagement of your audience. There is no sense on testing an MVP if you aren’t going to measure its success!
A landing page is a single web page visitors land on after clicking on a link from a tweet, facebook ad, email etc. A landing page is a great tool to quickly assemble an MVP and test your value proposition, product-solution fit, and even your pricing.
The worst thing you can do with a landing page is load it with text. You have roughly 8 seconds to capture the attention of your visitor. Communication should be simple and clear – Why is the visitor on your page? What problem does your product solve for the visitor? Oh, and don’t forget to call your visitor to action with a bright “Sign Up Now” or “Pre-Order Today!” button.
PumpUp has done a great job with their landing page. Clean, attractive, and easy to understand. They’ve also made it extremely easy for me to share their landing page with my network via facebook and twitter. As a visitor I am far more inclined to share a site like this or register for a trial/demo.
If you’re going to choose the landing page route here’s a few of things to get you going:
- Craft your landing page. We love Unbounce. It’s a simple software that allows you to build, publish, and test your landing page – no technical skills required!
- Setup Google Analytics. Don’t miss this step. This will help you measure the percentage of visitors that sign up for your product/service. You can plug Google Analytics directly into Unbounce.
- Drive traffic to your landing page. Get creative with this and use different channels of communication. Setting up a Google Adword or Facebook Ad campaign is a good way to get started. Try and stay away from sending your page exclusively to your friends. In the spirit of experimentation you want randomized traffic, and to avoid bias.
- Follow-up with your visitors. Collecting a visitor’s contact information will enable you to reach out one-on-one and learn more from your customers.
Rather than building a landing page or a video, why not deliver your product or service manually? The concierge MVP is our personal favorite for two reasons: 1) you expedite learning by working directly with your end-user, and 2) it’s the fastest way to answer your biggest question, “is my product solving a real problem that is worth paying for?”
Essentially you are going to manually deliver the exact product or service to test whether or not it’s a “must-have” for your customer. If you can’t get your customers excited about your product face to face, it won’t happen on a website that no one has visited before.
A great example of the “Concierge MVP” is Food on the Table! Not to long ago Food on the Table set out to create a tool to provide families with easy weekly recipes, and a grocery list catered to items on sale at a local grocer.
Avoiding a website all together, the CEO of Food on the Table, Manuel Rosso, identified a few shoppers who were interested in their services. Manuel would visit each customer in person week after week and bring custom made grocery lists and recipes for the week based on the customer’s preferences and which items were on sale.
To truly validate his business Manuel would also pick up a check for $9.95 after each meeting for the service he provided. If you were an investor would you rather invest in someone with the intention to build a website to give families weekly recipes and shopping lists, or someone who has been selling this service in person and looking to scale their business online?
Check out this video if you want to learn about the Food on the Table Concierge MVP in greater detail!
Because of this MVP, Manuel and the Food on the Table team expedited learning, hashed out a few key iterations, validated the business model, and clearly identified which elements of their business were most suitable for automation via technology. Today they are off to the races scaling across North America with a great product.
How can you turn your idea into a concierge service? We’d love to hear ideas in the comments below!
Discover your problem-solution fit, build an MVP, validate your business model through experimentation, then start building.
Entrepreneurship Community Coordinator