So, you have a great idea for a product or service. You have conducted an extensive market study about the idea, looked at the competition and assessed viability through secondary research (desktop research). You have a very good feeling about this and you decide to jump in. Now what? Most of the people at this stage, if not engineers themselves, start looking for technical development partners to start working towards their Minimum Viable Product (MVP). After all, that is what ‘The Lean Startup’ recommends.
The MVP is one of the most misunderstood concepts in the Lean Startup world. Some people think that the MVP is about building the first version of their product really, really fast. They lock their engineers, technical development partners and/or themselves in a room and work towards developing that first MVP.
Some of you might ask, “how can the MVP not be about the ‘product’ when the word ‘product’ is in the phrase?”
If you look the definition of an MVP (See here), you will quickly realize that the MVP is not the first iteration of the product. When deciding upon your MVP you should be thinking “Experiment” not “product.” The outcomes you should be looking for are measurable evidence and validated learning. Did what you expect to occur actually happen? If not, what did and how does that inform what we should do next?
When you look at it from another angle, the MVP is just a vehicle for you and your team to validate or invalidate your assumptions. It will help you answer critical questions. Validate learning is THE unit of progress in the Lean Startup process. To effectively gain validated learnings, you need to do be clear about what assumptions you will be proving or disproving before you build your MVP:
- The problem that you are looking to solve. Is that really a problem for your target customers?
- Is your proposed solution an acceptable way to solve the problem?
- Do your target customers care about the value proposition you are communicating?
- Pick a specific set of metrics to decide the success or failure of your experiment.
Your Hypothesis statement could look like this:
We believe that
[these target customers] are facing [the problem]
By [building this solution or feature]
will achieve [this outcome]
We will know we are successful when we see [this signal from the market].
For Example:
We believe that
Young brides and grooms are facing the problem of deciding how to reliably ensure that they get to enjoy their honeymoon within their budgets without hassles
By building an online Q&A driven solution that gives them the best honeymoon options based on their budget, preferences and desired experiences
Will achieve a strong viral demand from young brides and grooms
We will know we are successful when we see
- that A% of site visitors complete the directed Q&A
- B% of visitors will want to study their itinerary and package in detail
- C% of visitors share their favorite itineraries on facebook and/or twitter
Only when you have a falsifiable hypothesis statement can you start building a minimum viable product as it gives you exactly the set of features you need to include in your MVP. For instance, with the above hypothesis statement, you can exactly determine what features are essential for your MVP.
I can think of a few examples of how others have taken this path. But one stands out in mind: Snapdeal. I was not in India in the initial days of Snapdeal. But the stories I heard from some of the folks did make me deduce the Lean Startup approach the founders took.
You may already know that Snapdeal, the eCommerce giant of India started as a daily deal website. What is interesting to note is how did they used the hypothesis driven approach to build their MVP.
The founders had already tried a few ideas before but did not find a good product-market-business model mix. So when they started looking at the daily deal model, they didn’t go running about to create a full featured product to make this happen. They started with a simple daily email list where they published the deals and sent them around. The point is that they were more interested in proving or disproving their hypothesis for the need to daily deal model in India rather than building a full-fledged product. It was not the most elegant or sexy solution to start with, but it proved that the demand for the product/service exists and then it was relatively easier for them to continue moving down the path of building their daily deal business model and then introduce product sale and then a market place model for eCommerce.
Snapdeal is certainly a success story and goes on to show how can you start with a relatively small and cheap, hypothesis driven lean startup approach and then continue to build on your validated learnings.
Don’t make the mistake of spending too much time and money in building a product without validating your approach. Stop obsessing about your MVP. Rather than build, build, build, take some time to craft a falsifiable hypothesis statement.