Many startups struggle with the concept of a minimum viable product (also known as an MVP). A number of clients that I work with believe that they need to have a perfectly functional and polished product before they show it to anyone. As a result, they will spend countless hours and significant amounts of money developing and refining their product without any input from a customer. In many cases, these entrepreneurs end up building something that nobody wants, and as a result, their startup collapses due to poor sales.
Instead, entrepreneurs need to think about what truly constitutes a minimum viable product. An early stage startup must focus on iterating their product quickly while spending as little cash as possible. The idea is to experiment as much possible, as quickly as possible. An entrepreneur must ask himself or herself, “What are the 5 most important ideas to be tested in a minimum viable product?” and “How can I test these ideas with spending the least amount of money and time?”.
The development from minimum viable product to commercial product is a progression. For initial experimentation, startups can receive significant value from a simple hand-drawn wireframe of their software or model of their physical product. After receiving feedback from customers, startups can upgrade from a sketch to a functioning prototype, or what I like to call the ‘garage prototype’, meaning an ugly but operating digital or physical product that may have exposed wires or buggy code. Again, after receiving customer feedback on this version, a startup can develop a more refined version.
Mike Kitchen, from WealthSimple, gives a great talk on how to build, and iterate, your MVP. Notice how WealthSimple began with a minimum viable product of a basic Excel spreadsheet that was used to gather feedback from a small group of users. Using that feedback, Mike improved his product, added more features, then sought more feedback from a larger group of users. As a result, WealthSimple built a very successful startup built upon real customer needs without over-engineering the product.