A core component of Lean Startup methodology, developed by Eric Ries, is the build-measure-learn feedback loop. The first step is figuring out the problem that needs to be solved and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible.
Once the MVP is created, a startup can begin working on tweaking the product. Most adjustment should be made based on user feedback. If users don’t adopt the MVP, managers need to start asking pertinent “Why” questions in order to investigate the root of the problem. Why are visitors not converting to registered users? Why are users not opting to pay for extra features? Why are users closing their accounts in under a month? Questions like these can uncover structural problems in the product and potentially lead to a pivot or product course correction.
“Minimum” Is Deceiving
Don’t let the “Minimum” in MVP fool you, many entrepreneurs and successful businesses fail miserably at something that sounds very intuitive. A true MVP has a minimum set of features needed to learn from early users. The core purpose of building an MVP is to avoid building something no one actually wants. If you realize you’ve already built something no one wants, you can quickly pivot or drop the product all together so as to avoid depleting more resources. This is easier said than done. Companies with millions of dollars to spend on testing products are less attached to any particular product. Most of the entrepreneurs we do business with don’t have that luxury; precisely why we guide them toward MVP and steer them clear of costly features that their end users might not care for!
To Pivot is to change direction but stay grounded in what you’ve learned. Most startups fail but some fail early, pivot and create something great based on what they learned about their target audience. Some entrepreneurs think pivoting is in some way admitting failure and is bad, but failing in itself is not bad especially if you take all those lessons and apply them to the next iteration. Software developers understand pivoting really well and often welcome it. Building good software is about iteration, and it takes many iterations to get something right but when you get it right it usually sticks and doesn’t need to be changed for a long time.
Lean Startup Principles aim to deal with extreme uncertainty; the number one factor every startup deals with. Your product could be wicked awesome but until the market validates your assumptions everything is uncertain. The faster you build something and bring it to your users the faster you can validate your assumptions and decrease uncertainty. Spending a year(s) building something without constant user feedback is very dumb. Almost every popular application that exists today could be broken down into an MVP with minimum features and users would still use that product. Take away any 5 features that Facebook currently has and people would still use Facebook. Your product has to offer the bare minimum core features that your users need and want before you go slapping on various widgets to the program.
The problem with entrepreneurship is we are often working really hard producing high quality products that no-one wants. The creation of stuff is not valued.
– Eric Riles
Establish The Baseline
One of the most significant jobs of the entrepreneur is establishing a baseline for their product. Iteration 1 cannot contain all the bells and whistles, it cannot even contain most of them. Iteration 1 needs to be the product that crudely solves that one specific problem, nothing else. The baseline has nothing to do with cost, it has to do with speed. Sure it will most likely cost less to build a streamlined product but that’s not the ultimate goal; the goal is to go to market and learn from the target user. If you’ve noticed, I use the word ‘learn’ quite often. No matter how much knowledge you have about your target industry, you can’t possibly know how people will respond to your new product but you can certainly learn as much as fast as possible by establishing a product baseline.