Author: Jorge García-Luengo

(This is the second part of a post published last week)

You don’t need to be able to serve the whole market with your MVP

Lets do some simple maths. Say your customer is the tablet owner with children from 3 to 6 years old. Around 50m people worldwide could fit that description. Approximately 58% will be running their tablets on iOS, 23% on Android, 6 % on Windows, etc (Forrester Research 2013). When you consider this data before building your MVP you might be tempted to say: “If I build my MVP for iOS I have a served available market of 29m people, but if I also build it for Android I can cover an additional 11m people, and that’s nearly 40% more!”

Don’t do that. It’s a trap. You’ll start both developments, one will always be ahead of the other and, until you find a good fit, iterations will have you mutating your apps with the knowledge you’ve extracted from the most advanced application. As a result the laggard version will only be pumping resources from your start-up and no value will be added to you Customer Development.

Lets say your first version of your MVP costs 13k $, each iteration costs 2k $, and you need to do 5 iterations before you find a product that people use and love:

  • If you did both versions on parallel you spent 46k $
  • If you only did one Operating System (O.S.) until the product was validated and only then you developed the second O.S., then you spent 36k $

That means you spent 27% more cash when you added a second O.S., and if you were using the same number of developers you also spent more time so you would have to add overheads. You spent more money and time, but you arrived to the same result.

In Product Validation you want people discovering your service, using it and coming back to it. Success is not measured in volume but in proportion. For example, if you create awareness on your product for just 100 users, 20 of which engaged, and 16 are recurrent users, well, there might only be 16 people, but your product is a huge success! If you can show this kind of metrics you will always find the funding you need to develop on all Operating Systems. A funnel that shows a retention rate of 16% with an addressable market of 50m looks pretty sexy.

Marketing your product while searching for Product Validation

This leads us to the next challenge, the famous Marketing Plan. In my opinion there is not such thing as implementing a Marketing Plan if you still haven’t validated your product or service. You still need to create awareness on your product though, and people need to understand clearly what your product does. Creating awareness does require using some of the market research that you’ve put in place when you designed the first version (or versions) of your Business Model. For example you need to direct your efforts towards the most interesting customer segments.

To continue with the example of Web Diamonds: What should they do to create awareness? Find a channel that’s cheap and efficient and invest regularly on it. Choosing the right channel should be cheap and fast. Web Diamonds could try spending 50 $ one week on each of the most attractive alternatives (e.g. Facebook, eBay, Twitter), and choose the most effective. Then they would invest a small regular sum every week or month, and track their progress throughout time. We want to keep as many variables of the experiment as steady as possible, so stick to one channel and don’t move. If you feel tempted to say, “my product doesn’t sell because I’m on the wrong channel”, well, prove it.

The product is not the only thing you will need to validate. Creating value is the most essential thing, but channels of communication and distribution (and all the other blocks of the Business Model) are elements where a start-up might want to innovate and therefore test and validate.

Whether you have a clear Marketing Plan or an innovative communication strategy you will invest in different channels and messages, focus on different aspects of your value proposition, and play with the emotional aspects of your product. These variables and many more will influence the way people engage and use your product, even if the underlying Value Proposition stays the same. If you do that you will learn about how to better communicate but you will lose control on the real value that people are extracting from your product or service. You might end up having many leads but you will waste them if they don’t find enough value on what your offering. That’s why trying to Grow your product and Validate your Value Proposition simultaneously is not a good idea, you will waste resources in your communication is good but your Value Proposition is poor, and you wont be able to measure your improvements when you iterate.

Always be aware of your cash

The advice here is very simple. Calculate the number of weeks (or months if your pockets are full) you’ve got left with the current burn rate, and draw that number on your forefront every Monday (or at least on a post-it that you’ll stick somewhere it can’t be avoided).

Making decisions ignoring this number is not smart. Hiring someone to work on a service or feature scheduled to be available after you run out of cash is not clever. Creating partnerships that will serve you in a future that’s beyond the day you run out of cash is not wise.

A start-up is all about passion, creativity, and innovation. People want to commit to their idea, and there is a strong temptation to do that in a way that could hurt. Some public symbols of engagement (like going to South Africa to buy half of your cash in diamonds, of hiring a designer that works with Cartier to create a very exclusive brand image) might excite and motivate the founders, but it’s not the way to proceed.

Think about the actions you undertake: Are they teaching you something? Will they result in a better understanding of your product, your customer or its problems? Will they create value for your customer? If that is so, will you be able to measure it? When you look at your motivations, is your customer in your heart? Or is your product taking that place. And finally look at the mirror and read the number written on your forefront. Be wise.


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