NYFT Minimum Sellable Product

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An overview of how to reach Minimum Sellable Product (MSP) for early stage startups and Labs. Class offered via NY Fashion Technology Accelerator at AlleyNYC, course contributed by Koombea.

Koombea is a product development agency specializing in mobile apps and technology.

More information at koombea.com/MVP

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NYFT Minimum Sellable Product

  1. 1. Minimum Sellable Product #ALLEYMSP NYFT Lab 2 June 2014 Ellie Cachette, VP Product Marketing
  2. 2. Minimum Sellable Product “The absolute minimum product functionality needed to charge or make money.” Hint: it probably doesn’t exist yet
  3. 3. How Do You Sell Something That Doesn’t Exist? 1.Understand a current and urgent need 2.Provide immediate value 3.Strong marketing position
  4. 4. “Fake it til you Make it”
  5. 5. 1. Understand a Current and Urgent Need: •Do you understand the space and market? (What direction its headed) •Do you have one potential client already? •Can you easily integrate with existing systems? (software or otherwise)
  6. 6. 2. Provide Immediate Value: •Do you ADD value? (revenues or profits) •Can you bring something hard to get? (traffic, sales leads, inventory)
  7. 7. 3. Strong Marketing Proposition: •Can you explain what you want to do? •Can you adapt your pitch easily? •Do you have “the basics”? One pagers, page link, email templates, a website…
  8. 8. But How Do I Built it?
  9. 9. Did the check clear?
  10. 10. No, but really……….. Did the check clear?
  11. 11. Do not built it yet: •If you cannot replicate the messaging for 10 other clients •If you don’t know the “core features” •If you don’t know how much you can charge in the alpha or beta (otherwise you cannot calculate a ROI)
  12. 12. Start building ASAP: •If you have a list of core or minimum features •You need an estimate or quote for technology costs •You can leverage existing technologies: Mailchimp, Twilio, Sketch etc
  13. 13. …but… but… •Beware of enterprise sales cycles •If your app or solution “saves money” you are not urgently needed •Time is the enemy of all deals •A signed contract is not the same as getting paid
  14. 14. A Pitch Gone Wrong “But Ellie… I’m on a rocketship” Kent Anderson, Macys
  15. 15. Most startups don’t know how to make money •Can you accept multiple types of payments? (credit card, paypal, wire etc) •Do you have an invoicing or billing system? (Recurly, Stripe, Freshbooks…) •Have you thought about pricing or terms of a pilot program?
  16. 16. Exercise: Make an Invoice As surprising as this may sound, figure out how you would describe what you are doing and how it would look with charges.
  17. 17. Have you found the gaps? •Competitor products? •Existing Systems (Enterprise) •What are your main hurdles?
  18. 18. What Kind of Company Are You? •Service: Uber, deliveries, logistics •Product: Clothing, lotion, tangible goods •Saas: web app, mobile app, something that can be downloaded •Backend: hardcore tech. Another story.
  19. 19. Newsflash: in an Agile world of MVP and MSP we all start as a service. The Question is: How smart is your customer?
  20. 20. Questions.
  21. 21. Customers.
  22. 22. Smart Customers = Smart Success If you don’t respect your customer or understand their niche and important value, then your customer isn’t “dumb” your market isn’t big enough
  23. 23. “But I want to disrupt” Don’t slip. Remember Rule #1
  24. 24. Rule #1: Make Money
  25. 25. There is truth in revenue.
  26. 26. If You Cannot Make Money • You are not solving a problem • You have not convinced someone of your ability to execute • You cannot “disrupt” if you cannot pay your bills
  27. 27. Are You Your Own Customer? How many of “you” are out there? 10 or 10,000 or 10,000,000?
  28. 28. Short Checklist • Do you already have a customer? • Do you know what you do? • Is this in your are of expertise? • Can you poach expertise? • How fast can you build? • Do you have time or money?
  29. 29. How Do You Accept Feedback? Have you setup a system yet to track feedback and organize notes from your users and customers? Smart Feedback = nothing without implementation
  30. 30. How Fast is the “Turn Around”?
  31. 31. Orange Flags •Feedback takes more than three (3) business days •The customer has never done this before or worked with a small company •More than one signoff is needed for changes •You tell the customer what they want
  32. 32. Red Flags •The customer doesn’t like to use email •The company doesn’t or hasn’t worked with startups before •There are expensive old systems to overhaul •You need a lot of “inventory” first
  33. 33. Fake Red Flags •The company or enterprise wants you to meet or work with their accelerator or lab •Diligence around company valuation and IP •Customer list is requested
  34. 34. Disclaimer to Founders: •If its easier to copy your idea than work with you, then your idea isn’t good enough.
  35. 35. Why You? Why Now?
  36. 36. Building.
  37. 37. How To Build a MVP
  38. 38. What is your “Landing”? • Use weebly, squarespace, or wordpress
  39. 39. Minimal viable product. It’s lean & agile. You get more versions faster & often to create the best, ultimate app. Why a MVP?
  40. 40. Quick Checklist Choosing an idea Evaluating a niche Ideas to stay away from Getting started Building/finding a development partner
  41. 41. v1. Choose an idea What is your expertise? Scratching “the itch” Be careful of scratching the itch.
  42. 42. 2. Evaluating a niche Landing pages Pre-orders Customer interviews Acquistion channels
  43. 43. Customer Validation Resources “How to talk to customers & your business is a good idea when everyone http://momtestbook.com/ http://www.stevenblank.com/books.html The Lean Startup approach to new ventures.
  44. 44. 3. Ideas to stay away from Marketplaces “Social network for x” Feature driven softwares
  45. 45. v More than 1000 companies funded for the Instagram vertical… Only one got acquired.
  46. 46. So, how do you get started?
  47. 47. • Concierge MVP. • Start small & solve one problem. • Reduce risks. 4. Getting started
  48. 48. Getting started Resources Paul Graham talks about not letting your ego get in the way and to do things that don’t scale. “Doing things that don’t scale.” http://paulgraham.com/ds.html
  49. 49. 5. Start
  50. 50. 1. Gather notes & basic sketches (wireframes). 2. Prototype. 3. Set launch objectives. 5. Building/Finding
  51. 51. 1. Start Requirements Document 2. Start Getting Proposals 3. Free Code? (Github, APIs) Things to Do
  52. 52. Building Resources? http://balsamiq.com
  53. 53. Leave room for iterations & discovery.
  54. 54. 3 Costly Mistakes 1. Worrying about problems you don’t have.2. Spending too much time on your first release. 3. Not validating the problem enough and showing the value you provide.
  55. 55. Find a dev partner. Or Tech.
  56. 56. It’s important to find a partner or agency that will drive you to achieve in your objectives.
  57. 57. Or you can learn to code http://teamtreehouse.com/ https://www.codeschool.com/
  58. 58. Stop waiting and start doing. You don’t need to be technical to start it.
  59. 59. The first 2 steps.. You NEED to do 1. Pick a person/niche 2. Do a Sales Safari/consumer behavior research
  60. 60. *Make a list of potential websites, channels, places & sources. Coffee shops, parks Train stations, bus stops Mom blogs Facebook groups Websites
  61. 61. Make a list of keywords, problems, & phrases • What are your keywords? • Is your branding aligned with your customers? (ie. Blues or reds or language) • SEO: start thinking now
  62. 62. Focus on the people you’d like to help 3. Their current solutions 2. Their goals & problems 1. Type of customer
  63. 63. Remember all those times you groaned a robot could do your job?
  64. 64. Going from “Service” to “Automation” 2. Tasks & Processes in those jobs 1. Jobs they hire you for Example? Dashable, checkins
  65. 65. Bridge the real-world w/ the digital world 2. Inefficient processes and pointless problems 1. old industries
  66. 66. Be careful with your Costs for Acquisition.. It’s usually much more than you think.
  67. 67. Example: • HR software costs a lot • You think you could make it for a lot cheaper than that. • So what happens?
  68. 68. Make something w/ less steps Human Desire Steps in current process Example? Blogging, which is web publishing with fewer steps Communication, self- expression, travel, shelter, education, dating, entertainment, showing off, gaining wealth, creativity,
  69. 69. What will be huge? Growing niches Example? Digital media Rising cultural trends Rising tech trends Strongly held beliefs about the future
  70. 70. Next steps: SELLING and GTM
  71. 71. Selling Checklist: 1.Can you quickly train a sales rep? 2.Is there a central place for product information? 3.Could your grandma sell it? (Family is the 1st referral source. Friends second)
  72. 72. What Next? 1.Sell it 2.Build it 3.Sell More
  73. 73. Tips for Selling: •Don’t be afraid to cold call •If you don’t want to tell strangers what you are doing, its not a big enough idea •Make it EASY for the customer to pay and move on

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