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Lean startup - WhatIsMVP


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Lean startup - WhatIsMVP

  1. 1. Lean StartupWhat is MVP? Yuki Sekiguchi
  2. 2. MVP = Minimum Viable Productto test fundamental business hypotheses(such as value hypothesis and growthhypothesis)→One of the core concepts of Lean Startup.It helps entrepreneurs start the process of validatedlearning as quickly as possible. It is the fastest way toget through the Build-Measure-Learn feedback loopwith the minimum amount of effort.
  3. 3. Any additional work beyond what isrequired to start learning is waste.→MVP differs from a prototype or demo version, asMVP is designed not just to answer product design ortechnical questions. NOT a lame beta either, as MVPshould be developed with clear hypotheses and goals.
  4. 4. So, what’s exactly MVP like?For example, let’s assume that you want to provide service X, whichstarts with a one-month free trial.In order for this to work, further assume that 10% of site visitors willsign up for the free trial.When you consider that other assumptions such as conversion to paidproduct will depend on this trial sign-ups, it is important to test thisassumption first.To test, you should not develop and launch actual service X to see whathappens, as it leads to lots of waste.You may effectively test it by setting up a site with a certain amount ofinformation about the service and a button/form of free trial sign up,and measuring the completion rate of the sign-up.In this case, such site itself is MVP. (The technique is called Smoke Test.)→Type and complexity of MVP varies based on hypotheses
  5. 5. Q: Wouldn’t MVP give negativeimpression ??Remember that you are testing hypotheses with earlyadopters.Early adopters use their imagination to fill in what aproduct is missing and they actually prefer that stateof affairs. They are suspicious of something that istoo polished.→Additional features or polish beyond what early adopters demand is a form of wasted resources and time.
  6. 6. Q: Wouldn’t MVP damage the brand??As part of the challenge of being a startup is the nearimpossibility of having your product noticed byanyone, you don’t need to worry about that toomuch. However, you can easily mitigate this risk bylaunching the MVP under a different brand name.A long-term reputation is only at risk whencompanies engage in vocal launch activities such asPR and building hype. You should wait suchmarketing launch for scale until the product hasproved itself with real customers.
  7. 7. Hesitation towards MVP• Psychological hurdle of MVP can be high especially for technical founders, as the vision entrepreneurs keep in their heads is of a high-quality mainstream product that will change the world. →Remember and accept that it is the fastest way to get through the loop.• Many people want to internally strategize and debate to the death on the product, design, and features, thinking that customers wouldn’t know what they want. →It is basically the same as avoiding to face reality. Remember that there are only opinions inside the company.
  8. 8. MVP range in complexity and formdepending on hypotheses to test against.Deciding exactly how complex an MVP needsto be cannot be done formulaically. Itrequires judgment.→There are some patterns and techniquesthat have been practiced so far and you canlearn from them. But remember thatdeciding the right MVP requires humanjudgment.
  9. 9. MVP Cases#1: Groupon• Skinned Wordpress blog and posted daily• Used FileMaker to create PDF coupons and emailed• Effectively validated the demand for such service without developing a seamless system#2: Dropbox• Before starting significant technical development, made a 3 min video to demonstrate how the Dropbox is meant to work, targeting at early adopters• Call to action was to sign up for beta waiting list• Effectively validated its assumption that customers wanted the product that Dropbox was developing
  10. 10. MVP Cases#3: Food on the Table• Signed up the first customer by describing benefits of the service and its subscription fee• Without developing a software to deliver the service, the company provided its service manually and personally (Concierge MVP technique.)• Gradually automated as customers grew• Allowed the company to learn customer needs in detail and to automate functions that works and expand the scope of the service#4: Aardvark• Build a series of prototypes for ways customers could interact with the virtual assistant and get their questions answered, measuring their engagement• Once Aardvark (the sixth prototype) was chosen, continued refinement with humans replicating pieces of the backend as much as possible(Wizard of Oz testing technique.)to avoid premature and unnecessary technical development