As an entrepreneur, building a minimum viable product (MVP) for your business is an extremely important first step. However, a lots of start-up skip this because they see it as a road-block that is delaying success. Why invest time in making a simplistic product that does not have all the frills when you can utilize the time and money in building one that is exhaustive right from the word go.
The reason is that you need to validate if people are ready to pay for the service you are providing – unless you have a product that customers are ready to pay for, the time and money you put into building the world’s finest product may end up wasting. So in this article, we will go through the step-by-step process that will help you build an MVP for your business. This process can be used to validate most types of online and offline businesses, although there could be exceptions.
Step 1 : Define A Service
Let us say you want to build a product like Alibaba that connects the thousands of suppliers with businesses looking to source. It’s a catch-22 situation where customers do not come to you unless you have a huge directory of suppliers and the suppliers don’t care about listing till you have hundreds of businesses coming to you already. This kind of situation is the reason why lots of entrepreneurs are forced to skip the MVP and head straight to investing on a large product.
Although MVP implies building a minimal product, the optimal solution is to tweak your idea from the product concept to offering a service instead. For a product like Alibaba, you could start with a service where you offer to do the grunt work of identifying suppliers for businesses looking to source a product. If there are businesses that are ready to use your service to find suppliers for the products they want to source, they are also likely to use a product like Alibaba.
Step 2 : Build A Website For Customer Outreach
Before you start with a marketing outreach, you will need to have a website ready. Since you are only offering a service, it is sufficient to create a landing page that succinctly points out the service you are offering. You can then follow it up with either an email capturing form or a Buy button. It is extremely easy to set a landing page up and running today even if you cannot write a line of code. Make use of landing page creator tools available online to get a page done. No other fluff necessary here.
Step 3 : Market Outreach
Now the next step is to start reaching out to potential customers. As Paul Graham mentions in one of his articles, you should do things that don’t scale. For instance, you could identify a list of potential businesses that might need your service and send out a cold email or make a cold call individually. Try multiple emailing/calling scripts and study the response rate as well as the desperation from customers for a service as this.
Another way to do this is to advertise your product over Adwords and study the engagement from customers who click through to your website. What percent of customers provide their email address? How many of them are ready to hit the buy button? If you are not ready to provide a service (and are using this process to only validate the market), you could throw up an error message on hitting the buy button – the visitor leaves thinking your website is not working. But you have already validated the idea here. I would personally recommend gathering the email address of the customer somehow though. This way, you can reach out to these same people once your product is ready.
Step 4 (Optional) : Offer The Service
By now, you should already be in a position to know whether or not your idea has legs. However, if you want to get the true expectations from a customer, it is a good idea to provide the service to these customers for a while before launching the actual product. When customers pay for your service, they spell out their expectations much more clearly. This gives you valuable feedback that you must incorporate in your final product. For instance, if you were building Alibaba and the customer makes it clear that the service is not worthwhile unless you give them a quote from multiple suppliers, then you could ensure that your product is built in a way to send out RFPs to multiple suppliers and not reach out to each supplier separately.
Building an MVP is not only important to validate an idea. It is also crucial to know that if an MVP does not produce results as expected, you should either pivot and tweak your ideas, or must give up on them completely. Knowing when to quit is an essential hallmark of a successful entrepreneur.