Posts tagged with: strategy

Start with MVS or MAS, not MVP

Ash Maurya of Austin, TX based “Lean Stack”, describes lean startup as occurring in three stages. The first is customer discovery where you are trying for problem/solution fit. “Is this a problem? Is this a solution for the problem?” The key question there is “Can you get people to act towards a suggested solution around a properly defined problem?” I think sign ups and click throughs and qualitative measures of interest are good indicators or metrics for this question.

The second is customer validation, in which you build a product and try to get customers to validate that that product actually brings the solution to the problem. This is the first time the product shows up. Product/Market fit.

The third is creating new customers. You’ve found the balance, now you have to go turn more people into customers and grow.

So, really the most important first step is to determine whether or not you’ve found an actual problem. There could be a lot of solutions for that. So, at this stage, it’s not all that important to pick the “right” solution. Really anything that realistically suggests it can solve the problem will do. Once you’ve been able to clearly define the problem and have some traction, then you can start tweaking the product and find the “best” solution.

So, if this is the case, then it makes sense to start out with the cheapest solution. Minimum Viable Product, at this point, doesn’t actually do the concept justice. It should be Minimum Viable Solution, or, to put it in terms of a bootstrapping company, Most Affordable Solution. MVP puts too much focus on product design, and not enough focus on problem discovery.

A Business Plan is not a Treasure Map

If you’re not up-to-date on some of the current thinkings on business plans and the like, let me run through it really quick for you. In the old days, even up until I graduated Uni in 2011, a business plan was a multi-page document (30-40 pages) that you would use to plan out your business in extremely fine detail. You would analyze the product you wanted to build. You would analyze the market you were trying to penetrate. Your customers. The business climate. Etc. It was used both as a roadmap, but also as a way to try to convince banks and financiers to loan you the money to start a venture.

This doesn’t fly with startups, the term startup here to include any business venture whose proposed value is based on introducing some new feature to the market, whether that’s artificial intelligence or just basing a well-known industry around better customer service.

Business owners and entrepreneurs like Steve Blankenship and his student Eric Ries, among others, have come to understand that the key job of a startup is to test whether or not an idea has value. If you’ve ever heard the term “Minimum Viable Product” or MVP, that’s what this comes from. What’s the least expensive thing you could build or create that would demonstrate that your liquor popsicle/adult diapers/fantasy chess league is valuable and interesting enough that people will pay for it.

This solves a big problem that a lot of large companies in the past dealt with. They would take a business plan and borrow a bunch of money and execute it AND THEN go to market. Only when they arrived at the store with millions of dollars in debt would they discover that their Ford Pinto was a godawful car. The entrepreneurs of today posit that if you can discover that the Ford Pinto is a terrible car for a million or two instead of hundreds of millions, you’re actually saving time and money.

This leads me to a confession, whether by nature or nuture, I somehow, knowing everything above, still tend to think about the MVP as if it were a Treasure Map. To be more precise, when I sit down to do my one page business models/plans, I treat them as if it’s important that I deduce the direct route to the treasure. The problem with this, of course, is THERE IS NO PATH.

No matter how clever I am, I can’t decide the twentieth step in the plan by extrapolating from the first or second, because the entropy of clear information is too great. By the time I get to the twentieth step in my head, ANYTHING I DESIGN WILL BE BASED ON A REALITY THAT DOESN’T EXIST. The most insidious part of this kind of thinking, is that I tend to wait to do things until I’m sure I’m right, which, as you can guess, means nothing gets done.

This is my challenge in the weeks ahead. I must treat business plans as nothing more than a baseline on which to measure the truth of my most immediate ideas. I must remember it’s a HYPOTHESIS for the here and now, and not a unified theory of everything. You can’t fight Ronda what’s-her-face by guessing when the fight’s going to end, or she’ll punch you in the freaking mouth. Survey the landscape ahead, for sure. Know the terrain of the battlefield. But, fight the battle in front of you, not the one in your head.