Many companies run into problems early on because they create their products for investors instead of for their customers. Despite it seeming obvious that you should build your product for your customers and not for your investors, in reality this is actually much harder to do.
The problem lies with the desire to impress investors. Anyone trying to raise money can fall into this trap, even seasoned entrepreneurs. It’s human nature to want to impress others, especially when we’re trying to get them to give us money! Beyond trying to impress investors, you also are more likely to listen to their product inputs because of their experience and the cloak of authority that comes with their position.
While you should definitely listen to what your investors and potential investors say to you, you should also be cautious. Investors have a lot of knowledge when it comes to what’s going on in your particular industry. They get lots of pitches from your potential competitors. They might be talking to other CEOs in your industry but not customers. That’s your job. You’re in the trenches day-to-day talking to customers (if you’re not early on, you should be!). And ultimately it’s customers that make your business.
Yes, raising money can be important for the success of your business. But the most important thing of all is having customers. You want to know what will help you raise the most money? It’s not building the features that potential investors tell you to build, it’s creating a product that attracts lots of customers.
So as you’re raising money to help build your company, each time an investor gives your his or her opinion on what should go into your product ask yourself if that feature will benefit your customers. If the answer is no, forget about it. If the answer is yes, then add it to the list. Just be sure to not fall into the trap of creating a product for investors.
Everyone’s company is different. So how should you approach building your MVP?
If you hang around enough startup folks long enough, you’re bound to hear the acronym MVP thrown around. While the quality of your team does matter, it actually has nothing to do with individuals. Instead, it stands for minimum viable product.
Eric Ries made the phrase famous in his book called The Lean Startup. Ever since Ries’ book, the startup world has run with the idea. But despite many people using the phrase, it’s interpreted in many different ways.
The part that causes the most discrepancies is the viable part. Viable is a vague term and can mean something different to each company. For example, what might be viable for a mobile app is not viable for a software product that helps launch rockets into space.
The way we like to approach building MVPs is by asking the question: what is the smallest product (or the least amount of features needed) that you could make that still tests your company’s key assumptions? This question still gets at the core of what a MVP is all about but the focus now is your company’s specific needs.
Every early-staged company has some key assumptions they are making. That’s what it means to be a startup. You started with an idea but before you put anything out into the real world, all that idea is is a hypothesis. And like any good scientist, you need to test your hypothesis. Therefore, before you code anything, you need to think about what your key assumptions are and build your MVP around testing those assumptions.
And that’s it. Your key assumptions are all you should be testing when you first start out. Once you get a better sense of whether your assumptions were accurate or not, then you can keep expanding your product, testing more assumptions as you go.
The important point is to focus your MVP around what’s specific to your product. What will make or break it? That’s what you should be building to test. Everything else in your grand plan can wait because if you’re off in your key assumptions, nothing else will matter.
So before you dive into the code on your MVP, take the time to consider what it is that should even go into it.