For many businesses and startups today, less can actually be more. Credit the increasing popularity of minimum viable product (MVP) theory, a business strategy which advocates shipping smaller and more polished, yet less expansive and robust products more rapidly. Using its principles, businesses are able to rightsize products or services, bring them to market faster and more quickly generate stable income that can be reinvested into new iterations. Unlike crowdfunding (a popular form of online investment), MVP theory doesn’t ask consumers for funds; it does, however, provide considerable opportunity to solicit feedback and generate excitement among smaller target groups, letting you build better businesses and products.
According to advocates, it’s far preferable to produce a less complex product that’s built around a few artfully-realized features versus spending time and money on a far-reaching venture that tries to be all things to all people. By doing so, proponents say, you’re able to produce sharper results on tighter turnaround, offer more timely responses to market developments, and bring cash in the door faster, allowing for healthier, more organic growth. Moreover, once on the market, initial products can be used as an interactive focus test unto themselves, providing the chance to source consumer feedback that can be directly incorporated into future iterations.
Here are a few hints, tips and strategies for designing a product around this philosophy.
- Plan Extensively Up-Front and Keep Production Cycles Manageable — When scoping out a product and plotting a production calendar, by all means strive to innovate and push boundaries. However, a lot of companies undeniably kill their products through over-ambitious designs – a problem more commonly known as “feature creep,” or trying to cram in too much. One product can’t hope to please everyone though, and focus produces enhanced results. It’s far better to serve a niche with a brisk, but polished product with a handful of innovations than it is to produce an incredibly complex product that does many things poorly. Before entering active production, make certain to trim every bit of fat from concepts and designs, and allot extra time for building and testing prototypes that offer a vertical slice, or working sample, of the end product. This will allow you to quickly get a sense of how well concepts are coming together, create a working demo that’s ready to wow onlookers, and ultimately produce a clean, polished product that makes consumers happy and gets them talking. Be sure to source customer feedback as you go too, so that you can make adjustments to product designs and craft marketing strategies accordingly.
- Release in Parts Versus One Big Whole — Spending upwards of 12 months to develop a grand-scale product means that you’re taking a huge gamble. The virtual equivalent of reading tea leaves and hoping you’ll correctly divine where the market’s headed months hence, you might as well throw darts at a board and hope they’ll land on the correct guesstimate. Stakes are higher than ever today for those speculating on cultural zeitgeists as well. Fail to accurately interpret market forecasts, and your product effectively exists in limbo burning overhead for no good reason, only to flop when it’s eventually released. Instead of attempting to project so far out with ambitious designs, consider releasing more limited versions of your product in waves over the course of the same time period. That way, consumers can have access to the product sooner rather than later. This allows you to discern if a project’s connecting out of the gate at less expense, start the process of brand building and bring in revenue streams more rapidly that can help fund future projects. Moreover, a more piecemeal release schedule makes it far easier to respond to breaking developments in the marketplace, and tailor future versions of your product around direct fan feedback. Too many entrepreneurs spend millions up-front creating lavish websites, apps and services that hinge on consumers pressing a single button or answering a specific call to action. As MVP strategies illustrate, perhaps it’s wiser to see if you can cause any action whatsoever first before committing to thousands of man-hours of production, or piling more expensive functionality on the back-end.
- Expand Only as Progress Dictates — It’s important to get a polished, functional version of your product into the public eye as quickly as possible. But from there, you should also make a point of growing organically according to actual cash flow, and criticism and compliments from consumers. Expanding too fast or launching a huge product with a “bang” can potentially overwhelm your financial wherewithal or overwhelm the customer. Instead, it’s often smarter to grow at a slow and steady pace so you don’t needlessly inflate head count or monthly burn, and give a product the chance to evolve and find its core audience. Too many companies start with an overambitious plan which they’re pre-committed to adhere to, or push too far too fast in the hope of growing rapidly to meet investors’ expectations. The wiser goal: Work to build a small, loyal fanbase and stable recurring revenues, then reinvest in expanding your product and company. Once stability’s been established, you can see what’s working and adjust strategic roadmaps and plans for expansion or acquisition accordingly. Military theorist Carl von Clausewitz once observed that “no plan survives contact with the enemy.” As battle-hardened executive generals leading their troops to war well know, being flexible and able to turn on a dime is crucial to survival, today moreso than ever.
“Crowdfunding” is a grassroots means of financing projects. Essentially, people who believe in a particular movement and/or product gather in one spot to offer money and support in hopes of seeing the creator’s ideas get off the ground. Typically, monetary donations are regarded as a pledge, and the donor is rewarded according to his or her level of contribution with one of a kind experiences, merchandise or physical goods. (Not equity in the venture, though the recent passage of the JOBS act will soon change this.) The Internet’s best crowdfunding websites inform interested parties about the project at hand, details the rewards offered, and are updated with new information as the project progresses.
Ideas that are commonly crowdfunded and brought to life through the magic of crowdsourcing include self-published books, independent video games, independent movies and music CD albums, and even community projects, like urban gardens. Even though the idea behind crowdfunding isn’t new, its popularity has exploded thanks to the recent multimillion-dollar successes such as Double Fine Adventure and the Pebble: E-Paper Watch have come via the Internet herding humanity together into one space. If you have a dream but you lack the cash to make it soar, crowdfunding might be your best option.
Need a platform? Here are five of the Internet’s best crowdfunding websites:
KickStarter – Arguably the biggest name in crowdfunding platforms, KickStarter’s support for video pitches goes a long way to make project seem more personal. Artists and game designers are especially drawn to Kickstarter, as the platform makes it easy to offer incentives for people who pledge. Kickstarter does operate on a deadline system: if the target amount isn’t reached by a certain date, the funding falls through and nobody’s credit card is charged.
IndieGoGo – IndieGoGo is a user-friendly site that appeals to artists, designers, and movie-makers. Unlike Kickstarter, IndieGoGo allows project organizers to close a project before the target amount of funding is reached, but transaction fees go up from 4% to 9%.
RocketHub – Like Kickstarter and IndieGogo, RocketHub is one of the most popular platforms for crowdsourcing and crowdfunding new projects and businesses. Billing itself as “the world’s funding machine,” it provides a ready vehicle for raising money for not only entrepreneurs, but also artists, scientists, bedroom hackers and neighborhood inventors. Interestingly, some submissions can quality given LaunchPad Opportunities, or promotional programs that add more visibility, in the real world, e.g. a showing of your artwork in a popular gallery.
DonorsChoose – DonorsChoose is ideal for teachers that are looking to fund needs in classrooms and schools. It’s definitely a welcome idea, given how cash-strapped most schools are these days. Over 7,000 donors have reached over 45,000 kids.
33needs – 33needs is another service that’s tailored to small entrepreneurs. It’s a web-based application that connects hopefuls to interested investors. Projects are divided into several categories, including “The Planet,” “Education,” “Community,” etc.
For more information on crowdfunding and available platforms, visit:
[Image source: Venturebeat]