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Tuesday, May 25, 2010

Minimal Viable Product

Aside from the usage of expletives, there are several other similarities in Jonathan Wegener's Minimal Viable Product (MVP) article to my "Kevin Costner is Full of Sh*t" posting (more on the title below).

A little background: an Minimal Viable Product is the 1.0 version of your software, service, product, whatever, that you can go to market with. It is called minimally viable because it is just that: it is the quickest thing you can whip up that demonstrates your core thesis or offering, with little room for much else. Reid Hoffman, founder of LinkedIn, famously said: “If you’re not embarrassed by the first version of your product, you’ve launched too late.”

This principle can be difficult to follow. Jonathan Wegener, author of Back of the Envelope, points out:
"Manhattan is full of gorgeous skyscrapers. No self-respecting person walks around thinking to themselves “Gosh, if I were going to build a skyscraper, I’d want mine to look like sh*t.” That just doesn’t happen! Instead, we have a natural tendency to want to ‘one up’ the status quo: “I’m going to build a skyscraper out of gold!”"
I was guilty of giving into this line of thinking when I was building myBusinessTies in 2005 (a Facebook for Wall Street back when Facebook was just for college kids). I was following the Kevin Costner "build it and they will come" mantra. I developed a fully featured and stylistically beautiful networking platform, but had no customers and no idea how to acquire them, or even if they wanted what I was peddling. My result: long development time and significant effort invested, full product, but no idea if anyone wanted to use it, and no user marketing strategies.

If following the MVP strategy is the way to go, you might wonder why you don't see more of them out there. The answer that Jonathan offers up is:
"the heart of the issue is that very few of these minimal viable products exist in the real world. Why? They rarely stick around! Customer feedback quickly drives additional improvements and features. Soon, memories of the mediocre original product completely fade away!"
Bingo. MVP either guides your product forward quickly or advises you to cut your losses, avoiding over investment into a less-than-promising venture. What I should have done with myBusinessTies was spend less time developing and more time reaching out to my potential customer-base, demonstrating the core offering of the platform, gathering feedback, and then iterating my product appropriately (or realizing that Wall Street didn't want an exclusive web-based network). Either way, better than marching blindly forward.

If it helps, realize your product only has to be an MVP for a short time. After you gather feedback and have a better idea where to push your product next, you'll step out of that category towards a Viable Product that is polished and professional.

The key is this: don't blindly over develop and over invest, but rather practice customer discovery and development and don't hesitate to get out in front of potential customers and clients as early as possible. It will make you a happier entrepreneur.

Monday, May 17, 2010

Solving the "Marketplace" Business Model

I came across an interesting article today about how to solve the "marketplace" business model issue. The article was posted on A Smart Bear and you can read the full text here. I wanted to share it with the Good Dinosaur collective, perhaps a rousing entrepreneurial discussion will ensue.

There are several inherent difficulties in establishing a market place:

  • You have a double-sided market that you must capture. This is also known as the chicken and egg problem.

  • Your venture itself must be two companies in one, appealing to both sides independently to win adoption.

  • Size can matter. You often can't bootstrap your way to success when it comes to market place establishment. It can be a go big (and spend big!), or go home situation.

The article discusses several viable ways to persever over these challenges, such as attempting to build up the supply side of your market first by offering incentives or targeting a specific niche so you can carve out a space for yourself.

At CollegeJobConnect, we've experienced the challenges in establishing a market place, so this article rings especially true. We are currently pursuing several campaigns to build our roster of companies that want to leverage us for undergraduate recruitment come the fall (attack the supply side). We are also setting up several student affiliate programs at our target schools to increase undergraduate adoption (win both sides in parallel, carve out our niche, scale up quickly).

I'd be more than happy to discuss at length with anyone that is interested. And if you know enterprising undergraduates that are interested in working with our startup, please let me know. Exciting stuff!