At NaperLaunch and in the NaperLaunch Academy, we promote and teach the Lean Startup Process. As described on our blog, that process was developed by Steve Blank and Eric Ries to help would-be entrepreneurs start new enterprises and bring new products to market. Others, including Frank Robinson, Ash Maurya, and Alex Osterwalder, originated or helped define many of the lean concepts used today.
There is much to learn from these noteworthy entrepreneurs, authors, and teachers. One key concept common among all of them is the Minimum Viable Product, originated by Frank Robinson. This term is easily misunderstood and there are sometimes divergent ideas about what it is.
The MVP was originally intended to describe a faster method to develop new products. Instead of a lengthy, expensive process to build the perfect product, this method starts with a simple version of the product that is suitable for testing with customers to see if they will buy it and appreciate using it.
The Build-Measure-Learn Feedback Loop (see Fig. 1) is a key step in the Lean Startup and supports product design improvements and enhancements. The point is to develop a minimum viable product that allows for testing the value hypothesis – the belief that customers will find the product attractive, useful, and desirable.
Building off initial ideas and using a MVP for customer testing, and then measuring customer feedback gives the enterprise faster and earlier learning opportunities. In this way, better iterations of a product offering come to market sooner and give a stronger advantage to the enterprise.The Minimum Viable Offering
So how does this concept of a MVP relate to the business founder who is not creating a new product, or for that matter, isn’t offering a product at all, but is in a service business? While this concept was originally developed in the technology and software industries and intended specifically for new product development, we believe the concept is adaptable to the development of other types of products and even services.
In our opinion, a manufacturing, contracting, wholesale, retail, e-commerce, or service business can utilize the lean startup process and follow the same basic approach to get to a minimum viable offering. The offering can be whatever product or service is envisioned by the startup. It is the value offering of an enterprise for which customers will pay.
Any new offering should solve a customer problem, or there is no value in it. The offering must pass the value hypothesis test. This requirement is true even if the “new” offering is more of an enhanced version or a next generation improvement in the offering. To confirm the value of an offering, customer reactions are still the key ingredient – do they find value in the offering? If not, then the enterprise can continue the Feedback Loop process by experimenting and learning from customer interactions. From there, adjustments can be made in future iterations of the offering. The more customer interactions that are observed and measured, the better the development process and, ultimately, the better a product or service offering will be received in the marketplace.The Pivot
The Lean Startup Process includes another step that is followed if a MVP cannot be built based on the initial ideas. In this case, it is time to pivot. An entrepreneurial pivot becomes obvious when customer feedback disproves the value hypothesis. This means that the offering is not accepted by customers or considered valuable to the marketplace. In this outcome it becomes necessary to change strategy without changing mission – the Pivot.
The search for a market/product fit continues, but new strategies are needed. In fact, this decision to pivot or persevere should arise regularly and at frequent intervals during the startup process.Scale Up Success
When a minimum viable offering is achieved and the market feedback indicates that the offering has long-lasting value, then it becomes the foundation of the enterprise. Out of the various iterations of the offering, a final successful offering is determined. It should be duplicatable and should be produced over again and again. Build it fast and scale it as soon as possible and the enterprise will achieve significant growth and success.Summary
Our modified approach to the concepts of Lean Startup and MVP are transferrable to other industries and business models. That modification has been proven successful by many dozens of NaperLaunch members who have succeeded by applying the concepts learned at NaperLaunch. More information about the NaperLaunch Academy and future workshop dates can be found on our website.Reading List
For more information about the Lean Startup Process, check out these books, available at the Naperville Public Library.