Essay - Published: 2022.08.03 | business | creation-cycle | product |
DISCLOSURE: If you buy through affiliate links, I may earn a small commission. (disclosures)
Startup heavyweights from Y Combinator to Tech Stars to 500 tout Minimum Viable Products (MVPs) as the golden standard for startup iteration. But the truth is most founders still get this wrong. They spend too much time, effort, and resources to create an MVP that eats up their runway and fails to move their startup forward.
In this post I'll introduce a philosophy and framework for building MVPs the right way. We'll solve for the most common pitfalls founders make so you don't spend months and thousands of dollars building something nobody wants.
MVPs (Minimum Viable Products) are a source of frequent confusion among founders - both new and experienced. Frequent questions include:
It's this confusion that leads so many founders to spend months building something that nobody actually wants.
So how do we do better? How do we make MVPs that actually help our startup progress vs burning runway?
It all starts with why. But first, some declarations:
When we look at the markets like this, we notice that in order to create a Business, we basically need to verify a strategy that covers Market x Product x Business. A strategy is really a set of hypotheses based on the current state of the world or Market (if we do STRATEGY, then we'll get RESULTS).
So basically all of our Business plans are made of and based on hypotheses. So if we actually hope to fulfill these plans then a good first step is to actually verify these hypotheses. If any are proven false then our business plan must change in some way as they're based on incorrect data.
This is where MVPs come in. An MVP is really the Minimum Viable Experiment we can use to verify one or more of these hypotheses. So as you think about MVPs and what features you need to build (if any), you really need to ask yourself one question:
The MVP is should be the answer to this question. Because of this, I actually believe that MVE (Minimum Viable Experiment) is a more apt name for this as it more clearly conveys its purpose.
Now that we understand why we're building the MVE (Minimum Viable Experiment), we can get to work doing it.
The first thing we need to understand is taht every business is based on a set of core assumptions. For our business to be successful, these core assumptions must be understood and verified. The faster we can verify these assumptions, the faster we can capitalize on a promising opportunity or pivot from a strategy based on false assumptions.
Common core assumptions that underlie most businesses:
The hypothesis that underlies your business then is that all of these core assumptions are true. Thus each of these assumptions is a hypothesis underlying your business.
Now how do we actually go about testing this hypothesis?
We do it with some age-old, battle-hardened systems - the Scientific Method! The scientific method has been used for centuries to rigorously test unknowns and it's equally applicable to products and startups where we're really trying to understand the market and how to impact it.
The basic Scientific Method is:
This has been condensed and repurposed for the application of startups / products many times. For instance, Eric Ries' The Lean Startup introduces the Build - Measure - Learn framework:
I created The Creation Cycle which is a more generalized, streamlined approach specifically for building products:
The MVE fits directly in the experimentation phase. By using a hypothesis testing framework with an MVE we are able to create a cycle of continuous learning and iteration to make informed guesses about what might work and rigorously understand if it worked or not.
Thus the actual form of your MVE is whatever best helps you test the core assumptions / hypotheses that underlie your business / creation. This could be:
Once you have your Why in mind, it's much easier to determine what actually needs to go into your MVE.
So now we understand what MVPs and MVEs are and how we can leverage the Scientific Method via The Creation Cycle to iterate on products to test our hypotheses. Now I want to give some examples to show how we can leverage this process to actually build towards a sustainable business.
To do this, we're going to pretend like we're building a business and go through each of these steps. In particular, I'm going to call out the specific hypotheses we may have and how we can test them.
Example business: An app that displays happy hours in NYC
Goal: Create hypotheses for the state of the world and how we can impact it.
Goal: Create MVEs to test our hypotheses.
Goal: Compile Validated Learnings from this Cycle to improve the next Cycle.
Building startups can be a long, hard journey. Don't make it longer and harder by wasting resources on MVPs that don't actually test your business' core assumptions or move your startup forward.
Leverage MVEs and efficient frameworks for hypothesis testing like The Creation Cycle for smooth, disciplined iterations. It won't guarantee startup success, but it will guarantee less wasted cycles.
The best way to support my work is to like / comment / share for the algorithm and subscribe for future updates.