The Death of the MVP (Minimum Viable Product) in Competitive Markets
Recently, its felt more and more part of my morning routine to sit down with my tea, my in-print WSJ daily (thank goodness), and my tablet to discover an eBlast, eInvite or thrice forwarded email from an acquaintance whose son, daughter or former intern has a launch product in need of vetting. Sure, I am rooting for the young and ambitious - the restless intern and the former mailroom staff of America - and I’d even go as far as saying that this underdog mentality is shared by the majority of tech entrepreneurs. However, all entrepreneurial sentiment not withstanding, why are friends of friends pointing their product dev. questions towards me? Following the sale of Bantam Live (acquired by Constant Contact in February of 2011) I became a founding team member in search of a new project. This Fall I launched Groove™, which has been described by The Next Web as a “freshly conceived customer support solution and a beautiful, full-feature iOS application.” And with VC’s and Angels knocking on our door, and our latest, refined enhancement cycle approaching release date, I’m more aware than ever of what real value looks like.
Bottom line, there is no shortage of tech start-ups today. In earnest, the “why” is superfluous - I’m not going to discuss macro trends or some of the ridiculous valuations as of late - fundamentals (or lack there of) as they pertain to valuation methodology because its only going to upset me. Let’s just simplify the damned thing and call it what it is: a gold rush; 1849 or 1897, take your pick. It’s sexy, it’s relevant, it’s online and consumable, and apparently it doesn’t require a revenue stream (or proof thereof) to merit a bank-busting buyout. Barriers to entry being what they are, plenty of people are already in the game prospecting. So with so many foaming at the mouth to get in, it comes as no surprise that “ubiquity” is the word that is growing in popularity amongst critics, investment pundits and product dev experts to describe the red ocean of the app boom.
The high view: desktop, mobile and emerging platform app market continues to barrel along like an Oregon Trail bound wagon set to “grueling”. Seed and angel capital are increasingly more accessible as blood returns to the knuckles of the less risk averse investor, and new OPM-backed beta’s with 6-month, angel-backed leashes continue to drop every day. With every next drop the sprawling competitive landscape becomes more and more pancaked shaped. In my opinion, its time to sound the alarm; its time that new entrants raise the bar or throw in the towel.
So what of the proverbial “bar”? I feel like Tony Soprano here (is this reference still relevant?) but the bar commands respect; perhaps more appropriate, and indubitably less relevant is Nicholas Cage in The Rock (1996), “the second you don’t respect this, it kills you.” So to come full circle, I can’t help but shake my head in disappointment to see so many products for which “the bar” is being pissed on - down right sullied and left in the mud.
If you were to ask today’s most successful CEO’s and strategic visionaries what their brand touchstone is, objectively speaking, every single response would acknowledge the proverbial bar, and raising that sucker. I don’t care if you’re IBM, chugging along at 12% (yoy), you’re raising that thing or it is burying you. This is particularly true of markets with high degrees of rivalry, namely the web software and mobile app space. Right? So what happened to this gleaming compass for product dev. standards!? How did these young entrepreneurs come to understand that releasing feature-thin, buggy, broken or unfinished products into the majors is the right play?
Traditionally, the MVP (Minimum Viable Product) mantra has been an effective one - kudos to Eric Reis and Steve Blank. The MVP, however, is an objective criteria, and there in the gray area of interpretation does the MVP fall apart. So where do we draw the line? What features make the cut? What UX compromises do we make? And what degree of polish is required of our visual presentation? The easy answer is simply “do more”.
More is expensive, and for that reason the ever-iterating MVP is a pretty popular approach. And with an MVP model you can do a few things very well, most of the time:
In bluer oceans this approach was acceptable, but more and more frequently startup folks seem to think that, by following the MVP strategy, it’s OK to simply launch a “minimal product”. What happened to the “Viable” part? These products have been compromised and rationalized to death, or been simply launched incomplete. As a result, their initial public launch is so sluggish and uninspiring that any launch energy they should have leveraged thereafter quickly dissipates. Note: failure to convert initial launch energy is often times a death sentence.
Timing. Burn rate. Investor benchmarks left unmet. It’s all quicksand, and without traction your chances at failing are much greater. Simply put, if you’re launching an app in a competitive B to B market you better bring your A game because an MVP isn’t going to cut it anymore.
Let’s take a step back for a minute. For a young start up, your focal business goal should be “leveraging power”. More than half of the product authors I meet are fresh out of B-school so this isn’t a new idea. Nonetheless, they say, “leveraging power. Ok. I want that; how do I get it?” You get leveraging power with traction. “And that?”. Stop. Sound market research and timing not withstanding, to gain traction in a competitive market your product needs to be polished. Simple concept. “To what degree?”, you ask. Well, is it at least marginally better than existing product substitutes? Yes? Well, then you won’t absolutely fail, but what about switching costs or acquiring new customers? Have you thought about that pain? How do you plan to address that? At the end of the day, customers don’t want more of the same. Even if that differentiation is perceived (not real or substantive, re: “elevated functional benefit”) you need to show them something new, or wait until you have something worth sharing.
To use my most recent product Groove™ as an example: if visitors came to Groove™ and it looked like shit compared to its competitors Assistly or Zendesk, we wouldn’t have a shot in hell at converting anyone. Customers would land, bounce, and migrate to a competing product. However, because we released a gorgeous web app, with rich features from the get-go, we were in the game, competing and gaining traction.
Much of this is frustration and rhetoric, but it stems from a real trend that is happening in the web software space today. I don’t have the answer for what comes next nor do I have a new packaged buzzword or acronym to offer, ie. “Design Thinking” or “Creative Quotient”, I really couldn’t care less, but I suggest that all start ups evaluate their positions and get their thinking caps on. My cold hard advice: MVP’s aren’t for competitive B to B web apps. It’s not OK to launch a shitty app like Guy Kawasaki suggests. We didn’t follow the MVP approach with Bantam Live, and we got bought by Constant Contact in less than 2 years time. If you’re working on a consumer play, or something totally new and outrageous, than sure, you have a little more freedom than most to launch a limited feature app to test the market; grow, and continuously develop around the needs of your customers. In our B to B space, all it takes is a bit of research to know what’s hot and what’s not. Don’t be lazy. If it takes you a bit more time and money, it’ll be worth it. Rule of thumb I learned from a colleague I’ve worked with in my past ventures, “if you’re not confident showing your Grandmother your web app, don’t launch it”.
Bottom line, there is no shortage of tech start-ups today. In earnest, the “why” is superfluous - I’m not going to discuss macro trends or some of the ridiculous valuations as of late - fundamentals (or lack there of) as they pertain to valuation methodology because its only going to upset me. Let’s just simplify the damned thing and call it what it is: a gold rush; 1849 or 1897, take your pick. It’s sexy, it’s relevant, it’s online and consumable, and apparently it doesn’t require a revenue stream (or proof thereof) to merit a bank-busting buyout. Barriers to entry being what they are, plenty of people are already in the game prospecting. So with so many foaming at the mouth to get in, it comes as no surprise that “ubiquity” is the word that is growing in popularity amongst critics, investment pundits and product dev experts to describe the red ocean of the app boom.
The high view: desktop, mobile and emerging platform app market continues to barrel along like an Oregon Trail bound wagon set to “grueling”. Seed and angel capital are increasingly more accessible as blood returns to the knuckles of the less risk averse investor, and new OPM-backed beta’s with 6-month, angel-backed leashes continue to drop every day. With every next drop the sprawling competitive landscape becomes more and more pancaked shaped. In my opinion, its time to sound the alarm; its time that new entrants raise the bar or throw in the towel.
So what of the proverbial “bar”? I feel like Tony Soprano here (is this reference still relevant?) but the bar commands respect; perhaps more appropriate, and indubitably less relevant is Nicholas Cage in The Rock (1996), “the second you don’t respect this, it kills you.” So to come full circle, I can’t help but shake my head in disappointment to see so many products for which “the bar” is being pissed on - down right sullied and left in the mud.
If you were to ask today’s most successful CEO’s and strategic visionaries what their brand touchstone is, objectively speaking, every single response would acknowledge the proverbial bar, and raising that sucker. I don’t care if you’re IBM, chugging along at 12% (yoy), you’re raising that thing or it is burying you. This is particularly true of markets with high degrees of rivalry, namely the web software and mobile app space. Right? So what happened to this gleaming compass for product dev. standards!? How did these young entrepreneurs come to understand that releasing feature-thin, buggy, broken or unfinished products into the majors is the right play?
Traditionally, the MVP (Minimum Viable Product) mantra has been an effective one - kudos to Eric Reis and Steve Blank. The MVP, however, is an objective criteria, and there in the gray area of interpretation does the MVP fall apart. So where do we draw the line? What features make the cut? What UX compromises do we make? And what degree of polish is required of our visual presentation? The easy answer is simply “do more”.
More is expensive, and for that reason the ever-iterating MVP is a pretty popular approach. And with an MVP model you can do a few things very well, most of the time:
- The cost of user acquisition coupled with a more robust launch can be bonkers expensive. Therefore the cost of failing is significantly lower with the MVP model.
- You benefit from testing with real, organic use cases. No framing. No front-end rigged “imagine ifs”.
- Low-hanging fruit get pocketed. Easy pickings for quick fixes and obvious missteps.
- Bring clarity to your business goals: reprioritize and reevaluate realistic milestones
- Bring clarity to your marketing initiatives - particularly positioning language.
In bluer oceans this approach was acceptable, but more and more frequently startup folks seem to think that, by following the MVP strategy, it’s OK to simply launch a “minimal product”. What happened to the “Viable” part? These products have been compromised and rationalized to death, or been simply launched incomplete. As a result, their initial public launch is so sluggish and uninspiring that any launch energy they should have leveraged thereafter quickly dissipates. Note: failure to convert initial launch energy is often times a death sentence.
Timing. Burn rate. Investor benchmarks left unmet. It’s all quicksand, and without traction your chances at failing are much greater. Simply put, if you’re launching an app in a competitive B to B market you better bring your A game because an MVP isn’t going to cut it anymore.
Let’s take a step back for a minute. For a young start up, your focal business goal should be “leveraging power”. More than half of the product authors I meet are fresh out of B-school so this isn’t a new idea. Nonetheless, they say, “leveraging power. Ok. I want that; how do I get it?” You get leveraging power with traction. “And that?”. Stop. Sound market research and timing not withstanding, to gain traction in a competitive market your product needs to be polished. Simple concept. “To what degree?”, you ask. Well, is it at least marginally better than existing product substitutes? Yes? Well, then you won’t absolutely fail, but what about switching costs or acquiring new customers? Have you thought about that pain? How do you plan to address that? At the end of the day, customers don’t want more of the same. Even if that differentiation is perceived (not real or substantive, re: “elevated functional benefit”) you need to show them something new, or wait until you have something worth sharing.
To use my most recent product Groove™ as an example: if visitors came to Groove™ and it looked like shit compared to its competitors Assistly or Zendesk, we wouldn’t have a shot in hell at converting anyone. Customers would land, bounce, and migrate to a competing product. However, because we released a gorgeous web app, with rich features from the get-go, we were in the game, competing and gaining traction.
Much of this is frustration and rhetoric, but it stems from a real trend that is happening in the web software space today. I don’t have the answer for what comes next nor do I have a new packaged buzzword or acronym to offer, ie. “Design Thinking” or “Creative Quotient”, I really couldn’t care less, but I suggest that all start ups evaluate their positions and get their thinking caps on. My cold hard advice: MVP’s aren’t for competitive B to B web apps. It’s not OK to launch a shitty app like Guy Kawasaki suggests. We didn’t follow the MVP approach with Bantam Live, and we got bought by Constant Contact in less than 2 years time. If you’re working on a consumer play, or something totally new and outrageous, than sure, you have a little more freedom than most to launch a limited feature app to test the market; grow, and continuously develop around the needs of your customers. In our B to B space, all it takes is a bit of research to know what’s hot and what’s not. Don’t be lazy. If it takes you a bit more time and money, it’ll be worth it. Rule of thumb I learned from a colleague I’ve worked with in my past ventures, “if you’re not confident showing your Grandmother your web app, don’t launch it”.
