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Business Idea to MVP

by | Aug 9, 2022 | Fincubator | 0 comments

Great, you have a business idea! It’s surely going to be the greatest thing since sliced bread. But what comes next? How do you present your idea to investors and customers? This module will help you understand how to bring your idea to life and prepare a minimum viable product (MVP).

We have compiled some helpful information from around the web to help you take your vision from idea to MVP.

What is a MVP?

The acronym MVP stands for Minimum Viable Product. Frank Robinson first introduced the concept in 2001 before Eric Ries later popularized it.

According to Eric Ries, “the minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.

Here is a video of Eric Reis himself discussing the concept of building an MVP:

In a nutshell, building an MVP means you create the most basic version of your startup idea as quickly as possible. This way, you can test your assumptions and optimize your idea for product/market fit based on user feedback from your early adopters.

Benefits of Building an MVP

Entrepreneurs can expect several benefits when they build a startup MVP to test their product idea. Outlined below are the three top benefits of MVP development.

Benefit #1: Low Risk With Very High ROI

One of the benefits of building MVPs is that they are often low-risk. However, the results could be exponential. Companies like Uber and Dropbox grew their companies into what they are today by creating MVPs to test their ideas. Take a cue from this: release an MVP and only add features your users request.

Benefit #2: An MVP Saves You Time and Money

The time and money you would have otherwise spent on product development and marketing can be saved and reinvested into customer development. This ensures you come out with a better product, thus increasing your chances of success.

Ana Santos learned this the hard way when she launched Onepagetrip. Designed to help travelers plan and share travel itineraries, the app had a lot of time and energy poured into it. Unfortunately, that time and energy went into something that hadn’t been market-tested and, as a result, lost her time and money.

Benefit #3: Opportunity to Acquire “Early Adopter” Customers

For your MVP to pick up steam, you will need to target the right people. As the image below illustrates, the early adopters (or influencers) are the ones who you should target with your MVP. These people will most likely be passionate about your product and be more likely to provide feedback and promote to others within the niche.

(Content credit: Originally published on Failory)

Five Ways to Validate Your Startup Idea

(This section was written by our very own Chummy Fin Club founder Matthew Bell)

A friend once said to me, “dude, I have an idea for a billion dollar website!” I’ve heard this type of thing many times before, but I entertained him, “oh yeah? What is it?” I asked. His enthusiasm growing, “it’s a professional social network for small business owners.” Puzzled, I responded, “that sounds a little bit like LinkedIn.” He said, “it’s exactly like LinkedIn, except my idea is specifically for small businesses instead!”

I didn’t want to crush his hopes and dreams, so I entertained the conversation with some back and forth chit chat. The truth is, I didn’t think it was a great idea. It might have been something that he could have executed on and built a niche network with, but it just didn’t seem like he was trying to solve a problem that LinkedIn wasn’t already solving. Anyone who is already interested in professional networking uses LinkedIn, even small business owners.

Back in 2015 I launched a mobile app of my own. Before my team and I launched it, we took a considerable amount time to make sure we were building something that people were actually going to use. Our pre-launch research efforts paid off big time and we were able to avoid some key mistakes by validating our idea first, which helped to ensure we headed in the right direction from the beginning.

A good exercise, for any entrepreneur or wannabe entrepreneur, is to validate your idea before getting started. It’s super important to the success of your venture to ensure you are building something that people actually want and will use.

Here are five questions to help you validate your idea:

1. What problem are you solving?

Successful products solve problems – plain and simple. Most successful entrepreneurs take a problem/solution approach to their startup brainstorming. You can do this by first identifying a problem and then building something that is a solution to that problem. If you can solve someone’s pain through your product then that product adds value to the user’s life and he or she will continue to use it and even pay you for it.

A great example of a startup that solved a problem is Uber. I used to live in New York City. I can tell you firsthand that before Uber came along it was a very painful experience trying to catch a cab on the streets of NYC. You would stand on the corner next to half a dozen other people, who are all competing for the same cab, with your hand raised in the air trying to identify if the cab whizzing down Broadway is actually available. You’d wave your hand frantically, only to discover that the taxi already had passengers and it would whizz right by you. You’d repeat this process until you were able to flag down an available cab. This could be a 20-30 minute process during rush hour.

Uber launched and solved that problem instantly. Now you can push a button and your Uber driver arrives within minutes. Problem solved. Pain killed. And now Uber is a public company valued at over $60 billion dollars.

2. Would you use it?

One of the greatest litmus tests for validating your idea is to honestly ask yourself if the thing you are building is something you would personally use. It is important to build something that you would use personally. If you don’t understand the end user or the market well, it is going to be a more challenging road to building a successful product and business. If your expertise is in consumer products and you are trying to build the next great biotech company, you might want to rethink that. Anything is possible, so don’t let me stop you if you want to go after a totally new space than you are used to, but your path to success will be less bumpy if you stick to what you know.

3. Would other people use it?

You’ve identified you are solving a problem. Check! And you are building something that you yourself would use. Check! But, will other people use it? That’s your next big question to answer.

This question is actually a simple one to answer. Build a simple online survey and send it out to your family and friends. You can even use Google Forms for this. Write out a set of generic questions designed to uncover the pains and problems your product will solve. It is important to make sure that other people view these issues as pains and problems too. Make it anonymous so your friends and family feel comfortable answering honestly.

4. Does your idea already exist?

You may have an awesome idea. It may solve big problems. Users may love it. But, did someone else already create it exactly like you were planning on doing it? If your great idea already exists in the same way you planned it, that doesn’t necessarily mean you won’t be successful. It does mean your market exists and there is a demand for your product.

If you do feel passionate and motivated to forge ahead, amidst a competitive landscape, your next objective should be to figure out a way to differentiate and position your product as the best solution in the marketplace and why it is different and better than the other options.

5. What is the size of the total addressable market?

Total Addressable Market (TAM), is the indication of how much revenue opportunity there is for a product, or what the overall universe for the business opportunity is. If you could capture 100% of the available market for your product or service, what would your annual revenue be? That’s another way to look at it.

Let’s assume a real world example by looking at the pet industry. If you are building a mobile app for pet owners who want a way to find other pet owners with the same dog breed in their neighborhood for the purposes of scheduling doggy play dates, that’s going to be a niche product and small TAM. The pet owner has to have a dog, has to have a smart phone to run your app, and has to be interested in doggy play dates. But if you are creating a mobile app that connects pet owners to virtual veterinary services, for instance, then your TAM is every pet owner in the world with a smartphone. Now, that’s a much bigger TAM.

How To Build Product As A Small Startup

In this video, Y Combinator CEO and Partner Michael Seibel shares a process for building product as a small startup.

Jump to Sections:
00:00 – Have a process to get product out the door
1:02 – Decide on a release schedule
1:15 – Put someone in charge of product
1:34 – Establish KPIs
1:47 – Create a theme for the product cycle based on a KPI
2:00 – Product meeting
2:30 – Brainstorm new features, bugs, and tests
3:35 – Sort each into: easy, medium, or hard
4:59 – Pick the hards first
5:30 – Spec the ideas out and assign tasks
6:00 – Shut up and get to work
7:00 – Testing

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