Republished from TechCrunch
By BILL AULET
Yesterday, I was presenting at the MIT IMPACT conference in San Francisco about Disciplined Entrepreneurship, and after I gave an overview presentation, the questions started to flow. One thoughtful attendee who had not only listened carefully to the presentation but quickly scanned the poster and book jumped in with a great question. “I have looked at your material and while it seems useful, you don’t get to the MVP until Step 22 which is too late in my opinion. Don’t we need to build stuff and iterate quickly?”
This illustrates the point how the pendulum swings too far in entrepreneurship and we so often get wrapped up in the latest shiny new toy (or in this case idea/trend). The concept of an MVP, or MVBP to be more precise as I define it in my book Disciplined Entrepreneurship, is a good one but like with many individual ideas, can be taken too far to where it is actually destructive. We must understand the broader system and not get too infatuated with one new tool. What an entrepreneur needs is a toolbox of proven techniques as well as a broader systems mind set on how and when to use each tool in the toolbox.
Let’s take a closer look at the tool of an MVP/MVBP in this case.
Three fundamental concepts ingrained into the use the MVP are very solid:
- Getting Primary Market feedback is essential to the success of any product. Developing products in a vacuum of customer feedback is a very bad idea. Staring this customer feedback loop sooner rather than later is a very good thing.
- Scoping the problem down and reducing the variables to test is an excellent idea. Focus, focus, focus is crucial for entrepreneurs to increase their odds of success.
- Action is generally better than non-action (e.g., abstract analysis).
However there are a few problems an MVP/MVBP too soon:
- The “IKEA Effect”
- Without knowing who your customer is, how do you have the foggiest idea of what to build?
- There are other ways to achieve the same goal.
First let me discuss the one that is most often overlooked and possibly the most troublesome in that it changes the entrepreneurial product development process form inquiry to advocacy much too soon in the process. Daniel Ariely, now a Behavior Economist Professor at Duke University and formerly at MIT, has run tests which he describes in his book "Upside of Irrationality" how people who build furniture from kits at IKEA will value that furniture more than exactly the same furniture built by someone else. The point being is that people (myself included and even more so as a former engineer) have an attachment to something that we build as soon as we build it. The effect of this is that as soon as we build something, we almost automatically turn into advocacy mode. Being in advocacy mode too early in the process rather than inquiry mode means that we are less likely to build the product that best benefits the customer because we are listening less and more likely to build a product we think is great for them – and then try to shove it down their throat. As we will see below, there are other ways we can achieve customer feedback while minimizing the IKEA effect.
The second key point is that if you don’t know who your customer is, how can you design a good hypothesis to test? For instance, in one of my companies, we had a technology that was applicable to doctors, animators, seismic modelers, maintenance workers, designers, academics and more. For these potential customers, the MVP/MVBP would be dramatically different and it would be a very costly and time consuming way to get the knowledge we needed to proceed. This is true in all cases, even apps, but gets especially so when we get into hybrid innovation that involves more than software but also hardware, data, processes, positioning and the full spectrum of potential areas to create value and gain competitive advantage.
The good news is that we have identified and use a better way. As I pointed out to the questioner in San Francisco, in Step 7 we believe strongly in spending less time building and more time conceptualizing, after we have developed a thoughtful hypothesis on who our potential customer is, and building a brochure. This creates much less of the IKEA effect as people on the team are much less prone to drive stakes in the ground as far as what the solution should be when it is just a brochure that was made with much less invested to iterate with the customer.
This will then start the customer feedback loop in a much more focused manner while maintaining the incredibly important inquiry mind set as you analyze your options for moving forward and even deciding if the idea is viable. Almost always, the idea as you first envisioned it is not viable in total and you want identify the parts (or the whole) that is not viable and adjust. This process also helps you to quickly and efficiently more confidently and precisely identify who your customer is and why they need a new product and service, which will ultimately best drive your development process.
Product development is hard and very costly and small mistakes like doing an MVP/MVBP too soon can mean the difference between failure and success.
At the end of the day in San Francisco, I was sitting in a space near Union Square with David Bergeron of t3 Advisors as well as Cory Sistrunk and Ed Hall of Rapt Studio, a design and branding partners recounting the story and the question, and before I could finish my response, they fed back to me the same thing. “The MVP mentality has gone too far. It has been a concept that has unintentionally taken us away from “User Center Design” and a focus on the customer. We always talk about focusing on the “Why” as opposed to the “How” and “What” as Simon Sinek said so well in his famous Ted Talk. We have to focus on the WHY first.”
I couldn’t have said it much better myself, except I would add to the WHY, FOR WHOM before we start focusing on the HOW and WHAT.