Month 3: Building an MVP and getting to know the BIG elephant in the room!


4 month challenge - launch your startup in 4 months with FES Agency! Over the course of 4 months we will share with you tools and tips to launch your business! Are you ready to take the leap?

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And we are back! And this week, we will be talking about products for the first time!! 

Let’s first make sure you understand what an MVP or a Minimal Value Product is. Accordingly to Steve Blank, “an MVP is not the product with fewer features. Rather, it is the simplest thing that you can show to customers to get the most learning at that point in time”.

 

We can say that there are two kinds of MVP’s. 

  1. The classic Validating MVP is selling an idea. You approach people you think should be customers and try to sell them a product you haven’t built yet. A great example is Buffer. In a couple of weeks, and by only building landing pages, they were able to understand if they were working on an idea that potential customers wanted. Check this article explaining all processes.
  2. The second is the “concierge MVP” approach. You create a better product at an unsustainably high cost by personalizing it for every customer. If you cannot get people to pay a realistic long-term price for a better product, it’s time to move on. 

Early in a startup, an MVP can be a PowerPoint slide, wireframe, clay model, sample data set, etc. Each time you build an MVP, you also define what you are trying to test/measure. Later, as more is learned, the MVPs go from low fidelity to higher fidelity, but the goal continues to be to maximize learning, not to build a beta/fully featured prototype of the product.

The  Build Measure Learn methodology lets startups be fast, agile, and efficient. At this point, you should be continuously building improved versions of your MVP with feedback from your potential users. And remember, as Reid Hoffman, the founder of LinkedIn, says: 

“If you are not embarrassed by the first version of your product, you’ve launched too late.”

 

First weekly task: No more videos to watch! It’s time to build and validate your MVP. You can start by building a landing page. Use a service like Launch Rock to set up your landing page, or go a step further and build a real MVP.

Time to talk about the BIG elephant in the room!

What the heck is the BIG elephant in the room?! The answer: Product/Market Fit. This is the holy grail for early-stage startups. When you achieve product/market fit, you have a product that your customers really want to use. Until then, you should test and iterate your business model and product.

A common mistake that first-time entrepreneurs make is to focus on acquiring more and more new users through paid campaigns (Facebook or Google ads) before achieving Product/Market Fit. You first need to develop a product that your users want and like to use, so you need to focus on retention. Retention is a major key!!

 

 

Dave McClure, the founder of 500 startups, created the AARRR Methodology – Metrics for Pirates! In it, he created a funnel:

  • Acquisition: users come to the site from various channels
  • Activation: users enjoy 1st visit: “happy” experience
  • Retention: users come back, visit the site multiple times
  • Referral: users like the product enough to refer others
  • Revenue: users conduct some monetization behavior (customers!)

If you are spending money to acquire new customers without making sure you have a high retention rate, you are just wasting money!

It’s great to tell our friends or investors that we are acquiring many new users daily! However, that’s just a vanity metric! You should focus on increasing your monthly active users! That’s the thing!!

 

Weekly task: Keep on iterating your Minimal Viable Product! Keep on talking with potential customers, try to onboard some of them, and see if you can start making money! 

Nothing is impossible!!!

Many tasks and not much time! Let’s start working right away!

See you next month!

 

Month 2: Interviews and recap

4 month challenge - launch your startup in 4 months with FES Agency! Over the course of 4 months we will share with you tools and tips to launch your business! Are you ready to take the leap?

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