I have watched many videos on Internet, particularly on YouTube, of small entrepreneurs talking about their experiences during the launch of MVPs in the market. During the presentations, I realized that at no time cautions was taken against the risks that could cause an MVP for a Startup Company.
A major contribution to the world of startups or should I say to the market in general is the concept called MVP (Minimum Viable Product) popularized by Eric Ries in his book The Lean Startup. The MVP is a way of expressing one or more ideas to potential customers spending the minimum of effort required to launch a product, so we can collect information about users experiences, learn from them and then make a decision.
The term "minimal of effort" means spending minimal time, hours of programming, technical and financial resources in building a solution without a certainty that it will have good user acceptance. In other words, to take a chance to launch something wrong at the first attempt is too large, the aim is to build the minimum necessary so that one can learn from the mistakes spending less possible resources.
Contrary that, many people think an MVP is not necessarily just a prototype containing the core functionality of a great product, it could be a video, a single Web page, a game in the mobile phone with basic functionality, etc., in which the goal is not only to answer technical or design questions, but to test the fundamental hypotheses of the business. Although the concept MVP makes perfect sense to launch a product, there are several risks related to its construction, according to Ries, which should be considered. Among them, the most important ones are: legal issues, building more than necessary, fears related to competitors and risks for brand, better explained below.
- Legal Issues: When an MVP is launched in the market, it could be considered as one of the worst risks to the company. Depending on the country or jurisdiction, after releasing an MVP, the company is required to register the patent for the product shortly thereafter. This is means to keep the competitors away, however, several times, it may inhibit innovation by enterprises. In such cases it is recommended that entrepreneurs seek legal advice in order to fully understand the risks and make the right decisions.
- To build more than necessary, entrepreneurs imagine, that customers can think that the product is imperfect because it is too small or limited, so they end up doing more than necessary, sometimes approaching the waterfall model of development.
- Fears related to competitors: this is the most common obstacle among entrepreneurs. But according to Ries, it is not so easy to have an idea stolen. Anyway he challenges the entrepreneur to call the manager of a large company, send an e-mail or a memo and tell about his idea. The truth is that managers are full of great ideas and very busy in their day to day prioritizing which runs first and will hardly listen give attention to the new entrepreneur.
- Brand risks: another fear of entrepreneurs of Startups as well as in large firms in the market is to launch an MVP and harm the brand image. For this, Ries presents a simple viable solution: launch the product under a different brand.
It is worth remembering that, not only one but several MVPs may be needed until the company achieves the ideal product for the customer. Thus, not only these, but probably many other obstacles may arise during the construction of an MVP. Another risk not mentioned in the book of Ries which I consider very important, is not to define the indicators to be measured correctly with the launch of the product, eg, the number of clicks in certain places, dormant time during the experiment by the user, etc. If this was not initially set correctly, the measurements will fail and consequently damaging learning and also the building process.
The construction process is known as the feedback loop (build-measure-learn), the entrepreneur builds a product, performs the measurement generating data, learn from them and generates new ideas for building a better product, and so on. During the cycle, totally different ideas may emerge, radically changing the type of product to be launched in the market.
To understand the concept well and the risks involved in an MVP which is a key factor for its success, besides, to realize that there are many behaviors among people from different regions, which can actually help in the strategy of the development and product launch. In comparing to manufacturing, it is as if the MVP was a single lot with a few ideas, which would be adjusted in the course of learning with feedbacks from real customers (those who really have an interest in using the product). The launch of a MVP is the initial phase of a long learning and, most likely, will face through many obstacles that must be considered during the whole building process of the product.
Bibliography
- Ries, Eric. The Lean Startup. (Portuguese version - Texto Editores Ltda., 2012).