Lesson: Customer Development with Steve Blank

Step #9 Value: There is an art to building a minimum viable product

Now, for both physical and mobile channels, there's an art to building a minimum viable product. Just think about this. An MVP is not a minimal product. An MVP is not like, "Well, we only have three weeks so we cut off the feature-list here."

That's not what an MVP is. An MVP is based on interaction and iteration in understanding customer's needs and pains, and gains. If all you're doing is cutting off the feature-list then you clearly haven't run the process.

Sometimes we get, "But my customers really don't know what they want. I'm creating something so new getting out of the building is just a waste of time. If I show them my solution, they're not even going to know what planet I'm talking about." We're going to be talking about the problem of market-type in a subsequent lecture.

There's a case called the new market where, you're right, customers have never seen an iPhone before or never seen a new product before. In that case, you still want to get out of the building but instead of asking them about features you actually want to understand how are they spending their time now and what solutions are they using to solve their pains and gains?

We'll talk about market-type later but when you hear people say, "But my customers don't know what they want." Just park that for a while because that's not an excuse to stay in the building and keep adding features.

There's a couple of mistakes when you're thinking about value proposition. One is that what you're building might just be a feature of someone else's product. You might have a good feature extension but it might not be a business or it might be a business for about nine months until the incumbent just adds that in their next release.

As I said earlier, these prioritizations of pains and gains, sometimes helps you avoid the, "It's nice to have" problem. So sometimes, it's very easy for Founders to say, "Well, they all liked it." Well, okay. What you really want is, "They didn't like it, they have got to have it. In fact, they didn't let me leave until they, like, let me use the prototype." That's when you know you have a business.

It has to be something that people demand and there have to be enough of them to demand. You might find, "Yeah. I found the five people in the entire world that love the product." That might not be a large enough market.

Some of the questions you might want to be asking as you're outside the building now talking to customers is competition. Competition kind of exists outside the business model canvas. Think of the canvas now floating in a world where other peoples' business model canvases are floating as well.

So just kind of take a step back and go, "Well, who else is out there and what are they doing?" The next thing you want to be asking, again, outside the canvas, "Why is this problem so hard to solve?" Or, "Why is this service not being done by other people?"

It might be, that hopefully, you really do have an insight or break-through. Or it might be, you're hallucinating. So you really do need to keep asking that question, not only to yourself, go ask it to the people you're talking to. Ask them, "Has anybody done this?" If they go, "No, we've never it."

Ask them why, why do you think? You might get some insight like, "Oh. Yeah. There have been nine vendors in the last three and a half years who tried this and they all failed." Warning. You might want to investigate why that happened. Hopefully, you have a different approach or different insight than anybody else.

As we kept talking about earlier, market size. We're going to be talking about how to size the market at the end of this lecture.

You really do want to understand how big is this problem and is this what we want to spend our next couple of years doing? Then finally, as we said, how do you do it once you understand the customer needs?