"The biggest source of waste in a startup is building something that nobody wants." (Eric Ries)
Over the last few years, Eric Ries and other entrepreneurial thought leaders have popularized the idea of launching a minimum viable product (MVP). At its core, an MVP is a product with the smallest amount of features and polish that you can release while still making a few early customers happy.
For example, if you were building Instagram, your eventual goal might be an app that works on all of the major phone systems (Android, Apple iOS, Microsoft, BlackBerry, etc.), integrates with major sharing sites (Facebook, Twitter, Pinterest, Flickr, etc.), and offers dozens of cool filters. OMG, your app is going to be so totally awesome! It's also going to require a lot of engineers and a lot of time — and what if it turns out you and your team are the only ones who care about applying filters to photos? You don't want to waste time and money making something that nobody else is interested in, so you build an MVP: you create an iPhone app that offers one or two filters and lets users post their photos to Facebook. This is small step toward your long-term goal, but it lets you test the market and see if there are people who want what you're making. Releasing an MVP to test the viability of an idea makes a lot of sense: you can try something out quickly, and if customers don't care, you can shift your resources to a different idea. MVPs maximize your ability to learn in a short amount of time.
During my meetings with startup founders, I've noticed that while most of them believe in the usefulness of MVPs, many of them view the "minimum viable" concept as something that only applies to their initial product release. The truth is that the MVP approach can be applied to almost anything. There are plenty of business decisions where it's tempting to go all-in, but where a small test can prevent big headaches down the road. Here are some examples:
- Finding a co-founder. You can start a company with someone you think would be a good partner, or you can test your relationship with a small project first so that you know whether the person would be a good co-founder.
- Marketing. You can throw $5k/month at Google AdWords, or you can set small daily budgets for several ad networks to see which one works best. The latter approach will cost you a lot less and might show that AdWords is not effective for your purposes, or that there are better alternatives.
- Hiring. You can hire someone full-time, or can try them out on a short-term contracting project. If the person does well, then you can consider whether to make an offer.
- Funding. You can raise as much money as possible, or you can raise only what you need. Taking less cash now can make it easier to raise more money later.
- New features. You can go into hiding for 3 months as you spend 80-hour weeks implementing a new super-cool buzzword-compliant hyper-local gamified social network for your book review website, or you can spend a day adding Facebook integration to see if anyone actually comes to your site to make friends, or if people just want to check out book ratings and leave.
In fact, you can use the MVP approach in many non-work situations: you can buy a car based on its good reviews and a 3-minute test drive, or you can try to rent a similar model for a week and see if you still like it; you can sign-up for an 8-week salsa class, or go to Beginner Night at the local dance club; you can plan a 6-hour first date or start with a brief coffee meeting to see if you click; you can buy the 41-disc boxed set of House, or you can pay a few bucks to watch the first three episodes on Amazon to find out if medical shows appeal to you; you can invest 100% of your money in the stock market, or you can start with 5% and see if you can handle the ups and downs; and so on. When something requires a big commitment — whether that commitment is time, money, or another resource — it's prudent to spend some effort to decide whether the commitment is warranted.