I liked one question in particular, because it concerns something I’ve been thinking about recently.  Erin Turner asked about landing pages as Minimum Viable Products (@23:05 in video).  I didn’t opine, though I would have enjoyed challenging my friend David Binetti with an alternative take, and since the subject is covered in my new book, The Entrepreneur’s Guide to Customer Development, I missed an opportunity for shameless self-promotion.   One that I will now partially remedy.  ; )

I’m not sure where it all got started (I want to say The Four Hour Work Week), but for those that don’t know, there’s a “school of thought” around testing product viability by:

• Building a landing page
• Including a clear “call to action”
• Buying AdWords at $5/day

Then sitting back and watching your hypothesis proved or disproved.   Clearly, the approach has appeal: it’s fast, low cost and easy to measure.

There are pitfalls:

• Are your prospects searching for a solution (otherwise, PPC fails)?
• Are there any keyword phrases that will generate enough traffic at $5/day (I don’t think so)?
• Are you taking the time to optimize the landing page and messaging? (If so, for whom?  The whole wide world?)

As I discuss in the book, multiple MVPs can be designed to take you down your “Value Path”, where a value path is a series of “phase gates” that test key elements of your business model to mitigate risk.  As Andrew Chen says, “Test the riskiest thing first.”

There’s been quite a bit of discussion on LSC and elsewhere about the need for a “real” MVP to include the payment of money for use of the product.  Only in this way, can true “viability” be tested.  Generally, I agree with this.  But as Andrew points out, some businesses need to test something other than viability, where viability means financial viability. My approach is a bit different, but gets us to a similar place and allows for “intermediate MVPs”.

In my view, viability is defined by the tester.  In other words, a Minimum Viable Product is “A product with the fewest number of features needed to achieve a specific objective, and users are willing to “pay” in some form of a scarce resource.”

So for example, the intermediate MVP for a landing page might be defined as the minimum features required to achieve the objective of “demonstrating market interest”, via the currency of “clicking on the more info” button.  Now you might argue that you risk losing all meaningfulness of terms if you define it too loosely and I would agree that there is that risk.  But like many things in life, the true measure is in how you apply Lean Startup and Customer Development principles.   In the case of a landing page MVP, you might learn that there is some interest after all, but it will be difficult to prove the negative.

The definition works to measure “desirability” based business models, too:  “what are the minimal required features to (objective) scale users to xM/month, who are willing to (currency) “pay attention,” as measured by some individual usage metric.  An intermediate MVP for a hardware product might test a technical hurdle (e.g., audio latency on the iPhone) or market interest (objective: demo requests; currency: LOI or beta sign-up).

The art of entrepreneurial discipline is in defining objectives and currency.  Your goal is to test as early as possible, make or break decisions.  In other words, “if this doesn’t work, we need to pivot.”  Further, you should define your “final MVP” (how you will actually monetize your features/users/technology), before figuring out your intermediate MVPs.  Finally, time and money may be important variables when considering your MVP strategy.

As Rich Collins pointed out to me after the conference, if it takes nearly as long to develop an intermediate MVP as the ultimate version, why not build the latter?

Appreciate any thoughts you have on MVPs.

The basic point, is that while all companies employ technology, sell products or services, employ technology, market to specific segments and use certain distribution methods, one factor dominates (or should dominate) the others in terms of business strategy.

one component of the business is the driving force of the strategy — the company’s so-called DNA.  This driving force, in turn, greatly determines the array of products, customers, industry segments, and geographic markets that management chooses to emphasize more or emphasize less

Here is a subset of  driving forces Robert discusses:

Product

Company pursues a strategy based on a single product and its off-shoots.  All future products are some derivative of the core product.  Examples include Coca-Cola, most automobile manufacturers, Zappos.

Market Type and User Class

Company identifies a specific marketplace to target.   American Hospital Supply supplies hospitals with whatever they need.  User Class refers to a specific set of users.  Johnson & Johnson, for example, makes hundreds of highly differentiated products that serve doctors, nurses and patients.  Cisco’s driving force is building products for network professionals.

Technology

Company looks for opportunities to apply its technology.  Dupont, 3M, and Intel are good examples.

Means of Production

Profits determined primarily by availability (uptime) of its differentiated or highly-efficient production capabilities.  Examples include Steel, Oil refineries, printing.

Sales or Marketing

Company’s method of sales or marketing is unique or stands out compared to others who sell similar products.  For example, catalog companies, door-to-door, MLM, Amazon.

Distribution

Company has unique or differentiated method of moving products.  New products will follow same distribution.  Examples include FedEx, Warehouse stores, phone companies.

Natural Resources

Company’s purpose is to extract and productize oil, timber, etc.  Examples: oil and mining companies.

A company’s driving force may change over time, but usually as a “pivot.”  In other words, if the company runs out of growth opportunities or faces extinction, changing the driving force may be necessary.  Though companies have one driving force, other forces still come into play.  The one driving force, however, determines the strategic decisions.  Having multiple driving forces causes a lack of focus and confuses product choices and marketing plans.

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With respect to Chen’s descriptions then, a “Business-focused product perspective” might be a Product driven company; an “Engineering-focused product perspective” might be a Technology-driven company; and a “Design-focused product perspective” might be a User Class-driven company. Presuming for a moment that all of these businesses want to make some amount of money, looking at the company’s strategic driving force can perhaps help focus the best product perspective for that particular business. The “encroachment” of business or engineering on design is (theoretically) dependent on the driving force, rather than personal bias.

With respect to “Minimum x Product,” where x = “Viable” or “Desirable” or whatever else, x should be dependent on (1) your “objective” and (2) your driving force.   In other words, if you’re objective is to determine whether prospects will pay for a product, you need to build enough product in such a way that your potential customer will buy. If your driving force is a User Type that demands a certain level of usability and aesthetics, your product must minimally reach that level to test your objective.