An Early-Stage Business Idea is like a Mirage, Changing all the Time!
Investors realize the futility of chasing a mirage, so it’s important for entrepreneurs to build a minimum viable product (MVP) before a capital raise.
More often co-founders in their obsessive pursuit of a world beating product and unicorn dreams, misunderstand that an MVP should be packed with features rather than, as stated, a minimum viable product.
All these product features may or may not be valuable to the market but certainly increase the complexity and reduce the user experience, quality, not to mention the time and cost overruns.
Let’s look at some of the critical advantages of an MVP:
Team Cohesiveness and Role Clarity
A successful business starts with a good cohesive team. While building an MVP, the co-founders not only establish the boundaries of the product/service, they’re also able to understand and define their roles.
The team interactions leading to the MVP will not only round off the rough edges in the team, but also highlight the business acumen. An MVP, again, by its very name will force the team to prioritize viability over everything else.
Establish the Boundaries
- Technological – An MVP highlights the technological limitations in the concept including the skill set available in the team. This also brings out the unnecessary clutter that can be pruned to achieve cost reductions, better performance, and improved user experience.
- Legal – It’s important for the co-founders to understand the legal standing of their startup. Many ventures have fallen apart due to legal implications for example Napster – an idea so brilliant that it spawned the sharing economy but was litigated to bankruptcy.
- Markets – It’s important for the co-founders to be able to place their products in the right market. In other words, the viable markets should be addressed, and the addressable markets should be reasonably estimated.
Idea | Value Proposition Validation
Businesses are built on value exchange and not on engineering marvels.
An MVP is the primary test-of-acceptance by the market for the value propositions. Here it’s important for the co-founders (and their Startup Incubator Sydney) to not only know who the customer is but also how they behave. This is even more crucial in the case of B2B startups where buyer, user and beneficiary are three distinct entities, each having different objectives.
“Plans are nothing, planning is everything” Eisenhower.
A business plan that is developed on assumptions and based on excel sheets is nothing but a leap-of-faith. Sound business plans emerge from the data generated by the MVP approach. If the co-founders have an MVP, limited user trials and test marketing can yield data that’s of immense value for business planning and scale up strategies, then the MVP offers proof-of-concept that investors can experience.
And, the co-founders can sell!
Needs and Resource Assessment
Co-founders can clearly lay out their ‘ask’ and convincingly address the questions to successfully raise capital. This approach not only offers a clear option for the investors but also gives the co-founders the necessary leverage to resist undue equity dilution (case in point ATLASSIAN).
Startup Incubator Sydney
An MVP is not the silver bullet that slays the dragon!
It is an important step in the right direction where the software development and modular build must be completed by, for example, the right Startup Incubator Sydney.
Finally, another important thing to keep in mind, is to be fast and dispassionate in assessing your MVP. In many cases, while co-founders persist, a sharp and better equipped competitor senses the chinks in the armour and rushes in with a better and improved product.
For more information on AppCurate email us firstname.lastname@example.org and let’s together get on a Faster Path to Commercialisation.