Why Kickstarter for Tesla and us?
In 2011 Eric Ries published the first book on the lean startup method. Since then, this method has grown to become well-known in the startup community and, more recently, expanded to established corporations. On its core, it provides a framework to minimize waste in startups by adopting business-driven experimentation, constant iteration and learning validation through metrics. One of its central concepts is the Minimum Viable Product (MVP), which in a startup context, defines the minimum set of product features required to become a profitable business.
While the MVP concept is widely used, there is less agreement on the “right” process to define it.
Some people (myself included), have looked back at the lean methodology and embraced the concept of continuous iterations to help shape its final form. In practice, this process looks like a series of exercises to validate the business viability of a product. For instance, one approach can use ethnographic research or surveys to understand the likelihood of a set of people having a particular need that your product could be used to address. Among many others, another approach is to use quick hand-drawn sketches of your product to demonstrate some of the capabilities and collect early feedback.
These approaches are great to help shape a MVP, but they won’t validate that the MVP in question results in a viable business.
To validate an MVP, the best advice startup experts recommend, is to find those who are willing to share their hard earned income for your cause. Your potential customers might be nice to you while responding your survey and claim that they would pay the price of your product; however, once you actually request financial support, it’s not uncommon to be faced with a completely different perspective.
Therefore, in order to validate a MVP, one needs to find a set of customers that do provide financial support and stay profitable during these transactions.
One can argue that it’s not possible to be profitable at this stage, or to find customers willing to support a minimalistic product. Fortunately, several thousand counter examples are available on crowdfunding platforms like Kickstarter.
Kickstarter supporters are willing to pay a premium or tolerate some pain (ship delays, unpolished functionality, etc.) to make the projects they really believe in, a reality. They are the ones that will make your vision to change the world happen and therefore, Kickstarter backers effectively shape the future of world (or at least the tech world).
The value of crowd-funding extends far beyond sites like Kickstarter, Indiegogo, GoFundMe or Teespring. It is, in fact, a solid business strategy that some of the most remarkable companies have followed. Tesla Motors, for instance, sold the Tesla Roadster several months before they were produced, customers experienced significant production delays and unpolished functionality at launch. Among others, George Clooney, experienced firsthand rough edges on the very early models.
“But I’m telling you, I’ve been on the side of the road a while in that (Tesla Roadster) thing. And I said to them, ‘Look, guys, why am I always stuck on the side of the f**king road? Make it work, one way or another.” — George Clooney
To this date, Tesla Motors maintains a production backlog, a huge crowd of hardcore fans that will keep backing their cause and a highly-polished product that even George Clooney would be happy to drive.
We are building a consumer product that we are launching on Kickstarter. Like Tesla, we believe that crowdfunding is not just fun and trendy, but a fundamental part in our strategy to succeed. For updates you can follow our progress at pixsso.com.
