Why Digital Products Fail and How Concierge MVPs Prevent It
The right approach to measure product/service faster
Due to the widespread development of digital products, it’s common for business owners to feel the need to create digital products quickly, like apps or websites.
However, this rush often happens without fully understanding the market, which can lead to challenges. I wanted to show you how we navigate this dilemma effectively, but first of all..
Why Do Digital Products Tend to Fail?
Digital products can fail for many reasons, let’s breakdown to understand them better
Market Uncertainty: Startups frequently lack a clear understanding of their market. Without adequate market research, they develop products that don’t align with customer needs, leading to poor adoption and failure.
The “Just Do It” Approach: Reacting against traditional management, some entrepreneurs adopt a chaotic, unstructured approach, believing that any management is counterproductive. This often results in disorganized efforts and wasted resources.
Failure to Validate Assumptions: Many startups skip the crucial step of validating their core assumptions about the market and customer needs. This oversight can lead to developing products that miss the mark entirely.
Ignoring Lean Principles: Lean principles emphasize iterative development and customer feedback. Startups that ignore these principles often end up with products that do not fit the market, as they haven’t been refined through cycles of feedback and adjustment.
Perhaps there’s a lot to be done before we can get the ‘green light’ to develop our products, sometimes making digital products feel very unstructured and chaotic. The development process takes a long time, but there’s also a solution to simplify things up.
Concierge MVP
One effective strategy to address these issues is the Concierge MVP (Minimum Viable Product). This approach involves providing a high-touch, manual service to a small group of customers to test and validate the product idea.
By interacting directly with customers, startups can gather detailed feedback and better understand their needs. Here, the Concierge MVP is positioned in the middle ground between the ‘just do it’ unstructured and chaotic approach and the ‘long process’ approach. Thus, it can become a win-win strategy.
From Direct Customer Interaction to Digital Products
For example, in 2011, Manuel Rosso, CEO of Food on the Table, started his business by personally meeting with his first customer, manually selecting recipes, and creating grocery lists based on their preferences.
This hands-on approach allowed him and his team to deeply understand customer needs and iteratively refine their service. Initially, they supported only one grocery store and developed no software, focusing entirely on learning from direct customer interactions.
Through this method, they validated their business model and gradually introduced automation after understanding customer needs and ensuring demand. This lean approach minimized waste and ensured that product development was aligned with real customer needs, ultimately leading to a scalable service.
How to start validating product/concept with Concierge MVP
Imagine your company is developing a product for booking auto repairs in a specific area. Instead of immediately building a complex Hi-Fi design, developing a backend system, or conducting long workshops, you could test the business concept directly. Use simple tools like WhatsApp for Business to interact with potential customers and gather rapid feedback from them.
Or, if you are from the Banking or Financing sector, you could easily use your Sales Team or Relationship Manager to test your business or product ideas.
The digital platform or app is just a “middleman” for the service you’re offering, so focus on testing the concept or value proposition, instead of being obsessed with a platform that your team aspires to build.
Learn First, Code Last
To create a Concierge MVP, start by focusing on the core value of your product. Identify the key problem your product solves and the primary benefit it offers to customers. Prepare the basics: instead of building a full product, use simple tools like spreadsheets, email, or messaging apps to deliver your service manually.
Engage directly with a small group of customers, gather detailed feedback, and refine your value proposition based on their needs and responses. This hands-on approach allows you to validate your concept quickly and efficiently without significant upfront investment in technology.
When to Use a Concierge MVP?
Early Idea Validation: Test if your value proposition resonates with customers before building a full-scale product.
High Customer Interaction: Ideal for services needing personalization and detailed customer feedback.
New Market Exploration: Gain insights into uncharted or uncertain markets without heavy investment.
Complex Services: Validate different components of a complex service through direct interaction.
Resource Constraints: Useful when you have a limited budget and time, allowing for quick learning and iteration.
When Not to Use a Concierge MVP?
Highly Integrated Systems: Impractical for services relying heavily on system integrations and complex automation.
Immediate Scalability: Not suitable if your business model requires rapid scaling and a large user base.
Low Customer Interaction: Ineffective for products that are mainly automated or self-service.
Regulatory Constraints: Challenging in industries with strict regulatory requirements and data security concerns.
Established Markets: Less useful in markets with well-understood customer needs and strong existing competition.
Conclusion
The best MVP approach depends on three key factors: the nature of your product, your target market, and the specific validation you seek. Each MVP method has its strengths, so consider these factors carefully to choose the best one for your product.
With the combination of early-stage user research, Concierge MVP may become an alternative to validate your Digital product idea from users as early as possible.
