Creating an “MVP”, from 0 to 1 without bullshit
🇪🇸 First. Do you want to read this article in Spanish? Check it here.
Stop. Before you read this article, go to Google and search for “How to make an MVP,” look at the results, browse around a bit, and answer this question.
How do you start making an MVP?
If the answer is Yes… Fantastic! Crack! Master! Boss! If your answer is No… Keep reading.
After over 10 years in digital product creation and startups, here are my thoughts. You may not agree with everything, but I share what I wish I had known when starting. You can read more in my previous article on MVP vs. MAP if you’re interested. This article is lengthy, so be prepared with a cup of coffee.
Disclaimer: After more than 10 years of creating digital products and launching startups, this is my thoughts. You may agree or disagree, but I share what I wish I had known when starting. I hope these insights are helpful in your entrepreneurial venture.
Let’s analyze some of these first results we find when searching for “create MVP” in Google.
When reading these articles, I get the impression that they are focused on SEO and written by people who have yet to gain experience in business, companies, or startups (and if I’m wrong, I apologize in advance). They are based on old precedents that are no longer as relevant today.
Mind you, I’m not saying the approach is wrong, I’m saying:
Our world has changed, and the needs/standards have also changed. The education/training on startups and entrepreneurship must change as well.
Let’s take another example: What do you think of this image (widely known by millions of articles, trainers, and schools worldwide)?
Is this approach currently correct? My answer is clear… it depends.
MAP article, digital standards have evolved a lot, and depending on the sector where you want to enter (and its competition), your MVP can be a scooter… or, unfortunately, you will have to go to the car.
At the time, I represented it with this graph:
So we are trying to create something where there is intense competition and standards (or what users consider standards), and if you still need to reach that level… you are going to launch your MVP dead.
Let’s take a practical example:
Having clear the playing field on which we play, I will explain (step by step) how I see the creation of a product/service/company in the digital age.
I will also comment that, for this article, you have already detected a problem, minimally analyzed the market, and created a very cool ‘Business Model Canvas,’ all those things you do once… and rarely revisit.
I’m very visual, so I’ll explain everything graphically as much as possible. Imagine that everything is a set of boxes (or ‘canvas,’ if you prefer); the key is knowing what to place in each box. That’s how this game is played.
Let’s put an actual use case. That will help us put ourselves in situations in much of the article.
“I have several businesses, and I need an application to manage the accounting of all of them in a group way.”
1. Are we a solution or a commodity?
We must first ask ourselves whether we are a solution (and, therefore, a problem to be solved) or a commodity (where there is no problem per se, but it makes life easier). It is CRUCIAL to understand this; unfortunately, we often believe our own ‘lies’ in this step.
What we consider a crucial problem, often shaped by our situation, location, or education, may be insignificant to others. Some people share different difficulties.
So that’s the big question — what am I?
There can be more categories, but we are discussing launching and selling products. Forgive me for saying so. If you’re not making money, you’re not making a business.
The size of the problem you face defines the scale of your success: the most significant challenges create the most revolutionary (and money-making) solutions.
In our case, we are one solution. I only have time to manage some of my business accounts simultaneously, create invoices for each, etc.
A different question is how many people have the same problem and how many are willing to pay to solve it. We’ll talk about that a little later.
2. Divide the problem
There is a well-known phrase in engineering: ‘divide and conquer.’ I firmly believe the same is true in business. If we try to solve the ‘big problem,’ it will cost us a lot, both in time and money. The important thing is to divide that problem and divide it well.
As I mentioned, if we try to do everything at once, it will be practically impossible to solve, or we will be overwhelmed. In this phase of product and technology creation, if any, it is crucial to count on the engineering team. Please include them in the process.
Once we have detected the reality of the problem, we realize that it is not just one problem but MANY problems to solve. Now, we will enter the wonderful world of analyzing and starting to execute that solution.
3. Analyze and assess the competition.
At this point of the article, you are probably thinking, ‘Wow, how much work?’ and you are right; nobody is going to give you anything for free, so the sooner you assume it, the better.
We’ve already identified N minor problems to solve in our hypothesis; now it’s time to analyze what to tackle first and why.
The big question is:
How far does my MVP go? Where do I cut? Those answers will be given to us by our competitors.
We need to look for competitors trying to solve the same problem as us (or something similar). Suppose you’re trying to do something without any competition. In that case, there are two possibilities: either you’re a visionary (which is a possible 🚩 since people might not perceive that problem yet), or it’s not a core problem (another 🚩 since we might be working on something people don’t want).
Many companies find their comfort zone by positioning themselves as alternatives to the big competitors: offering cheaper, easier, or accessible solutions (and that’s fine; it’s a valid strategy).
On the other hand, some companies challenge the giants in their sector directly, trying to outdo them. Here’s a spoiler: this confrontation often ends badly. The key is recognizing our strengths and differentiating ourselves intelligently rather than engaging in a head-on fight with little chance of success.
And sorry if I discourage you, but this applies to 99% of cases. Although there are exceptions where a risk-taker succeeds and triumphs, this is different from the norm (although these cases usually have a lot of visibility in the media and can generate a false impression of success).
If you have no competition, ask yourself why.
In the case we are presenting, let’s consider that our competitor is Holded, an accounting ERP that could well solve this problem.
Having found this competitor (or plural, competitors), we must ask ourselves some questions.
- Do they solve the whole problem?
- Do they solve the problem well?
- Could I do better (with the resources I have)?
- Could I be more competitive at _____ (price, support, ease…)?
Congratulations if you have it clear after asking these questions and still decide to jump into the pool! You have more guts than 99% of the people, which is worthy of recognition. But remember, you’re still at the beginning of the journey.
As I explained in the previous graph, you must assess whether you can compete against that competitor with your available resources. You may offer the same value proposition but must provide something different that adds value.
Disclaimer: You can also do precisely the same as your competitor. However, this only works if you have a much better branding strategy than they do or the competition has yet to enter the country where you plan to start your business.
4. Executing the plan
Now that we know what we are up against, we can start analyzing the bare minimum we need to go out into the boxing ring and fight that competition. So what should we do?
- Call out on the street and survey as many people as possible to validate your hypothesis. But be careful: because 10 people respond to you, and 6 of them are your friends, you still need to validate an idea effectively.
- Look for information about your competition. You will likely find articles and public data on the net. By typing ‘{competitor name} .pdf’ into Google, consider what you can discover. I’ve even found investment presentations using this technique; much valuable data shows up there.
- Analyze your competitor’s product in detail. And yes, that includes testing, using, and even paying for the product. Remember that if it is a product with traction and sales, they have already made more progress than you, so don’t underestimate it. They’ve invested more time, people, and money in developing it — take advantage of that! Don’t reinvent the wheel; instead, focus on making the wheel better or more attractive.
Armed with all this information, we’ll get a much more accurate approximation of what our MVP will be and surprise…it probably will be a more complex scooter.
Now, we are realizing what a mess we are getting into. We have two options:
- Fake it until you make it.
- Make it to compete.
5. Select the execution mode
So now that we have the context of the battle we are facing, we have to consider the option of creating the product or creating a “mirage of the product”; each has its virtues and problems.
I always recommend the former unless you have previous experience. You will save yourself a lot of trouble.
Fake it until you make it.
For this option, the quickest strategy involves creating a landing page with an attractive design. This is where UI, UX, product, and branding designers come into play. The key is to present a competitive proposition against our rivals visually.
If we intend to compete against Holded, it has to look at least as good at the design level, work well, solve the problem quickly, etc.
Having it clear, what would be the steps?
- We set up a landing page. The ideal (for speed) is to use services like Framer or Webflow, which allow us to create a website quickly. What’s more, buy a template available on their platform. Do not complicate yourself; it will surely be more beautiful than you imagine.
- We register with any payment service, such as Stripe or GoCardLess, to be able to receive payments. Within the page we have created, we put a button linking to this payment page. You can also add buttons to ‘Schedule demo.’
- Create a primary advertising campaign (Google, Instagram, etc.) with ads focused on the sale. Yes, invest money in validating; it’s better to lose $1,000 now than spend $100,000 to create something no one needs or wants.
- Look at attraction; it may not fully translate into sales, but you will be able to measure interest; how many people have requested a demo or contacted you? Leverage this information to gain insight. Also, communicate with those customers who have paid or shown interest and learn from their experience. Understanding why they have decided to pay for your product or service is crucial.
- If you are in the validation phase, be a good person and give money back to all of them; it is better to have them as allies, and you will surely be able to talk to them again.
- Write down all the learnings. Documenting all this is critical; believe me, you will thank yourself in the future.
If in step 4 you need more traction, iterate. Do this as often as you feel necessary or are confident in the problem. Suppose, after several iterations, there are no conversions. In that case, the advertising could be better targeted, the website could be more suitable, or simply that no one is interested in that problem.
Note: It is essential to remember that not all models, products, or services can be validated this way.
If you have “validated” and generated a minimum of traction, congratulations! You have an MVP. Now, the challenge is actually to build it.
This model has the advantage of being more agile initially. Still, you must build the product thoroughly and may need more time to market.
Make it to compete.
If we want to get into developing the whole product (remember, previous minimal validation or understanding of the problem, talking to potential customers), I welcome you to “hell.”
Creating products takes work. As I said before, this is not a bed of roses; there is a lot of sacrifice and many hours (and money invested), and you need the knowledge to execute it. You will need marketing, sales, business, management, design, technology… a long etcetera that you will surely need help doing. It would help if you had a team.
🦄 If you are a person who knows about business, development, marketing, sales, design, product… you are a unicorn, a mythological being desired all over the world. Could you give it a go?
In case you are not a unicorn and need a team, there are several ways:
- “Close” friends or family: I believe involving family and friends in business is not ideal, as it can generate tensions that affect personal relationships. However, the final decision is yours.
- Professional friends: In this case, having friends you have met professionally can be an excellent idea. You know their skills and way of working, which facilitates collaboration in the business.
- Schools, universities, or accelerators: For example, Y Combinator or Lanzadera (Spain), where they help you form a team based on your idea. Although some great companies have emerged from these initiatives, they also carry some risk. They seem like a lottery.
If we already have a team, we can move forward and give life to that fantastic project we have in mind.
We are clear about the problem, we have analyzed the market and competition, I have divided the big issue into minor concerns, I have the priorities, I have the team, and I am transparent about the business. I started working but with good management.
6. Managing the plan
All these development or management processes will also be given in another separate article, so tell me in the comments, but let’s summarize something that I only sometimes find.
“The key to a business lies not only in a good idea but in an exceptional team, with a clear vision and a well-defined strategy that chart the path to success together.”
Creating a product requires having several areas under control, more than we usually consider.
This is the chart I usually find when defining products, mainly digital.
“It’s not ‘bad’; the problem for me is that it’s half-baked. There are many things we need to take into account, and precisely, in this initial phase, you will create the foundations of your company. If everything works well (which is ideal), you will scale quickly. Not having created this foundation properly will waste you a lot of time and money.”
I advise investing. Invest in a good structure, communication processes, and a clear team vision.
Let’s consider this part; it is just as critical as developing the product. It is one of the significant areas where companies usually fail (and learn it the hard way).
The ideal model of creation and growth is the following…
How do I approach this? Let me explain it to you.
Core Zone: The foundation of everything, an idea is worthless without execution; you’ll need this.
- Business: How will my idea/product make money?
- Marketing / Sales: How will I sell my idea/product?
- Product / Operations: What will the product/operation I sell be like?
We have to be clear about this central area before everything; in each of these ‘circles,’ we have our exercises, Business Model Canvas, Sales Model, User Mapping, etc., whatever we want (again, each one would be enough for almost an article).
In the vertices, we have:
- Vision: What is the objective we are pursuing? Everyone must be clear on this point.
- Strategy: How are we going to get to that point?
- Team: Who is going to take us to that point?
Team and strategy must define the product and, above all, push toward the right direction (vision).
The vision is the excellent lighthouse that should direct us, our polar star that shines even in the darkest nights. Most importantly, as I said before, we must all be clear about the vision and push in that direction.
By the way, the CEO’s job is to ensure that no one goes outside these “rules of the game” (triangle), so focus on providing that everyone knows what to do and when always with the vision in front of them.
7. Document the process and progress
As I mentioned, documenting the entire process, learnings, mistakes (which will not be few), and victories (however small they may be) must be registered.
This will also generate a source of truth for the whole team, clarifying what happened, when, and how.
As an added benefit, this documentation is often highly valued by investors. It makes it easier for them to understand how ideas have evolved and what has been learned along the way, as well as adding a touch of seriousness and professionalism.
How can we document everything? There are several tools to do it; I will recommend Notion.
It is free (at least to start with), mighty, and you can do almost anything. I leave you an example of how to create your startup knowledge base.
The Notion can be used for just about anything, from registering and tracking your first customers (CRM), following the development of your product (Task Manager), managing the publications you want to do in networks, etc.
✨ Bonus: Notion has a mighty AI, where you can create many things; if we add to this Zapier, you can automate many processes at almost no cost to focus on more essential items. The power of #nocode.
You will also have to write down the data obtained and how those metrics, goals, etc., are going.
It’s a heavy job, yes. It requires maintenance, yes. But take it from me; in the long run, you will be grateful for it.
8. Itera, but with criteria
When launching a product, you must iterate many things: texts, images, and some value proposition (pivot). Remember to document each of these iterations, defining the reason for the iteration.
People will develop new ideas and approaches if the team grows in a few months. Memory is not a good advisor (unless it is 64 GB of RAM). It is better to have everything written down. Whenever you go through the ‘Definition’ step, write it down.
More importantly, when you iterate, it should be with a logical approach and with some criteria.
Many great ideas are forgotten or discarded simply because they have not been adequately validated.
Your product will have to go through this wheel as many times as necessary until you have product-market-fit, another mythological animal that people don’t usually find so easily. Remember:
Your goal is to have a solution or commodity that people are willing to pay for.
And the sooner you find this, the better. Mentally, it’s tough to be working on a product or service for months (or years) without seeing that no one is paying for it. You can get frustrated. Remember that in entrepreneurship, your worst enemy is yourself (and then your partners).
9. Your next step
At this point, it’s straightforward: Does your MVP have traction? Do you make money? (How much is defined by your aspiration or target metrics). Is it enough to keep going?
Yes, I’m optimistic.
Fantastic! Congratulations! It would help if you started thinking about your next step.
In my experience, the most giant early-stage leaps come from people.
In other words, correctly sign the people who can give you a x10 in your business (which is complicated; it takes a lot of work).
There are other methods, obviously, such as buying more ads, partnerships with other companies, media, etc. But all these steps are taken by people, their knowledge, experience, and, on many occasions, the contacts of these people.
I have noticed a common trend in the startups I collaborate with or help. I have witnessed significant advances when they have products with high retention or virality index (known as K-Factor, a proper jargon). However, I’ve seen the most growth when onboarding exceptional people.
You’re always in talent acquisition mode, always. You may have to give % of the company (but remember to give it only to people who are worth it) or provide a salary. Still, my advice is to think about the ideal team for your company from the moment you build it.
✨ As an additional tip, if I had to choose, I would usually incorporate someone from sales or marketing first. This profile, often relegated to later stages, is crucial to selling the product and constantly focusing on that task.
And we come to the other extreme.
No, I am not optimistic.
These cases also need to be talked about… Let’s be honest! There’s a good chance you’ll fail; deal with it (and the sooner you do, the better) and have a plan B.
The quick and easy solution is to “close the biz,” but many times, there are more options. Calmness and judgment.
- Find a competitor or another startup and ally: Joining forces to create a better product.
- Sell (even if it is down): Many platforms allow you to sell software or “startups.” search Google is your best friend; it’s better to have a bad deal than no deal. At the very least, you will have learned.
- Let stand: This is another possibility; maybe it is yet to be the time for that startup, idea, or business; it needs a little more maturing. Suppose you have complete confidence in the market. In that case, I recommend working for a few months or years in the competition, understanding, learning, and analyzing how they do things. It will give you a different perspective (and an appreciated salary).
Generally, all startups that end up closing are usually for the same reasons, and the most common one is cash management.
I also recommend this reading to learn the top 10 reasons for startup closures.
10. Create a good structure
If you start to validate and have your first income, the first thing (and more if you are reading this from Spain) is to hire an agency (and, if you can, a lawyer, too).
Neglecting accounting and administrative management can be costly, with risks of fines or loss of tax benefits and subsidies simply for failing to comply correctly with deadlines and processes.
Without going any further, I almost lost a startup (and possibly ruined myself for a few years) for neglecting this issue. So don’t downplay its importance.
Taking advantage of the use case, I recommend using Holded or Agicap for the accounting management of your company; the cost you have here is almost negligible compared to the problems you can avoid.
Having said that and being formal, I will advise you to create a structure until you know there is validation. Do you want to pay Social Security, corporate tax, Self-employment, etc., before earning a euro/dolar?
It will be easier to get noticed or have problems having specific insurance unless it is mandatory. You don’t need to be self-employed or have a company to validate your idea.
✨Bonus: Within the law, if you can, I recommend that to validate, you do it through an LLC (partnership in the United States). This will allow you access to everything ‘corporate,’ like a Stripe account, delegate responsibilities, etc. Still, you won’t have to pay hundreds of euros a month in taxes.
When you are making (real) money, you open a company. For this, there are a lot of services like Globalfy or similar. Search on Google 😉.
Bonus Track. AI is your friend.
Last but not least, we are in 2023, the year of the AI boom; everything has changed, and nothing will ever be the same again. That’s why any article that talks about creating MVPs is already outdated. AI is here to stay — use it!
$20 per month (at least at the time of this article’s creation) allows you access to ChatGPT, a source of information that can do a lot of work for you.
- Business plan creation
- Copy adaptation or marketing strategy
- Email Planning
- Sales pitch
- …
The etcetera is so long that it would not end (and would give again for another article, so you know what you have to do, ask for it in comments).
You need to be aware of its power and potential.
A personal prediction: I believe that by 2025, the first startups created by a single person will be earning tens or hundreds of millions of euros.
The future is now. Take advantage of that train.
And these would be my 10 essential practical steps to create an MVP. As you may have seen, I have yet to focus on the development points. This would give for many articles and depends on each business or product you set up. I have tried to be a generalist and explain as much detail as possible from my experience.
There have been many years (and those that remain) developing and creating digital products. I try to transmit and explain everything I would have liked to know more than 10 years ago. I hope these steps or tips will help you in your new adventure. And remember…
“The biggest risk is to have no risk at all. In a fast-changing world, the only strategy guaranteed to fail is to take no risk.” M. Zuckerberg.
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