Your MVP’s Success Depends On You Choosing Your Slice Of The Pie
It was the beginning of January 2018. I was logged into iTunes Connect staring at a message from Apple, “Your app status is changed to Developer Removed From Sale”. After six months of investing time and capital into building a mobile app, I had decided to pull it from the App Store.
I was staring intently at the message because I asked myself, “How the hell did I get here?” The short answer was I built a solution within an unclear focus on who was my customer and what problem I was solving, which can all be validated without thousands of dollars and six months of my time. The long answer is a journey into learning more about what mistakes I made and the importance of choosing a narrow customer segment without a real pain that my product could remedy.
By finding my slice of the pie with the learnings below, I privately launched the second iteration of my MVP with positive results. I saw a big jump in revenue and engagement. I was also able to to validate my idea with two months of research and a prototype sketched on a piece of paper. Which one would you take? A few thousand dollars and six months of development OR a few hundred bucks (mostly coffee’s) and two months of research.
The Journey
In the last week of December, I took sometime for myself for a personal retreat. I went down to Puerto Rico for three nights at the cheapest AirBnB I could find with the intention of reading, journaling, and meditating on what went wrong. One of the books I read was Brian Cohen’s “What Every Angel Investor Wants You To Know”. A line the book that really stuck with me was when Brian asked, “Do you have a product or do you have a company?”. At that point, I knew all I had was a product that no one was paying for and no one was using — no company.
Upon my return, I immediately went to YouTube and searched “product company” and funny enough the first video on the list was Harvard i-lab’s Startup Secret Series Turning Products Into Companies (yay to algorithms). As I was watching, I heard Michael Skok say along the lines “I wish this was talked about more alongside building an MVP” and “I call this the dance partner to the MVP”. I got really focused because I had a feeling I knew I was about to find the key to the treasure chest and then he said it. “MVS”, which stands for Minimum Viable Segment.
MVS is about focusing on a market segment of potential customers that have the same needs to which you can align. Defining and focusing on your MVS is vital because without it, potential users who have divergent needs will quickly pull your MVP in many different directions. This in turn will bloat rather than minimize your product requirements and drain your limited startup resources.
Reflecting back, I saw my major mistake and the biggest opportunity for growth as a founder. When I built my MVP, I set out to help people interested in meditation learn how to do it and stay motivated, but I never got specific about who “meditators” actually was. With such an interest in meditation at the moment, that’s actually a large group of people. The whole pie is so much a mouthful for a small team of one founder.
There are so many possibilities to get more specific with this large group of “meditators”. Do they live in suburban or urban areas? Do they ever go to a meditation center and meditate amongst a group of people or do they only practice via an app at home? Have they been on a silent meditation retreat or are they just beginning to learn about it through Headspace or Calm?
After conducting user research, I’ve learned there are different types of meditators with a different set of needs and behaviors. I was marketing and selling to the entire group and wondered why there was so much inconsistency. While the app was live in the App Store: some customers stuck around and some didn’t, some customers paid and some didn’t, and some customers were using features people asked for and some weren’t.
I was building for a very vague customer. Asking myself, “Who was my MVS to my MVP?” constrained me to focus, which I’ve come to learn is such a critical yet difficult skill to develop. Without focus, it’s very possible to waste time, cash, and other resources, which is probably the number one reason most early stage startups fail.
Upon realizing the mistake of casting too wide of a net, I wanted to understand how entrepreneurs define and choose their initial market for success. In Go to Market Strategies, another video in the Startup Secrets video series, Michael Skok makes multiple references to an individual named Geoffrey Moore, who I decided to Google. I found that he authored a book that is quite popular in the world of entrepreneurship and software called “Crossing The Chasm”. This would be the next critical resource along my journey.
In “Crossing The Chasm”, Geoffrey Moore presents the Innovation Adoption Lifecycle, which is a framework that outlines how people decide to try and see the value in new products. By understanding this, entrepreneurs can market and sell to the right potential customers who can provide more consistent results than what I saw.
Moore explained that by capturing the early market within your niche, you can establish a “beachhead” which will position yourself with a foothold against incumbents and competition. This will also provide opportunities for Word-Of-Mouth growth because potential customers will have references or people to refer to about the value of your product or service. The early market consists of marketing and selling to your innovators and early adopters.
Innovators are described as technologists who aggressively seek out new products with financial means to try solutions with low expectations of a positive outcome. Early Adopters are described as less risky then innovators, but still willing to try solutions more often then the mainstream market. They are opinionated and considered thought leaders within their market. After reflecting on this, I asked myself, “Within the piece of the market that I want to capture, who would be most willing to try my product or service?”
Another framework Moore provided, which I found myself repeatedly coming back to, was his scoring system for different customer segments. After weeks on weeks of research, I found a few attractive groups to pursue, but as I read over and over to learn faster, pick only one segment. Focus.
There’s so much anxiety over choosing only one segment because there are so many what if’s. The ranking system Moore offered helped because it forced me to objectively look at the groups. I was stuck between three and had to choose one. There are seven criteria part of the ranking system to evaluate each of the attractive groups. After I had scored each criteria from 1 to 5, I then chose the segment with the highest score. If you have a team, you’ll want to do this exercise with them!
- Does the target customer have the financial means to pay for my service?
- How accessible is the target customer?
- Does the target customer have a compelling reason to buy?
- Can you deliver a whole product with the help of partners?
- Is the competition strong enough to make it really difficult to capture this customer?
- If you capture this segment, can we leverage it to capture others?
- Is the target customer inline with the founder’s passion, values, and goals?
The score between all three was very close. It actually came down to the accessibility of the customer. I chose the group I could easily meet in person with. This really helped me build trust with my first customers for the second iteration of the MVP. I was able to grab coffee, build rapport, and show them sketches of what the product looked like. When I asked for a paid upfront commitment, without a product being built, they were much likely to say yes versus if this had occurred over a video call.
Moore puts such an emphasis on the importance of defining and choosing your niche and shows the impact businesses have seen from doing this. Like me, I have seen it is common for founders to be very wide about their initial target market because the numbers look good on paper.
No business plan survives first contact with customers — Steve Blank
I had finished reading “Crossing The Chasm” and realized I needed to stop all development and focus on research till I felt relatively confident about my the customer segment. The only way to accurately put a score to each of the questions was to talk to the segment to better understand their needs, behaviors, and pains. I read a few books about conducting user research, but the one that stood out and I found most valuable was “Lean Customer Development”, by Cindy Alvarez.
There are so many great takeaways from this book. The two that stuck with me was the mention of Steve Blank’s concept of earlyvangelists, which builds on top of early adopters, as well as her advice for the technical aspects of conducting user research.
“Early adopters are willing to try just about anything! That won’t help you validate or invalidate your hypotheses. You need to find people who have the specific problem you are trying to solve” — Cindy Alvarez
I was initially taken back because this was contrary to what I read in Moore’s book, but I liked the different perspective offered. This perspective reminded me that the emphasis should be on validating or invalidating my hypothesis, not revenue.
The only way to win is to learn faster than anyone else. — Eric Reis
Not only do earlyvangelists share in your vision but they also have the following characteristics:
At the end of interviews with potential customers, I would always see whether my gut felt this person was an earlyvangelist or not and when I reviewed my notes I asked myself again.
Speaking of notes, this was also an area of improvement for me. At the time of reading Cindy’s “Lean Customer Development”, I was conducting user research, but I did not have a structured list of questions nor was I recording notes in an organized way. After having a difficult time synthesizing all the data I was collecting, I realized these are two very important parts of research.
I was recording conversations, with permission, and always wondered when I went back to review them, “What level of detail should be in my note taking?”. It became extremely cumbersome because I was transcribing EVERY 20-minute conversation I was having! Imagine trying to see patterns from that. Cindy provided some sound advice for me in this area.
You need the most detail when the interviewee says: something that validates your hypothesis; something that invalidates your hypothesis; anything that takes you by surprise; anything full of emotion.
I took these four points and immediately after an interview, I would spend fifteen minutes brain dumping this in my excel sheet. It became a lot easier to spot patterns because I had structured way of summarizing all the conversations. Instead of transcribing every word, I was extracting the important pieces of information that supported learning.
Ensure Your Success
From being able to practice using these concepts and frameworks, I was able to find my slice of the pie. For the second MVP, I was able to get eight pre-orders, or money upfront, without a product being built with a lot less money and time. I’m in the midst of running the MVP the right now but in the first month, I am seeing a 2x jump in revenue and 3x jump in engagement!
Before you release or start building your MVP:
- Honestly ask yourself, “Do I have an MVS to my MVP?”
- If not stop building, and start putting together hypotheses about who your earlyvangelists could be.
- Validate those hypotheses by conducting organized user research to have enough information to rank and compare a few customer segments using Moore’s criteria.
- Choose ONE segment to run the MVP with and analyze results. Remember the focus is learning so if that segment doesn’t work out, you learned something! There are multiple paths to success.
Good luck!
Originally published on julioarivera.com
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