Tag Archives: New Product Development

An MVP Is Not The Smallest Collection Of Features You Can Deliver

Source: Spotify

Source: Spotify

There’s a lot of discussion and confusion about what is and isn’t a minimum viable product (MVP).

Worse, many execs have latched on to the term without really understanding what truly constitutes an MVP — many use it as a buzzword, and as a synonym to mean a completed version 1.0 ready to be sold to all customers.

Buzzwords are meaningless. They represent lazy thinking. And using “MVP” to mean “first market launch” or “first customer ship” means you’re back to the old waterfall, traditional project-driven software development, sales-focused approach. If that’s your approach, fine. Just don’t call what you’re delivering an MVP.

On the flip side, lots of folks in the enterprise world, including in product management, over-think the term. It gets lost in the clever nuances of market maturity, and a long entrenchment in the world of release dates and feature-based requirements thinking.

Many folks think of MVP as simply the smallest collection of features to deliver to customers. Wrong. It’s not.

The problem with that approach is it assumes we know ahead of time exactly what will satisfy customers. Even if we’ve served them for years, odds are when it comes to a new product or feature, we don’t.

Now, the challenge with the concept of a minimum viable product is it constitutes an entirely different way of thinking about our approach to product development.

It’s not about product delivery actually — in other words, it’s not about delivering product for the sake of delivering it or to hit a deadline.

An MVP is about validated learning.

As such, it puts customers’ problems squarely at the center, not our solution.

Reality check: Customers don’t care about your solution. They care about their problems. Your solution, while interesting, is irrelevant.

So if we’re going to use the term “MVP”, it’s important to understand what it really means.

Fortunately, all it takes to do that is to go back to the definition.


Download The Handy Primer “What Is An MVP?” >>


Minimum Viable Product (MVP) is a term coined by Eric Ries as part of his Lean Startup methodology, which lays out a framework for pursuing a startup in particular, and product innovation more generally. This means we need to understand the methodology of Lean Startup to have the right context for using terms like “MVP”. (Just like we shouldn’t use “product backlog” from Agile as a synonym for “dumping ground for all possible feature ideas”.)

Eric lays out a definition for what is an MVP:

“The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

Eric goes on to explain exactly what he means (emphasis mine):

MVP, despite the name, is not about creating minimal products… In fact, MVP is quite annoying, because it imposes extra overhead. We have to manage to learn something from our first product iteration. In a lot of cases, this requires a lot of energy invested in talking to customers or metrics and analytics.

Second, the definition’s use of the words maximum and minimum means an MVP is decidedly not formulaic. It requires judgment to figure out, for any given context, what MVP makes sense.

Let’s break this down.

1. An MVP is a product. This means it must be something delivered to customers that they can use.

There’s a lot that’s been written about creating landing pages, mockups, prototypes, doing smoke tests, etc., and considering them as forms of MVPs. While these are undoubtedly worthwhile, and certainly “lean”, efforts to gain valuable learnings, they are not products. Read Ramli John‘s excellent post on “A Landing Page Is NOT A Minimum Viable Product“.

A product must attempt to deliver real value to customers. So a minimum viable product is an attempt — an experiment — to deliver real value to customer.

Which leads us to…

2. An MVP is viable. This means it must try to tangibly solve real world and urgent problems faced by your target customers. An MVP must attempt to deliver value.

So it’s not about figuring out the smallest collection of features. It’s about making sure we’ve understood our customers’ top problems, and figuring out how to deliver a solution to those problems in a way that early customers are willing to “pay” for. (“Pay” in quotes as it depends on your business model.)

If we can’t viably solve early customers’ primary problems, everything else is moot. That is why an MVP is about validated learning.

3. An MVP is the minimum version of your product vision. A few years ago, I had to build an online form builder app that would allow customers to create online payment forms without the need to write any HTML or worry about connecting to a payment gateway. Before having our developers write a single line of code to build the product, we first offered customers the capability as a service: we would get their specs, and then manually build and deliver each online payment form one-by-one, customer-by-customer. Customers would pay us for this service.

This “concierge” type service was our MVP version of our product vision. Of course, it wasn’t scalable. But we learned a heck of a lot: most common types of payment forms they wanted, what was most important to them in a form, frequency of wanting to make changes, reporting needs, and how they perceived the value of the service.

We parlayed these learnings into developing the software app itself — which, by the way, we delivered as an MVP to early customers to whom we had pre-sold the software product. (Yes, we delivered two different types of MVPs!)

Whether you take a “concierge” approach or your MVP is actual code, it most definitely does NOT mean it’s a half-baked or buggy product. (Remember viable from above?)

It DOES mean critically thinking through the absolute necessary features your product will need day 1 to solve your early customers’ top problems, focusing on delivering those first, and putting everything else on the backlog for the time being. It also means being very deliberate about finding those “earlyvangelists” that Steve Blank always talks about.

Ultimately, the key here is “maximum amount of validated learning”. This means being systematic about identifying your riskiest assumptions, formulating testable falsifiable hypotheses around these, and using an MVP — a minimum viable product version of your product vision — to prove or disprove your hypotheses.

Now, validated learning can certainly be accomplished via a landing page, mockup, wireframes, etc. And it may make sense to do these things. Super. But don’t call them MVPs, because while they may deliver value to you and your product idea, they’re not delivering actual value to the customer.

At the same time, the traditional product management exercise of identifying all the features of a product, force ranking them, and then drawing a line through the list to identify the smallest collection to be delivered by a given timeframe is not an MVP. Why? Because this approach is not predicated on maximizing validated learning. If you’re going to pursue this approach, go ahead and call it Release 1.0, Version 1.0, “Beta”, whatever. But don’t call it an MVP.

An MVP is about not just the solution we’re delivering, but also the approach. The key is maximizing validated learning.

I’ve created a handy primer on what is a minimum viable product. Download it below. I hope it helps you to become a pro at defining an MVP for your next great product idea!


Download The Handy Primer “What Is An MVP?” >>


The Case Against The Business Case – Part II

Note: This is part of 1 of a two-part series. Read part 1 here.

In part 1, I talked about the problems of pursuing a new product idea in an organization, which traditionally starts with preparing and selling a business case. I shared research that I conducted in which I spoke with a number of product management professionals across the country in companies large and small who resoundingly shared their distaste for the process.

The response was amazing. It seems my post touched a chord!

Some interesting stats:

  • Within one week, the post became the 3rd most viewed on my blog.
  • Tweets, likes and positive comments on my blog and LinkedIn groups where I shared my post totaled 31. In other words, 31 additional people were in agreement with the original 24 with whom I had spoken.
  • On the flip side, there were a 6 disagreeing comments posted on the same LinkedIn groups.

Now, if there were any other detractors (because many more viewed the article), they either didn’t agree, didn’t comment, or didn’t care.

Still, with 83% promoters and 17% detractors, this would give an NPS-style score of 66%.

So it seems I’m on to something here.

Here’s something interesting. According to the Pragmatic Marketing’s 2013 Annual Product Management and Marketing Survey, 50% of respondents indicated they spend at least half a day per week preparing business cases.

part-of-job

Do the math on this, and that’s 17.6 hours per month or the equivalent of 1 month and 3 days per year spent preparing business cases.

So on average, a product manager is spending over one month of an entire year preparing business cases. Surely there should be some ROI to spending that much time? Yet, we all know the rate of failed products is sadly high.

To be clear, I’m not saying a business case is not necessary. Indeed, one needs to have a robust business case to ask for a commitment of resources and/or investment.

I’m saying that while well-intentioned, somewhere along the way, the process by which we’ve gone about preparing the business case has become wasteful.

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Several months ago, Steve Blank wrote a column in the Wall Street Journal that talked about the need for a startup to begin not with a business plan, but with building and testing a business model.

Three years prior to that, he blogged about how Customer Development is more effective than the traditional product development process in helping startups raise VC money.

“In a traditional product development model, entrepreneurs come up with an idea or concept, write a business plan and try to get funding to bring that idea to fruition. The goal of their startup in this stage becomes “getting funded.” Entrepreneurs put together their funding presentation by extracting the key ideas from their business plan, putting them on PowerPoint/Keynote and pitching the company – until they get funded or exhausted.”

It seems to me the same logic can be applied to pursuing new product ideas in established organizations.

Just like entrepreneurs typically jump right into writing the business case and seeking funding, product managers (or any visionary employee) often go direct from coming up with a concept to writing the business case and seeking its approval.

traditional-biz-case

Here’s another quote from that WSJ article:

“Entrepreneurs treat a business plan, once written, as the culmination of everything they know and believe. All they need to do is add money and magically that five-year forecast in Appendix A will simply happen if they execute to the plan.”

I’ve found the same with business cases. There are two key problems with the traditional approach to preparing a business case.

One is, like with startups, pursuing a new product idea in an organization is also fraught with uncertainty. The assumptions that go into the financial forecast need to be tested.

The other is that when seeking approval, your goal and your execs’ goal may not necessarily be aligned.

You still have a lot to learn and prove in your model. But the execs are ultimately interested in only one thing: ROI. Perfectly understandable, given the financial responsibility entrusted upon them.

problem-with-biz-case

This often leads to wasteful execution. The focus becomes hitting an arbitrary delivery date and trying to hit a promised ROI.

The product manager is caught between a rock and hard place: learning from customers and launching on time. It often leads to delivering bloatware or crapware.

What was that stat again about the rate of failed products?

So it seems to me that to build a robust business case, it’s important to validate that you’ve truly understood your customers’ problems, that they’ve bought into your proposed solution, that the problem is worth solving, and that it fits with the company’s overall corporate strategy.

For extra credit, you need to identify some early adopters, or “earlyvangelists,” as Steve Blank calls them.

These insights can help you identify key metrics that will drive your financials, making for a much more solid business case, and increase the chances for more efficient execution.

To add to this, product managers face a unique challenge that entrepreneurs don’t, which is gaining and maintaining internal stakeholder support.

This can be especially true in larger organizations where there are simply more people to manage and placate. Lots of opinions. Capturing and addressing concerns. Following up. Competing agendas. Finding an executive champion. Lots of approvals.

These are real challenges with which the bold product manager has to deal.

How to address that? Perhaps there’s a way to apply Customer Development concepts to internal stakeholders…?

In fact, there is.

The Case Against The Business Case

Note: This is part of 1 of a two-part series. Read part 2 here.

I have a confession to share.

I don’t like business cases.

At least, I don’t like the traditional way I’ve been taught to prepare a business case.

The conventional approach to pursuing a new product idea in an organization is to first prepare a business case. This is what we’ve always been told.

It’s what we’re taught in business school.

There are even competitions organized around it.

And it’s been reinforced every time we need IT and implementation resources for a new idea — the only way I could get those resources was by having a business case.

And this usually meant writing a big document, preparing a multi-slided presentation, or filling out some cumbersome form.

Now, I’ve written many business cases in my career. Some good, some excellent, many bad ones. Over the years, I’ve gotten pretty good at it.

But every time I did it, I hated it.

Here are just three reasons:

1. I always felt it was a time consuming exercise in guesswork.

For example, I’d be asked to estimate (guestimate?) market size and put multi-year financial projections. This is an exercise in future prediction. Something we’re not good at. No one is. I’m certainly not.

2. No one reads it.

People are busy. They don’t have time. Most want the elevator pitch.

I can’t count how many pitches I’ve been in where the execs flip to the end or simply ask you for the bottom line: what’s the opportunity, how much do you need, why do you need it, when do we see return. 60 seconds. Go.

This means a business case is nothing more than a 20, 50, or 100-page paperweight. Steven Blank famously called a business plan “a document investors make you write that they don’t read.” The same could be said for the traditional business case:

“A business case is a document executives make you write that they don’t read.”

3. Selling the business case is hard.

This is especially true in larger organizations. Lots of opinions. Lots of approvals. Competing agendas.

So ensuring internal stakeholder alignment and support is a big challenge. Lack of stakeholder support can be the biggest impediment to your product idea.

It’s important to capture and address stakeholder concerns as early as possible to ensure continued buy-in, and that everyone is on the same page. This is time consuming.

Part of that has to do with the realities of coordinating schedules. But also I’ve found this experience to be very ad hoc and messy. There has to be a better way.

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Now, maybe the way I’ve gone about creating and selling my business cases has been wrong. Maybe my situation is unique. Maybe others don’t find this process so wasteful. Maybe they’re more brilliant than I am in creating awesome business cases that always get approved. Maybe they work in organizations that have streamlined the process to pursue a new product idea.

Maybe I could test that hypothesis.

So I did.

I set about to find out what other product management folks’ experiences have been with the traditional business case process.

Over a three week period, I spoke with over 24 product professionals in companies across a range of industries, from small 50-person companies to Fortune 100 organizations.

All had experienced preparing and selling a business case for a new product idea. They had an average of 7 years PM experience, and had titles ranging from Product Manager to VP of Product Management.

Business Case Interview Map

Here’s what I found out.

Getting buy-in was rated as the #1 problem by every person except one. And that person rated it as a very close #2.

75% of them validated that maintaining stakeholder support and alignment is important, but a real challenge. Only 3 out of 8 pursed doing this in any kind of systematic manner. Most agreed it was pretty ad hoc.

Furthermore, creating the business case was acknowledged as time consuming, and a “necessary evil”.

Necessary evil? Whoa.

When I probed deeper into their feelings about the actual act of preparing a business case, I uncovered an outpouring of vitriolic frustration.

Here’s what some of them had to say:

  • “It’s a necessary evil. But it’s a wasteful process.”
  • “It’s a joke.”
  • “It’s just a lifeless Powerpoint deck.”
  • “It’s a manager fighting with an Excel spreadsheet for a month.”
  • “I’m forced to project revenues out of thin air. Putting revenue projections is a nonsensical exercise.”
  • “Financial analysis – it’s really just pretend.”

“Lifeless”. “Nonsensical.” “Pretend.” “A joke.”.

“Evil.”

Ouch.

And my favorite comment:

“You are describing my life!”

Yikes.

I feel safe to say this feedback clearly validated my entire hypothesis.

So what’s the solution?

This is not so easy to answer.

It seems to me we need a different way to pursue new product opportunities within our organizations.

One that will provide a systematic process to create validated business cases.

And one that provides us with tools and resources needed to obtain that validation.

One that will enable us to more systematically build and maintain critical internal support.

And one that allows us to spend more time with customers testing and developing product ideas than writing paperweights, while also providing an effective means to communicate progress internally for continued engagement, feedback and buy-in.

What has your experience been with business cases? How have you pursued a new product idea in your organization? Please share your frustrations or joys in the comments below!

Read part 2 here.

Before Product/Market Fit comes Opportunity/Company Fit

In his book, Running Lean, Ash Maurya presents a workflow for taking a product from idea to launch to Product/Market fit.

Ash Maurya workflow
In the Problem/Solution Fit stage, you are trying to answer the question, “Do you have a problem worth solving?” Ash breaks this down further into three questions:

  • Is the problem something customers want solved? (must-have)
  • Can it be solved? (feasibility)
  • Will they pay for it? If not, who will? (viability)

Problem/Solution Fit is pursued by capturing your business model hypothesis and then doing Customer Discovery via problem interviews and solutions interviews with customers. Once you’ve validated from customers that you have a viable problem worth solving, you move into Product/Launch Fit.

In the Product/Launch Fit stage, you are trying to answer the question, “Are you ready to learn from customers?” Key activities pursued here are reducing down your MVP, getting to Release 1.0, defining your key metrics, and continuous deployment. The purpose here is to lay the critical groundwork to maximize speed and learning for future iterations, and to establish “just enough” traction among customers to support learning.

Finally, in pursuing Product/Market Fit you are trying to answer the ultimate question: “Have you built something customers want?” This is where the rubber hits the road, and you’re validating your complete product. Identifying the “right” metric or set of metrics, prioritizing your feature backlog, and ensuring retention and getting paid are critical to the success of achieving product/market fit.

This Lean Startup workflow is one that could be used by a product manager pursuing a new product idea or looking to introduce an existing product into a new market. After all, the product manager in such a situation must be able to answer the same set of questions about who is the customer, what customer problem is the product trying to solve, and will enough customers care enough to pay for the solution. The product manager typically starts with some sort of informed hypotheses to answer these questions, which form the basis of the product vision. And the product manager must stay in close touch with customers to validate whether the product is truly something they want.

I feel there is one critical step missing in this workflow, though. It has to do with the unique situation product managers find themselves in versus entrepreneurs. Whereas an entrepreneur is trying to discover a business model that works, a product manager is typically an employee in an existing company already executing a repeatable and scalable business model. As such, the new product idea being pursued by the product manager could represent a change to the company’s existing business model. As such, because of the potential impact on the company’s existing business model, a critical consideration for the product manager pursuing a new product is whether the new product is aligned with the company’s corporate strategy.

In his book, Product Leadership: Creating and Launching Superior New Products, author Robert G. Cooper talks about the need for new product development efforts to be closely linked to the overall business strategy. In Beyond the Core, Chris Zook makes the case that the further a new product or business idea is from the core business — what he calls an “adjacency move” — the riskier it is and more prone to failure. What this means is that the more closely aligned the new product idea is to the company’s existing business strategy, the more favorably it will be looked upon by the company’s executives. This does not mean something completely outside of a company’s existing core will never be approved. But it does mean the bar to get that buy-in is much higher.

So in order for the new product idea to garner the necessary stakeholder support, its business case must be able to articulate the business opportunity it presents to the company, how it fits (or departs) from the company’s current business model and strategy, and the risks associated with pursuing it.

As such, Ash’s workflow can be modified as follows:

opportunity-company-fit

I call this stage Opportunity/Company Fit.

Critical questions for the product manager to figure out are:

  • Does the idea align with the company’s strategic goals?
  • Who do I have to convince to get buy-in?
  • Can I get a sponsor? Who?

Just like with using customer validation to achieve Problem/Solution Fit, I’m sure it’s possible to use lean principles to achieve Opportunity/Company Fit.