Step 7 - Build the MVP (Minimal Viable Product)

Demystifying Customer Discovery

Correctly deciphering your customer’s needs is a crucial cornerstone in shaping your business. This process, termed Customer Discovery, involves engaging in proactive dialogues and outreach to validate your customer assumptions with utmost confidence. The goal is to unearth a prevalent problem or need and design a solution that caters to the largest feasible customer base, in line with their specific requirements.

Engaging frequently with your prospective customers fosters a deeper understanding of their usage patterns. It empowers you to stratify your market based on the customer’s profile, purchasing autonomy, and motivational triggers.

At its core, Customer Discovery is about perceiving and understanding the customer’s pain points and their genuine need for a resolution.

Think of Customer Discovery as a laboratory for business Experimentation. Upon concluding this process, it’s valuable to reflect on what you and your team have learned. Did you encounter any surprises? These unexpected revelations could signal the need for a business pivot, invalidate a previous assumption, or unveil an unexplored market niche.

Finally, pose this pivotal question to yourself and your team: Are you crafting vitamins or aspirin? This metaphor highlights the distinction between products or services that are “nice to have” (vitamins) and those that are “need to have” (aspirin). While vitamins may enhance well-being, they are not essential. On the other hand, aspirin-like solutions provide immediate relief from pain, making them indispensable to thkkke user.

When Rohit Khare (along with Salim Ismail) built Angstro, an AI-based social graph, Rohit insisted on talking to as many people as possible about the idea. The risk in Salim’s mind was that he might give the idea away; the reward, in Rohit’s view, was that they got free feedback on the idea, plus get a sense of who was interested, who might already be working on the same idea, and who might be future partners. Rohit was right. (Angstro was sold to Google in 2010.)

Minimal Viable Product

A key output of the Business Model Canvas is the Minimum Viable Product (MVP). This is an applied experiment to determine the simplest product that will allow the team to go to market and see how users respond (as well as help find investors for the next round of development). Feedback loops can then rapidly iterate the product to optimize it and drive the feature roadmap of its development. Learning, testing assumptions, pivoting, and iterating are key to this step. The Build/Measure/Learn process in Lean Startup is invaluable for building the MVP.

Notice the contrast. While Step 1 is about the MTP, or Purpose, this step is about Experimentation. This is not the whole story. As Peter Thiel has pointed out: “Not all startups thrive by Experimentation and purpose only” LinkedIn, Palantir, and SpaceX were fundamentally successful due to a strong vision of the future. Similarly, Thiel’s observation is further substantiated by Aileen Lee’s Unicorns research (which we addressed earlier in the chapter).

A key reason for an MVP is that it is much, much easier to change a product early in the development process than later. It’s also critical to discover what the customer does and doesn’t want, what they’re willing to pay for, and ultimately, what your team is actually able to deliver.

The notion of an MVP plus iteration has been key to the success of SpaceX and the new generation of space companies. In the case of SpaceX, the company began by building their Falcon-1 rocket using a single Merlin Engine on the first stage. The first three launch attempts failed, but each one got them closer, testing as many systems and assumptions as possible. Luckily, after scraping together enough funding for a fourth attempt, the rocket succeeded. The Falcon-1 was literally a “minimum viable product,” the smallest rocket that could get to orbit and prove the Merlin rocket engine, as well as the team’s engineering and operating ability. But what the market really needed was a much bigger rocket, the Falcon-9, which used nine of the Merlin engines in the first stage. This iterative approach worked, and Falcon-9 has become the most successful launch system ever built.