Week 8

MVP (Minimum Viable Product)

MVP (Minimum Viable Product)

Just enough features to be usable by early customers to provide feedback for future product development

Value hypothesis

Test if product/service provides enough value & will customers pay for it

Growth hypothesis

Tests how customers will find your product/service + shows how it could grow

Genchi gembutsu (from TPS*)

“Go and see for yourself”

Steve Blank

“Get out of the building…”

Customer archetype

Brief document seeking to humanize the target customer

‘Just do it’

Build immediately after few or no customer conversations, often go down the wrong path

‘Analysis paralysis’

Endlessly refining plans

Testing Our MVP

1. Goal: Test fundamental business hypothesis

2. Validate ‘leap of faith’ assumptions

3. Requires visionary early customers (early adopters)

Innovation Accounting

Evaluating progress when all the metrics typically used in an established company (revenue, customers, ROI, market share) are effectively zero

Use MVP to establish baseline data on current situation

Smoke test: pre-order product that hasn’t been built

‘Tune the engine’ from baseline toward ideal

Every product development, marketing/other initiative is targeted at improving one of the drivers of the growth model

Pivot/persevere

‘Go or no go’ point, progress towards your ideal product validating your direction

Innovation Accounting: Cohort Analysis

Separate users into groups based on the time they joined, measure your metric for each group independently

Innovation Accounting: Split Test (A/B Testing)

Avoids bias by splitting users into seeing two different versions of your product, analyzing the metric from both groups, producing quantitative evidence which version is better

Innovation Accounting: Kanban

Visualization tool for constant adjustments + quick feedback loops. streamlines flow, limiting WIP’s so that value is delivered quickly

Innovation Accounting: 3 A’s

1. Actionable

2. Accessible

3. Auditable

Actionable

Demonstrate clear cause and effect

Accessible

Anyone can find and use the data at any time

Auditable

Ensure data is credible, ability to test

Pivot

Change old hypothesis to new one - changing one or more aspects of your business model (Ex. customer segment, value proposition, revenue model, or distribution channel)

Persevere

Continuing with the hypothesis, sticking with the original vision/strategy + continuing to refine and optimize

Business Architecture Pivot

high-margin, low-volume businesses to low-margin, high-volume businesses/vice versa

Engine of Growth Pivot

Changing the way a business gains + retains customers

Channel Pivot

Changing the mechanism of product delivery to customers (Ex. direct vs. retail)

Technology Pivot

Achieving the desired solution by employing different technology