Minimum Viable Product is better known as the MVP. For entrepreneurs, this is an important term. By definition, an MVP is a product with the bare minimum of features. But what’s the purpose of an MVP and how should you go about building it? These are the questions we had in our mind as we walked into the Lakshman Kadirgamar Institute. It was here that we recently saw a Disrupt 2.0 Startup Boot camp organized by Startup Sri Lanka. Here’s everything we learned about MVP’s at this startup boot camp.
MVP 101 by Arunoda Susiripala
The first speaker to take the stage was Arunoda Susiripala – founder of Kadira. He began his talk by refreshing everyone on some basic entrepreneurial definitions. Afterward, he defined what exactly an MVP is. In a nutshell, an MVP or Minimum Viable Product is a way of testing the value your startup idea creates, its growth and how much of that value is captured.
Arunoda then went on to share some words of wisdom. If your startup doesn’t create any value then it’s pointless. But if it does create value then you need to grow. If your startup is not growing then it’s pointless. So whatever value your startup creates, be sure to captures it. Most importantly, an MVP doesn’t have a process. It should be done in a short period of time at the cheapest cost. Arunoda concluded his speech by sharing some examples of MVP’s he’s seen.
Answering the important MVP questions
Following Arunoda’s talk, we saw Mike Soertsz, a Co-Founder of Foodie take the stage. He opened his talk by sharing with us that Foodie was built purely through bootstrapping. Everything from their web app to logistics chain was built through bootstrapping. They’re still in MVP with a website that has obvious limitations. Mike acknowledged that these limitations could be annoying.
But Foodie didn’t care. This was an MVP and it worked. The real Foodie will be coming soon. They’re also planning on expanding into Hong Kong and other parts of the region soon. Having given us the summarized version of Foodie’s journey, Mike delved deep into the topic of MVP’s. He started by answering the question, “What is the purpose of an MVP?” According to Mike, it can have many purposes. Some of these purposes are:
- To find and prove your business model works
- Building a product and customer base that pays for it
- Achieving an early objective. For Foodie, this meant learning how to survive and be profitable.
- Figuring out what makes you unique. An MVP is a great learning tool. It’s important to learn and be ready to pivot based on what you learn with your MVP.
Additionally, an MVP also shows what a startup needs to measure. The metrics you measure are critical for your business. If you’re bootstrapped then you need to measure vague things like lifetime value, the cost of acquisition, cost of retention, conversion rates, burn, etc. Whereas if you’re well-funded, then you need to measure things like active users, engagement, staff headcount, downloads, etc.
“What you measure is critical in business” – Mike Soertsz
Afterward, Mike spoke about who your MVP is for, how long it should last and most importantly how you should build it. When building a Minimum Viable Product, you have two options. The first option is to build everything by yourself from scratch. The second option is to simply outsource it or get some templates.
The second option is significantly easier than the first. However, if you choose to outsource it, then you have no control over your product. Yes, option one will cost you a lot of time and money. However, in desperate times, the amount of control you have over your own product is critical. It can either make or break your business.
This is why Foodie chose to go with option number one. To cover the costs of building an MVP, Mike and his team of developers worked on many outside projects. These projects also gave them some components, which they would later use in Foodie. Nonetheless, Mike doesn’t recommend this option of covering costs. You’re better off having enough money to cover costs, to begin with.
Mike’s startup bytes
Mike concluded his talk by sharing a few tips for budding entrepreneurs. The first tip was not to grow too fast. Rapid growth can kill companies if they’re not careful. This is what happened to Mike’s first company, which grew too fast with too many engineers. Secondly, an MVP typically doesn’t scale well. Build a version of your product that’s ready to serve hundreds of users before you need it.
His third tip was to be careful who you take advice from as an entrepreneur. Mike’s fourth tip encouraged everyone to prepare for technical and service failures. When a technical failure occurs, hundreds of customers are affected. Every single one of them counts. This is why it’s important to prepare for these failures.
Mike’s final tip for entrepreneurs was to be prepared to throw away their MVP’s. Technology changes at a rapid pace. As such, it’s important that everyone, especially startups keep up to date. This is why Foodie he says, is throwing their entire codebase out the window. They’re rebuilding everything and will be launching the new Foodie soon. With that, Mike concluded his talk at the Disrupt 2.0 Bootcamp.
Lessons from the panel discussion
Following the talks, we saw a panel discussion with the two speakers moderated by Indi Samarajiva – founder of Yamu. During this panel discussion, we learned quite a few things. One interesting fact we learned was how the two entrepreneurs built their initial customer base.
Arunoda built his customer base by giving his product for free. Whereas, Mike chose not to give anything for free initially. He couldn’t give anything for free because he believed that in the food delivery industry, you need to have a base of paying customers first. During the panel discussion, both entrepreneurs also went on to remind us about measuring metrics.
“For a bootstrapped company, cash-flow forecast is king” – Mike Soertsz
The most important metric is money as Arunoda pointed out. Mike elaborated on this a bit more, stating that for a bootstrapped business, the cash-flow forecast is the most prized document. However, one of the most important points spoken during the panel discussion was around validation.
“Before you build, you should find a market and ensure that you have customers” – Arunoda Susiripala
Before you begin building your MVP, Arunoda stated that you should have found your first customer. Mike reiterated this point and encouraged the use of mockups when pitching your startup idea. Validation is crucial for any startup idea. It’s important that you get the first customer before you start building. It said the customer is willing to pay, then you’re sorted.
Once the panel discussion ended, this Disrupt 2.0 boot camp on MVP’s came to an end. Do keep your calendars ready, though. There’s another Disrupt 2.0 boot camp on the horizon. This one will be focused on the importance of User Experience for startups. Once it’s announced, we’ll be sure to share the details with you on our event calendar.