In last week’s post, I described the one thing your MVP should do – check it out for good and bad examples of MVPs.
To recap…An MVP tests your riskiest assumption, with the least effort. Click To Tweet
Based on the above, a couple things about MVPs become clear:
- To know what MVP to build, you must know your riskiest assumption.
- As your riskiest assumption changes, your MVP will change.
In other words, creating your MVP(s) is a journey – one that starts by validating your riskiest assumption.
Once you validate that riskiest assumption, a new assumption will become the “riskiest.” That means you’ll create a new MVP, or modify your current one, to validate it. You’ll continue this process until you acheive Product-Market Fit.
Of course to start the journey, you have to know what your current riskiest assumption is…
What’s your Riskiest Assumption?
Determining your Riskiest Assumption can feel like black magic. With so many assumptions to choose from…
- You can build a product that makes customers happy.
- You can find customers who will buy it.
- The customers will pay enough for it.
How do figure out which one is “riskiest?” How do you even evaluate the “risk” of an assumption?
After helping thousands of startups at accelerators and 1-on-1 validate their business models, I’ve seen a clear pattern of “riskiness” has emerged. A pattern so clear that I’ve been able to create a simple tool that quickly tells founders:
- What your Riskiest Assumption is.
- What MVP should you build to test it.
- Where you are on your path to Product-Market Fit.
Just answer the questions in the Riskiest Assumption Assessment and then take a look at the 5 Phases of Product Market Fit below to understand exactly what your next step should be.
If you want a hand taking that step, the Assessment will also tell you the most helpful exercise for you in my upcoming workbook series, “FOCUS Framework: How to Find Product-Market Fit” (launching May 3rd).What MVP should you be building? Let's find out... Click To Tweet
On your path to Product-Market Fit, there are five phases of assumption validation you’ll progress through. In order of “riskiness”, those phases are…
- Finding Early Adopters for your product
- Offer Testing: You can reach your Early Adopters
- Currency Testing: Your Early Adopters will pay you
- Utility Testing: You can satisfy your Early Adopters
- Scaling to Fit: You can achieve Product-Market Fit
Based on the results of your Riskiest Assumption Assessment above, identify which phase you’re in now to learn more about the MVP you should build, and see what’s ahead of you on your path to Product-Market Fit.
1. Finding Early Adopters for your Product
The riskiest assumption, for every startup, is that there are people actively trying to solve the problem your product will solve for them – these are the people we refer to as your Early Adopters.
In particular, your goal during this phase of testing is to validate:
- There are people already trying to solve the problem (Early Adopters)
- You know how they describe the problem
- You know the emotions they experience associated with the problem
- You know where/how to reach them
- The deficiencies of their current solution
Experiment to Run: The best technique for validating these assumptions is the customer discovery interview.
Interviews will answer any questions you have regarding the assumptions above, and set you up for success in validating the rest of your assumptions.
Metric to Measure: What percentage of customers you interview report taking steps to solve the same problem w/n the last 6 months? Once 60% of your last 10 interviewees report actively trying to solve the same problem, in my book, you’ll have found your Early Adopters.
2. Offer Testing: You can Reach your Early Adopters
During your interviews, customers will tell you where and how to reach other Early Adopters. Your goal in this phase is to validate what they told you.
In other words, you’re testing that you can find more Early Adopters, you know what to say to them when you find them, and that they’re eager enough for a solution to the problem that they ask you for more information.
MVP to Build: To validate this assumption, you’re going to test a combination of marketing channels and marketing messages based on the results of your interviews.
- Ad campaigns
- Cold email outreach
- Cold calling campaigns
- Becoming member of forums/communities
- Social media outreach
- Attending conferences, meetups, etc.
Metric to Measure: Once your Early Adopters’ response rate to your “Solution Offer” (i.e. click on your ads, respond to your emails, etc.) is high enough that you can clearly see a path to Product-Market Fit, you’re ready to test the next assumption.
3. Currency Testing: Your Early Adopters will Pay you
Once you’ve validated you can reach your Early Adopters, you need to test if they’ll “pay” you sufficiently to solve the problem.
In this case “payment” can be in the form of actual cash, or it can be something else that leads directly to your Product-Market Fit (e.g. usage of your product, personal data, etc.) depending on your business model.
MVP to Build: To validate this assumption you’re going to actually ask for “payment.” While you won’t usually take the payment (because your product hasn’t been built yet), you’re going to ask for it and measure how many Early Adopters try to pay you.
- Landing page with pre-order functionality
- Requesting a Letter of Intent after a solution interview
- A mobile app w/ just enough functionality to measure the number of downloads and opens
Metric to Measure: Once your Early Adopters “payment” conversion rate is high enough that you can clearly see a path to Product-Market Fit, you’re ready to test whether you can start solving the problem!
4. Utility Testing: You can Satisfy your Early Adopters
Now it’s time to test whether you can actually solve your Early Adopters’ problems. While it can be tempting to automate your first couple attempts at a solution, there’s usually a more efficient way to to test this assumption.
MVP to Build: manual solutions are the best way to test whether you can solve an Early Adopter’s problem.
While they make take more of your time to solve a customer’s problem, manual solutions are much faster to build, and even faster to iterate on, than automated (i.e. software) solutions.
Metric to Measure: Once you’re solving the problem sufficiently well that your Customer Lifetime Value and your Viral Co-Efficient are high enough that you’re tracking towards Product-Market Fit, you’re ready to start scaling your solution!
5. Scaling to Fit: You can achieve Product-Market Fit
Once you’ve validated that Early Adopters exist, you can reach them, they’ll pay you, and you can solve their problems sufficiently, the only assumption left is that you can scale until you achieve Product-Market Fit.
MVP to Build: now is the time you get to automate your solution, scale to multiple marketing channels, and branch out to your second and third customer segments.
- Beta version of your software
- Software-based pilot for a large customer
- Running outreach campaigns in multiple channels simultaneously
- Multiple, simultaneous, landing page test targeting different customers
Metric to Measure: At this point you’re measuring that all your previous metrics (e.g. response rate, conversion rate, Lifetime Value and Viral Co-Efficient) are all still tracking towards you achieving Product-Market Fit.
I know that’s a lot to digest, but you now have an overview of the entire path to Product-Market Fit.
If you’d like more detail on any of the phases above, including:
- How to define your Product-Market Fit metric (i.e. how do you know if you’re on track to achieving Product-Market Fit?)
- How to conduct your customer interviews
- How to do marketing channel and messaging testing
- How to do payment testing (without losing/upsetting your customers)
- How to manually test your solution
- How to scale your solution
I’ve spent the last 18 months developing and testing that upcoming workbook series I mentioned – the FOCUS Framework. It includes 40+ experiments, exercises and tools, all inspired by my experiences teaching Lean Startup and Customer development at accelerators, and to founders 1-on-1, around the world.
FOCUS officially launches May 3rd, and if you’re interested, you can get a $20 off launch-day coupon here: http://focus.customerdevlabs.com.
Based on the “Your MVP Should do 1 Thing” post, you know that:An MVP tests your riskiest assumption, with the least effort. Click To Tweet
In this post you learned:
- Your Riskiest Assumption
- What MVP you should use to test it
- Where you are on your path toward Product-Market Fit
- What phases of Product-Market Fit validation are ahead of you
In the following weeks I’ll be continuing this MVP series:
- What is an MVP?
- (This one) What Kind of MVP Should you Build?
- My 8 Favorite Tools for Building MVPs
- I’ll Fix your MVP: Send me your MVP and I’ll tell you what, if anything, to tweak to make it perfect.
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Like last week, if you leave a comment below with a link to your landing page MVP and if it provides a good lesson for others to learn from, I’ll post a (public) video review of what you’re doing well, and what you might consider changing.
Thanks to those who submitted their last week. I’ll be compiling everything for the final post in this MVP series!
I’d also love feedback on the new Riskiest Assessment Tool. Let me know what you like, and what you don’t, in the comments below.