Steve Blank: “You’re selling the vision and delivering the minimum feature set to visionaries, not everyone.”
Marketing Releasing and assessing the impact of a minimum viable product is a market testing strategy that is used to screen product ideas soon after their generation. The release is facilitated by rapid application development tools and languages common to web application development.
The MVP differs from the conventional market testing strategy of investing time and money early to implement a product before testing it in the market. The MVP is intended to ensure that the market wants the product before a large time and monetary investments are made. The MVP differs from the open source methodology of release early, release often that listens to users, letting them define the features and future of the product. The MVP starts with a product vision, which is maintained throughout the product life cycle, although it is adapted based on the explicit and implicit (indirect measures) feedback from potential future customers of the product.
The MVP is a strategy that may be used as a part of Blank’s customer development methodology that focuses on continual product iteration and refinement based on customer feedback. Additionally, the presentation of non-existing products and features may be refined using web-based statistical hypothesis testing, such as A/B testing.
The general method of deploy first, code later is akin to the agile program code testing methodology called test-driven development where unit tests are written before and fail until the code is written.
Minimum viable product Continuous deployment (only for software development) Split testing
Actionable metrics Actionable metrics can lead to informed business decisions and subsequent action. These are in contrast to vanity metrics—measurements that give “the rosiest picture possible” but do not accurately reflect the key drivers of a business.
Vanity metrics for one company may be actionable metrics for another. For example, a company specializing in creating web based dashboards for financial markets might view the number of web page views per person as a vanity metric as their revenue is not based on number of page views. However, an online magazine with advertising would view web page views as a key metric as page views are directly correlated to revenue.
A typical example of a vanity metric is “the number of new users gained per day”. While a high number of users gained per day seems beneficial to any company, if the cost of acquiring each user through expensive advertising campaigns is significantly higher than the revenue gained per user, then gaining more users could quickly lead to bankruptcy.
Pivot A pivot is a “structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.” A notable example of a company employing the pivot is Groupon; when the company first started, it was an online activism platform called The Point. After receiving almost no traction, the founders opened a WordPress blog and launched their first coupon promotion for a pizzeria located in their building lobby. Although they only received 20 redemptions, the founders realized that their idea was significant, and had successfully empowered people to coordinate group action. Three years later, Groupon would grow into a billion dollar business.
Steve Blank defines a pivot as “changing (or even firing) the plan instead of the executive (the sales exec, marketing or even the CEO).”
Innovation accounting This topic focuses on how entrepreneurs can maintain accountability and maximize outcomes by measuring progress, planning milestones, and prioritizing.
Build-Measure-Learn The Build–Measure–Learn loop emphasizes speed as a critical ingredient to product development. A team or company’s effectiveness is determined by its ability to ideate, quickly build a minimum viable product of that idea, measure its effectiveness in the market, and learn from that experiment. In other words, it’s a learning cycle of turning ideas into products, measuring customers’ reactions and behaviors against built products, and then deciding whether to persevere or pivot the idea; this process repeats as many times as necessary. The phases of the loop are: Ideas → Build → Product → Measure → Data → Learn.
This rapid iteration allows teams to discover a feasible path towards product/market fit, and to continue optimizing and refining the business model after reaching product/market fit.