In our earlier articles, we tried to reflect on the concept of MVP and associated hypotheses. Our conclusion is unequivocal: focusing on minimum viable products is the most optimum way for teams with limited resources and narrow time horizons. At the same time, one may object that many companies try this approach and still fail. Indeed, many seemingly promising MVPs – efficient in technical terms and based on adequate hypotheses – do not fulfill their goals. Today we are going to talk about why failures happen and how you can avoid such sad endings.
Why Startups Fail
The world of startups and MVPs is big and heterogeneous. Correspondingly, any generalizations and estimates should be treated with caution. But still, there are some figures from credible sources we can lean on.
Recently, CB Insights examined ‘101 startup failure post-mortems’. The list of reasons why those startups failed includes such points as (each respondent was allowed to name several reasons, so the total figure exceeds 100%):
- No market need – 42%
- Running out of cash – 29%
- Being outcompeted – 19%
- Issues related to pricing – 18%
- ‘Unfriendliness’ of the resulting product – 17%
- Lack of business model – 17%
- Disregard for customers – 14%
- ‘Mistimed’ character of the product – 14%
While some issues on this list relate to your hypothesis, others clearly have something to do with less ‘theoretical’ facets of your business. To address these practical aspects of your operations, we have decided to propose a brief checklist.
Basically, it is an attempt to enumerate all the things you need to take into consideration, alongside your hypothesis.
Once again, this is neither a guarantee nor a panacea. However, if you go through this checklist – with all the necessary details properly calculated and arranged – you will end up in a very good position to win big.
1. Define your ‘pain point’
It is a customer need that is not properly covered at a given moment. Namely, this is the problem you want to address with your ‘killer feature’. Two options are possible here.
a. The first one is the most promising and challenging: somehow you manage to find a unique niche that hasn’t yet been tapped into. It is a preferable path because you won’t have to deal with competition. However, it is also extremely unlikely to take place.
b. The second one is to cover an already existing and filled niche with a better proposition. What you need to do here can be divided into two parts:
– Deep competitor analysis combined with your user expertise and third-party insights
– Detailed contextualized interviews with users not satisfied with available offerings
2. Estimate Your Target Audience and User Flows Based on Pain Points
As for this stage, there are, again, two approaches.
– You can either evaluate your potential niche from top downward: you take the relevant market as a whole, then you try to figure out the size of your potential share based on your killer feature
– Or you can take a different direction, that is to say, from the bottom upwards. This angle is applicable only when you have visible competitors with similar killer features as reference marks. In this instance, you try to approximate and project their figures to make your forecast.
3. Whatever your preferred path is, competitive research is of great importance.
You need to examine not only those competitors that offer similar killer features but also those that might offer them in the future, which means you need to keep a close eye on their activities.
4. Prioritize Your Development Process
As we have said on numerous occasions, your MVP is all about the killer feature. However, focusing on it does not mean that you do not need to have a general roadmap on your mind. This route does need to be extremely detailed and precise. But a certain sequence of actions should exist.
We mean that you should never get confused once your killer feature is proven workable. Quite the contrary, you are supposed to have a rough idea of what you want to add to it or how to expand and improve it.
5. Resource planning
This is the most ‘mundane’ part. Knowing your margin of safety matters. It can be divided into:
– work remuneration
– payments related to storage, software, technologies
– spending on ads, sponsored content, and other ways of promotion
If you realize that you do not have enough resources to finance the initial life cycle of your venture, it is a reasonable measure to secure additional investments.
6. Work planning
In this respect, you are supposed to know such things as:
– your staff structure
– length and goals of your coding sprints
– your testing schedule
– customer feedback: timescales, deadlines, and success criteria
Even if your MVP hypothesis looks good, you still need to take a reasonable view of your resources and limits. If you realize that you cannot accomplish something on your own, it is ok to outsource some of your planned activities. Using third-party expertise and experience is a logical thing to do. The team of Evercode Lab would be happy to render such assistance.