It All Depends
The one question that I have continually asked myself while working on PerkSpy is did we build too much? From the inception of the idea, many of the industry leaders and experts told us our idea was “too grandiose” and that we needed to build “the minimum viable product in order to gain an understanding of our market.” Without heeding this advice, we kept pushing forward with our vision of the perfect platform for customer loyalty and retention. Ultimately, we ignored sage advice because we felt confident we knew the answers to our customers’ needs already.
By looking at the competitive landscape in the mobile loyalty space, it is obvious that almost every competitor took the minimum viable product route. Naturally, the advice makes sense. Companies typically build a MVP to validate their market. The notion of giving the customers the smallest number of features that will get them to adopt your approach makes sense. Once you can validate your ability to sell the product, you can revisit a v.Next with all of the features the marketplace yearns for.
So why not build a minimum viable product?
Against all of the advice we had been given, PerkSpy felt it was better to end up with our own vision of what MVP stood for. PerkSpy believed that the market was ripe for the opportunity to embrace digital loyalty solutions. Rather than spending time building a product to validate our belief, we built a product to position ourselves with the greatest possible competitive advantage. PerkSpy coined our MVP process as “most valuable product.”
By building all of the features we felt would bring the most value to our target market, we instead positioned ourselves for the greatest possibility of success in the future. So far, our gambit has paid off. Our customers have been excited by the features we provide, and our competitor’s customers are looking at us because of the capabilities of our platform. Will the gamble pay off long term? We still can’t answer that question, but so far we are confident we took the right approach.
Best Advice: Minimum Viable Product or Most Valuable Product?
Ultimately, there is some value in both approaches. I feel pretty strongly that for PerkSpy we took the right approach. However, for other startups, the answer to this question will be different. There are a few questions which need to be answered when determining what level of sophistication you want your solution to have. Those questions are outlined below.
When to choose Minimum Viable
- The idea is revolutionary and the market has never seen anything like it
- You have a great idea, but the idea is not within an area you specialize in
- The development costs are high — when hiring or outsourcing it is best to start small
When to choose Most Valuable
- The costs of building your product are low — you have a team capable of building your product
- The market has been validated by external tests (surveys, questionnaires, conversations with potential customers, existing competitors, or advisors in the industry)
- Your expertise allows you to already understand the complex marketplace
The decision about which MVP you want to build is extremely important early in the entrepreneurial process. Picking the wrong MVP can not only be costly from a startup capital perspective, it can also lead to missed opportunities. The answer will be different for every startup. The best thing to do is take a step back, assess the position and abilities of your startup team, and continue moving forward towards your goals.
Image credit: Pablo Lobato