4 Reasons Why MVP’s are a good idea for a startup

Are MVPs (i.e., creating Minimally Viable Products) a good idea for startup companies? Or for existing companies that want to create a new product or service?

Yes, absolutely! Why? I want to answer this “Why” question in this post. This idea is important and appropriate before I get into the short series of posts I mentioned in a previous post: Can non-geek startups get suitable software solutions.

First, what is an MVP? MVP = Minimally Viable Product

An MVP is the idea that you can create and release or sell a very, very small product with very few required features. This small product makes it faster and easier to get the product into the market, and to get proof of whether the concept in the product actually works or not…i.e., are customers willing to pay for it or not.

This idea applies not only to creating a new product from scratch, but also applies to adding new features to an existing product, as well as companies that provide services as opposed to products.

Now the question is, why should you do this? I see 3 reasons why:

  1. Cheaper – It takes less money, as well as effort and mental energy, to create a much smaller product
  2. Quicker – It takes less time to create the much smaller product.
  3. Last Risk – You risk less money, which then puts less money
Given those 3 reasons why, you can then realize additional benefits from executing an MVP:
  1. Faster to market – You can create the product and get it into customers hands sooner. This is often important when customers tastes and preferences change very quickly these days, and your competition is often reacting much quicker to your same customers changing preferences.
  2. Make money sooner – You are able to start earning money soon because of the two benefits above.
  3. Quick proof of the concept – You are able to learn if you’re product is any where close to hitting the mark as a result of the “Faster to market” and “Make money sooner” ideas above. The idea is that if you make any money at all, you can then figure out that you might actually have something good.

To execute an MVP is much, much easier and cheaper than creating a full blown product that has so many features that you “think” are necessary for the first version. But keep in mind the problem with creating an MVP is the tough decisions you have to make to strip away the fluff and figure out what really is minimally viable and a must-have to release the product.

We apply this idea to many projects in custom software solutions we create for our customers. Those projects are often situations where the customer wants to start a new line of business in an existing, well established company. Additionally, they are also often new companies or individuals starting a new company that wants to create a new product or service.

The solutions we create end up being small custom desktop applications or a new custom web application. Often enough, we end up continuing to modify and extend the solution over time, or the customer grows sufficiently that they can take over maintenance and improvement of the product in-house.

Who can create the technical solutions for a startup?

In continuing the series of posts on software solutions for startups started on Nov 20, here I’ll list who would create those solutions.

As a quick summary of what we’ve discussed so far:

  • Startups often don’t have the internal capabilities to create their software applications unique and critical to the startup’s success
  • Those software solutions are often web applications, mobile apps, and desktop applications

Now the question becomes, if the startup can’t create the technical solution themselves, who will do it for them?

Here’s a short list of options. Further below is a short discussion of each.

  • Your brother-in-law’s nephew’s cousin’s neighbor kid who is in highschool and knows something about computers.
  • College computer science major
  • Freelancer or independent contractor
  • Technical employees (programmers, software developers)
  • Custom software shop (large or small)

First of, if some suggests to you that their brother-in-law’s etc etc can help you, run away screaming. Don’t even talk to that person. Or if you don’t want to run away, just smile and don’t say anything. Don’t ever even consider going that route. The kid likely knows a little something but couldn’t write much beyond a simple Hello World app to save his life. Even if he is really good, he has no time…soccer practice, school, homework, XBox games to play…it’ll never get done even if he’s cheaper than dirt.

College comp sci majors? They’ll be much better at creating an application, an a little bit more expensive than dirt. But they’re also really really busy and the application will never get done. They’ll work hot and heavy for 1-2 weeks once you give them some beer money. But you’d be hard pressed to get any end results anywhere close to the schedule promised or needed.

So far, am I being harsh? Yes. But what I’m staying isn’t too far away from the truth. I’ve heard stories from customers that have tried these routes to get solutions done. We have also had to cleanup after sad situations like this. And when I say “cleanup” I really mean “throw it all away and start over”.

When we start talking about employees that are programmers, software developers, now we’re getting close. If you have these people now, or you are funded well enough to hire them your chances of success increase somewhat. But a lot of the responsibility for a good solution still relies on you. You need to know how to hire the best of the best of the best. You need to know how to manage the project to success, or hire someone that will. If you haven’t done this before, please tread carefully. Believe me, hiring developers, project managers, testers, etc is a special skill that only comes with experience and learning…which itself comes from making mistakes (I’m speaking from experience here).

The last group is software companies that create custom software solutions, which are are one. I honestly think they are the best solution out of the options above if you don’t have experience hiring technical people and managing the project. If you can find the right company, they’ll have experience working with startups, they’ll understand how to create solutions for startups. This means that they know how to create solutions incrementally and prove the minimal versions in the marketplace. This approach makes the project initially cheaper, faster to market, and significantly lowers the risk.

Given what I’ve summarized above, it would make sense to go with the smaller custom software shops.

Am I biased on that answer? Hell ya! I think we do a great job executing software projects, including those projects we do for startups. But given that, we’re not always the cheapest solution. Freelancers can be cheaper, but then again, one’s experience and capabilities with hiring and managing a complex software project will impact the potential for the starup’s success.

After you figure out who can create the solution the next question is often how will they pay for the solutions…that’s another topic for another time.

Next is what should be created and what shouldn’t be created. That’s always a really interesting question. The answer has a HUGE impact on the success of the startup.