This post was written by Tom Ewer, a regular contributor for MyWifeQuitHerJob.com!
If you’re an online business owner then you may well be running a “startup” — at least by my preferred definition. Paul Graham, founder of one of the top startup accelerators in the world, defines a startup as follows:
A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.
So if you’re in business and you’re trying to grow, you’re a startup. And we are all well aware of how volatile such a situation can be.
With that in mind I am always looking for solid advice on how to minimize risk and maximize profit.
Some of the most compelling and logical advice I have come across recently can be found in a book called The Lean Startup by Eric Ries, a successful silicon valley entrepreneur.
In this post I want to draw upon a couple of its key teachings to explain why you should be building your business around an audience — not vice versa.
Minimum Viable Product
Wikipedia defines a Minimum Viable Product (MVP) as something that “has just those features that allow the product to be deployed, and no more.” You may question the worth of such a product — if its feature set is so limited then surely it will be greeted by nothing more than a lukewarm response at best?
Perhaps, but therein lies the whole philosophy of the lean startup movement. Ultimately, the goal of a lean startup is to learn what is valuable to the customer by asking them what they want, implementing the most popular features, testing to see if those features really are what they want, then moving forwards.
A successful lean startup moves through what Ries describes as the “build-measure-learn feedback loop” as quickly as possible. Build a product, measure the response, learn and improve.
A Real Life Example
One of my favorite examples of the implementation of a MVP and the consistent application of the build-measure-learn feedback loop is Buffer.
For those of you who don’t know, Buffer is a popular web-based app that allows you to schedule social media status updates in advance. These days Buffer is quite a complex app with many features, but that was not always the case. Here was Buffer’s initial MVP:
That’s right — the Minimum Viable Product wasn’t a product at all — merely a promise of one. In this way Joel Gascoigne (the founder of Buffer) was able to gauge the popularity of a product he hadn’t even developed. How’s that for efficiency?
How to Apply the MVP Concept to Your Own Business
In order to run a more efficient and profitable business you should to draw upon an existing audience. Ideally that would be your own audience (in the form of say blog readers or customers/clients) but that doesn’t have to be the case — in the above case study Gascoigne went to an external community to measure interest in his idea.
Then all you have to do is ask that audience what they want (or draw from inference). That’s exactly what I did with the freelance writing guide that I released back in November — I built a product based upon a genuine need that a healthy proportion of my audience had.
My point is this — as soon as you switch from developing a product or service around what you think people want to what they’re telling you they want, you have a far greater chance of success. In an age when we have direct access to hundreds and thousands of voices, why leave your product or service development to chance?
- The Ultimate Small Business Startup Guide
- Should I Use Groupon? Don’t Be Tempted By The Dark Side
- How A Failed Website Led To A 7 Figure Payout And Why You Need To Start A Business Today
- How To Increase Sales For Your Online Store By Tracking Custom Variables
- Is Your Business Just a Job?
Have you read these?
- Entrepreneurship: What Is Your Definition Of Failure?
- Hidden Costs Of Accepting Credit Cards Online That Most People Don’t Know About
- The Ultimate Small Business Startup Guide – Introduction
- How Much It Costs To Start An Online Store And Should I Dropship Or Carry Inventory
- Why Doing What Is Cheap And Easy Can Cost Your Business Time And Money