Minimum Viable Product

Is your product idea good? Top 3 Ways to Know for Sure!

Ever had a product idea and wondered if it was any good?  Whether you are an engineer, an MBA, or a stay-at-home mom, these 5 tips will help you answer definitively whether your idea is good… or not!

Tip #1: 
What is your goal?  Do you want to build it for yourself or friends or sell it as an idea?  Do you want to start a full business or just make some for side-money?
Depending on your answer, good has different meanings… And tip #1 is essential to answer before you go any further.
Three possible answers make your product idea good:
Sell the idea!   Stop.  Nobody buys ideas.
Start a real business.  Yep, step 2.
Make some for side-income?   Okay, but tread carefully to step 2.
If this is a lark, stop now and proceed to hobby lobby!
Tip #2:  
Who cares?
Really, is there anyone who cares about your idea?  Does it solve someone’s problem or is otherwise desirable by some specific kind of customer?
If not, stop.   Someone, some specific demographic, the smaller the better, must care, have the problem, or otherwise desire the product, or else, stop.

Tip #3:
Can you sell one and for how much?

I don’t mean build one then sell one.. I mean sell one!

The best way to know if your product idea is good, and the TOP TIP to know for sure if your idea is good is to PRE-SELL it!

Literally, setup a 2 page website where page 1 introduces the product, page 2 accepts a pre-order.  If you can get a few pre-orders, go ahead a build *a few*…
You could also do this with Kickstarter or Indiegogo, but those services expect bigger ideas and a real budget for video/marketing/etc.  Instead take the money you make on the first few orders to build some…. then build a few more… once you’ve sold 100, go ahead, do your kickstarter!

Good luck!

Go out and SELL!  Sales is the only way to know if your product ideas is good or not.

Now, back to my Smart Watch idea….

The Greatest Start-up Book Ever?

I’ve read dozens, maybe almost a hundred books on start-ups.  I’ve loved many of them, but none of them really seemed like ‘science’ to me, more like opinion.  After reading The Lean Startup by Eric Ries, I now understand what I’ve been missing!  I really do feel like The Lean Startup is the greatest start-up book ever.. and here is why you MUST READ THIS BOOK NOW!

  1. It teaches entrepreneurs the “Scientific Method” for building a startup.
  2. It teaches entrepreneurs the proper ORDER of building a startup.
  3. It teaches INVESTORS the propper criteria to evaluate a startup.
  4. It explains in detail the right time to ‘get funding’ and more importantly ‘spend funding’.
  5. It explains very clearly why so many startups fail.
  6. It has dozens of examples of the process being used successfully.
  7. It truly teaches you about scale-able business models.
  8. It builds a great foundation for managing people and teams in a startup.
  9. It even applies to big organizations that want to be more startup-y.

DO NOT WAIT, get this book now.

7 reasons to Fail Early & Cheaply

Since everyone knows 19 out of 20 start-ups will fail… why not fail as soon as you can and as cheaply as you can?  In fact, recent evidence suggests that the #1 reason start-ups fail is trying to scale up too quickly/too soon.  Here are 7 reasons to FAIL as quickly as possible, and as cheaply as possible:

  1. Whenever you fail, you almost always learn more than if you succeed… especially if you start out with the goal of learning/deciding if a hypothesis will work.
  2. If you can fail quickly, you will likely have time and energy enough to try again!  (not necessarily a ‘new’ start-up, but instead another “hypothesis”/product variation to test in the current one).
  3. If you fail cheaply, you may have money enough to try again!
  4. If you fail early, you avoid spending too much time on a bad idea.
  5. If you fail cheaply, you haven’t invested too much “sunk costs” into the idea, and can let it die more quickly.
  6. If you can fail quickly, it means you have wisely set criteria for failure (a rare thing indeed!)!
  7. If and when you succeed, you KNOW you have something, because you have defined (wisely) what success is, and your past failures prove that the current situation is “Worth” scaling up!
Final word of warning: Scaling up itself is a difficult challenge, so use the term literally, and slowly increase the rate of growth, rather than step function.

ALWAYS provide an “Easy Button” for your customers.

It doesn’t matter what you sell, who you sell to, or how much you are charging.  There should always be an “easy” button for your customers.  In fact, the most basic, core functionality of  your product should be so easy, it barely even needs a button.  How do you do that, you ask?  Well, simple.  First, find the core functionality of your product.  Knowing that can be a huge help!  Second, make sure that the user can see (and use) the core functionality of your product in 1-click (or less).  If you don’t have a software product, let them see/use your product with no clicks… right out of the box… no assembly required.

At Karmaback, we recently improved our entire setup flow to require just 2 clicks.  Yah it’s not 1 yet.. (we’re working on it!)… but its a huge improvement.  Companies can now setup a fully functional, completely operational, fully hosted Sweepstakes for Facebook or Twitter or Web or all three, in 2 clicks.  Nice. 
How did we do it?  Easy Default Settings.  Simplified setup process… and most of all, the “Save” button.  (see screenshot below)
Setting up a Viral and Social Sweepsakes to run in your Facebook Fanpage or Twitter Feed couldn’t be more easier that it is now!  Well maybe a tiny bit easier… we want to get it down to 1 Click… we’re working on that.  Maybe we’ll call the 1 button “Easy”.  

How to recognize a BAD/Small Business Idea & MVP

Knowing a bad idea is sometimes easy… check out this hellarious site: stupidbusinessideas.com.  What do these have in common? Simple: it is obvious that people are not willing to pay for it (or the market is VERY small).  But how can an engineer-type thinker discover if his idea (which isn’t so obvious) is a Bad (small) business idea?

I will outline 2 methods, which would ideally both be used.

The First Method P.O.D.C.
PODC is a qualitative tool that helps a person analyze if the 4 key components of a Business Idea make sense
P = People
O = Opportunity
D = Deal
C = Context
If you see green lights all down the PODC list, you are good to go to the next method (or take your chances if you wish).   Here is what Green Lights should look like.
P.  The people running the business and inventing the product(s) are experts in the relevant fields and have experience having done it before.
O. The opportunity (the problem you are solving/need you are satisfying) is large enough that a small market share is all that is needed for a viable business.  E.g. a 1% market penetration would lead to a $5MM+ business.
D. The deal proposed is not too small or too big and has milestones and success markers along the way before further investment is needed.  E.G> a small amount of $ investment $ is all that is needed to get to the first milestone.
C. The context (the world view) is fresh and new, not old and boring.. and the business does NOT rely on some obscure law or quick trend.  Competition may or may not be there, but this solution seems unique and could be a long-lasting business.

Did your PODC come out green?  Now the real test: will people pay?
To test this, Engineer-thinkers need to deploy a Minimum Viable Product (MVP).  This is VERY hard for Engineer-type thinkers, who want to solve the whole thing & get it working first.  WRONG.  You need to TEST to see if people will pay first.  
Some guidance may be found here: http://venturehacks.com/articles/minimum-viable-product  and http://venturehacks.com/articles/minimum-viable-product-examples and of course http://www.startuplessonslearned.com/

Here is my quick instruction manual to make an MVP.
1.) Find someone creative who will build you a 3-page website for cheap.  ($1000)
2.) Build page 1 that gives the pitch for the new product/service.  1-button: Order Now.
3.) Build page 2 that shows the price & looks like a shopping cart.  1-button: Proceed with Order
4.) One page 3, say: “Sorry, we are currently back-ordered.  You will be emailed when new inventory is available.  Thanks for your business.”
5.) Build some ads for your business idea on Google Adwords: http://adwords.google.com/
6.) MEASURE how much it costs to bring ppl to your site… how many are interested in Order Now… and how many “Proceed with Order” after seeing the price.
7.) Adjust parts 3-6… and see if you can make MONEY with the business.

If you can sell for more than 4x the cost (where cost is product cost + shipping + marketing cost)  you are in good shape.

If not, start over with PODC and see what was wrong.

Best of luck!

Now, get some good ideas!