Start Your Business With A MVP
Over the years, I’ve interviewed dozens of entrepreneurs and have spoken to several more about what they should do to start a business. It’s a common belief that you need a lot of money to get started. Unfortunately, it’s also a common belief that you need to come from a rich family or be highly educated in order to be successful in your first year of business. They say that 9 out of 10 businesses fail in their first year. While that may be true, they rarely give reasons as to why it doesn’t work out.
If you ask me, it’s due to a lack of operational practicality. Far too often people want to open a sandwich shop even though they’ve never sold a sandwich. All they know is that their friends and parents think that their sandwiches are good so they assume that they can make a living from selling them. Ignoring the fact that making good sandwiches is very different from running a business that sells sandwiches. To me, it’s not practical to start a full business operation from day one. What is more practical is starting small, then building up to full business operation over the years while building your client base and brand equity.
What am I talking about here? I’m talking about a MVP. No, I’m not talking about the Most Valuable Player. I’m talking about the other MVP, the Minimum Viable Product. A MVP is the most simplest version of your business model. It typically is the core of your business, that you can make revenue with. If you wanted to open a salon, under the MVP model you would first become a mobile hairstylist and build your client list. Referring back to the sandwich guy/gal. If you want to open a sandwich shop you should first become successful at selling sandwiches at pop-up restaurant locations and farmer’s markets. That way you not only get used to selling sandwiches to complete strangers. You can also build up your client base by collecting emails from people who want to visit your store some day. If entrepreneurs started their businesses with a MVP model, built their clientele and worked relentlessly at making a product sell really well, instead of an array of products. We’d see the success rate of businesses in their first year improve dramatically.
Starting your business with a MVP allows you to ramp up at your own pace. It also allows you to collect information from people who would want to be a customer again and allows you to work out all the kinks in your operation. All at a much lower cost than the cost associated with a full operation. The money that you will be saving or even part of the money you will be saving, you can allocate to other parts of your business. Like your marketing budget, hiring subcontractors to help when needed, product development or simply a rainy day. I always advocate for the MVP approach and I highly suggest that when first starting your business you should fully embrace it. It will save you a lot of money, time and sleepless nights. Two of my favorite books that talk a lot about this and explain it well are The Lean Startup by Eric Ries and The Lean Product Playbook by Dan Olsen. Trust me, you’ll want to read them. Let us know what your favorite business book is in the comments! Good luck!