M5-1: Testing Your Offering ( Introduction)

Summary

This video emphasizes the importance of testing your product or service before fully developing it, particularly through an MVP (Minimum Viable Product). Entrepreneurs are encouraged to validate market demand and customer behavior early to avoid costly mistakes. Examples like Kickstarter videos and Airbnb's accidental MVP illustrate the value of testing core functionalities before investing heavily. The video also discusses starting small, manually testing services, and gathering feedback. It stresses that an MVP should focus on the essentials, allowing entrepreneurs to refine their offerings and customer acquisition strategies before scaling.

Takeaways

• 😀 'If you build it, they will come' is bad advice for entrepreneurs — always test before building.
• 😀 The MVP (Minimum Viable Product) is about proving that customers will engage with your offering before full-scale development.
• 😀 MVP is more about testing customer behavior than perfecting a product.
• 😀 Start by validating your offering with simple methods, like sketches or wireframes, before jumping into full development.
• 😀 Kickstarter videos can act as MVPs by testing market interest before creating the actual product.
• 😀 Airbnb started with a simple listing of their apartment to test demand for shared spaces, without needing a full website or app.
• 😀 Focus on behavior change — the MVP should test whether customers are willing to adopt and engage with your offering.
• 😀 For products like cookies, you can test demand by selling small batches at local festivals or to nearby businesses.
• 😀 You don’t need an app or website to start testing a service; manual processes like email orders can help refine your business concept.
• 😀 Prototyping doesn’t need to be fully functional — a basic version or visual representation can help you get feedback.
• 😀 Fitbit started with a basic step-tracking device to test if users would engage with health data before developing more complex features.

Q & A

What does the phrase 'If you build it, they will come' imply, and why is it bad advice for entrepreneurs?

'If you build it, they will come' suggests that just creating something will automatically lead to customers. This is bad advice for entrepreneurs because it overlooks the need for market testing and customer feedback before launching a product or service.

What is the key takeaway from testing an offering before building it?

The key takeaway is that entrepreneurs should test their offering to ensure there is a market demand and that they can meet customer needs. This helps avoid wasting resources on a product or service that might not succeed.

What does MVP stand for, and why is it important?

MVP stands for 'Minimum Viable Product' or 'Minimum Viable Proof'. It’s important because it allows entrepreneurs to get valuable feedback from customers early on before investing heavily in development, ensuring they are on the right track.

How is an MVP different from a fully developed product?

An MVP is a simplified version of a product that tests the core functionality to validate its market fit, while a fully developed product is a polished version that includes all features and is ready for mass production or release.

What was AirBnB's MVP, and how did it validate their business idea?

Airbnb's MVP was renting out an apartment to guests using a simple website. This provided them with proof that people were willing to pay for the service, validating their idea and building confidence for the next steps.

What is meant by testing customer behavior in the context of MVP?

Testing customer behavior involves understanding what actions customers would need to take to adopt and use your offering. This allows you to focus on whether customers are willing to change their behavior based on your product or service.

Why is it important to align your team on the MVP before development?

Aligning your team on the MVP ensures that everyone is on the same page about the product's core functionality, which can lead to more efficient development and clearer communication with potential customers.

How can you test an MVP without having a fully developed product or website?

You can test an MVP by starting with simpler, low-tech alternatives like sketches, wireframes, or manual processes. For example, you can offer a service through email or test a product with a small batch before investing in expensive technology.

How did FitBit test their MVP, and what did it help them learn?

FitBit started with a simple wearable device that tracked footsteps, allowing them to test if it influenced customer behavior. This helped them learn that people were interested in using data to improve their fitness, providing valuable insights before full-scale product development.

What should entrepreneurs focus on when testing their MVP with customers?

Entrepreneurs should focus on the core functionality of their offering, testing whether customers are willing to change their behavior to use the product or service. This helps identify the most valuable aspects of the offering before scaling up.