The Lean StartUp - 6 Test

The value of testing is illustrated and proven by the tests of Groupon to figure out if a service would be to the liking of the consumers. Groupon is now one of the fastest-growing companies of all time and the e-commerce site is the fastest startup to obtain a billion-dollar valuation. Nevertheless, all it started with was a small pizza coupon, handmade PDFs and a simple blog from WordPress. Yet they succeeded because through initial tests, they identified that consumers want coupons. 

Again, a minimum viable product (MVP) is an initial test that can be conducted by the company and its target is to test the assumptions that the startup has. Notably, MVPs or a first product, according to Ries, are not meant to be perfect. The reason is because of the fact that a product that is not perfect yet is more likely to attract early adopters which is a concept from the law of diffusion of innovation that was discussed in the summary of the book 'Think and Grow Rich'. This is an essential step because for a product to obtain mass market success, it must attain 12-15% of the market which is comprised by early adopters and then the system will 'tip' to attract mass market success. Therefore, early adopters are necessary and they tend to buy prototypes to show them off and that attracts them more than a perfect product because if it was perfect, they would not be first to the product. And the need to be first, is what makes them early adopters. 

A minimum viable product (MVP) can also be in the form of a video. The company DropBox released a video showcasing their technology and that was the main factor for their massive success. If the customers had not understood the product through the demonstration in the form of video, they would not have purchased the technology. 

The quality of a MVP is not to be determined, until the startup knows who the customers are. Therefore, even a 'low-quality' MVP can lead to an amount of data that could lead to creating a 'high-quality' product. A startup should release that 'low-quality' MVP and let the market decide whether that is good enough. Imagine Craig Newmark not releasing Craiglist because it was too simplistic in a technological sense. Also, remember about Groupon above, where they started with merely a simple blog and only 1 pizza coupon. 

Speed bumps to a MVP could be patent protection, according to Ries. This is because a patent has a limited time frame to protect the individual, and issuing a product to the public can start this time frame and therefore, have lesser time of protection. However, other risks such as not releasing a MVP because competitors can steal your idea are inaccurate. Even though this could be true, large companies, according to Ries, are already swamped with various ideas and therefore, do not have time to steal yours. 

Lastly, the author emphasises that the entrepreneurs should be determined not to lose hope if their MVP is unsuccessful. In fact, they should pivot and change their strategies, be flexible on the product they are trying to create and remember that the MVP is just the first step of the journey of learning.