I love March Madness. Unfortunately, none of my favorite teams made it to the Final Four but every team that did make it has proven themselves in the heat of battle. In business as in basketball, you need to have MVPs who come through during clutch times.
What are the MVPs for startups? Here are three that I believe are necessary for success and if you don’t have all three then you may have a difficult journey ahead.
MVP #1 Maximum Value Proposition
This MPV is more than just you have a great idea. Ideas aren’t worth anything unless they meet a need in the marketplace. What problem are you solving? What can you do better than anyone else? You don’t have to solve world hunger or cure cancer. Many successful startups are solving everyday problems but doing it faster, better, and cheaper than the status quo or their competition. Most of them tend to incorporate the latest technologies and innovations (for example, Webmethods) in their business processes to get the desired results and excel at the business goals they have set for themselves.
This MVP is also about doing something that you are passionate about. Passion is an extremely valuable but intangible asset that can sustain you until you find the right value proposition. People can sense that passion and when you find that MVP it’s a powerful 1-2 combination!
From a financial perspective, having a Maximum Value Proposition will maximize the ROI for your startup and is a great setup for the next MVP, your Minimum Viable Product
MVP #2 Minimum Viable Product
You will then need to strip down your product or service to its essential core and then find someone who is willing to pay for it. Does it have the right attributes that customers want? Use appropriate market research techniques, such as MaxDiff Analysis, for instance, to figure that out. It doesn’t matter how many bells and whistles you have if no one is willing to buy it.
It’s also important to develop the proper business model. Are you using a Freemium model where you offer limited features and functionality for free and more advanced features for a subscription? LinkedIn is a great example of this. Or maybe, you should use a Long Tail or two sided market model. Whatever model you choose, you need to understand how you will make money.
Getting to the Final Four requires winning strategies and tactics that produce significantly more wins than losses. You have found a profitable business model when you have enough customers who are willing to buy your MVP and have a plan to establish a suitable market niche.
Your next challenge is figuring out how to scale the business and that requires you to move on to the next MVP.
MVP #3 Most Valuable Players
A successful startup requires team players who complement each other. A successful entrepreneur looks to surround himself with MVPs who can fill the gaps where they are lacking. These could be critical areas such as business development, sales, marketing, finance, and operations. While an entrepreneur may be able to wear many hats, that doesn’t mean they should, especially over the long run. The reality is that there are only so many hours in a day. Trying to do everything yourself is not only exhausting but lonely. Look for the one or two people who can shoulder some of responsibility, support you in the difficult times, and that you would enjoy working with.
In basketball, it usually takes more than one MVP to win a championship. Coaches are always scouting for talent to fill the gaps in their lineup. You too need to be on the lookout for potential MVPs who would make your startup team better.
Don’t Forget Validate Your MVPs
Starting a new business is an iterative process and success doesn’t happen overnight. Your ideas need refinement, your product and service needs testing, and not everyone you bring into the business will turn out to be a good fit. You must keep adjusting your MVPs as you go. Test your assumptions through market research and testing. Are you getting the results you expected or not?
Pivot or Persevere?
If you’re not getting great results then you will need to determine if your MVPs are the right ones to take your startup to the next level. Do you need to adjust the value proposition? Do you need to change the business model? Is your business partner not working out? Sometimes these are minor changes that need to be made and sometimes these can be gut-wrenching decisions that are extremely difficult to make. Who said being an entrepreneur would be easy?
Win or Lose, It’s How You Play the Game
When the NCAA Basketball Tournament starts, I usually pick the underdogs. I really admire the underdogs who give it their best and can be gracious in victory or defeat. To me, startups are the underdogs in the business world. If you are one, then I’m pulling for you and hope that you pull off the upset.
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About the Author
Donovan Hardenbrook is a technology geek who believes all businesses should embrace Lean Startup. Donovan’s expertise is in Strategic Planning, New Product Development, Marketing, and Quality Management. He is certified in New Product Development (NPDP), Project Management (PMP), and Quality (ISO 9001/AS9100 Quality Auditor). He holds MS and BS degrees in Electrical Engineering and a MBA.