A movement originating from the United States’ West Coast has sought to transform the creation of new businesses from an art to a science. The intellectual leader of the movement is Steve Blank, a serial entrepreneur who now teaches at Stanford and the University of California at Berkeley. One of Blank’s disciples, Eric Ries, turned his wildly popular Startup Lessons Learned blog into The Lean Startup, one of 2011’s best business books.
I’m a huge fan of this work and suggest that all innovators study the movement closely. One area that deserves particular attention is the notion of the minimal viable product (MVP). The concept is pretty simple. Because it’s next to impossible to be sure that your idea is good until you bring it into the marketplace, don’t waste time trying to fine-tune a product that is destined to be wrong. Instead, put something “good enough” in the marketplace. Let real customers use the product and learn from their feedback (Henry Mintzberg dubbed this process “emergent strategy” in an influential 1985 article [PDF]).
Sometimes, though, a Minimal Viable Product turns into a Mediocre Value Proposition. A company might introduce a product in the marketplace. A few customers find it interesting (you can always find a few customers). Results fall short of expectations, but the company says, “Well, it’s just a minimal viable product for learning.” The company makes a few tweaks, scales up spending . . . and falls flat on its face.
Part of me wonders if this isn’t what happened to Maghound. In late 2008, while prepping for a presentation to some magazine industry bigwigs, a colleague happened on a new venture that had been recently launched by Time, Inc. — “Netflix for magazines” — where consumers could get different magazines every month without having to have a fixed subscription to those magazines. Sounds great, doesn’t it?
Scott D. Anthony is managing director of Innosight Asia-Pacific.