The secret to your startup success is simplicity. When you start your own business you have to think about tons of things. Name, USP, target audience, marketing, legal, finances, time, marketing/sales, how to deliver your product or service and much more! Most startups will avoid thinking of all of the above. Speaking from personal experience, we know that an entrepreneur can easily fall in love with his/her idea, focusing most of the time working on building the “perfect solution”. As author and entrepreneur, Steve Tobak wrote in an article for the Entrepreneur website “One of the most common reasons why a startup fails is that its entrepreneurs live in a vacuum. It’s easy for entrepreneurs to become so focused, so wrapped up in their own vision, that they lose perspective.” You think that you can bring the perfect solution into the market and that if you develop a very good product then you can raise enough money to bring it into the market.
Whatever the reason, try to reflect and Don’t Overdo It!
The first secret to your startup success
What is an MRP
At The Startup Race (TSUR), we’ve developed the term Minimum Revenue Product (MRP). This is the product that you will not be proud of, but it will be solving the problem you want to solve for your clients. You must develop it really quickly, using online or offline widely available solutions such as WordPress, or cardboard for a hardware. Before you dismiss the idea of simplicity, think of Google Cardboard – at a time when most technology companies were building sophisticated virtual reality kits for professionals and businesses who could afford to pay premium prices, making it almost impossible for the everyday consumer to think any reason of using such a technology, Google used a piece of cardboard, some 3D lenses, and a smartphone. This approached allowed Google to sell it as cheaply as £15 a piece, allowing anyone to afford it. When people started buying, then they were able to provide Google with feedback to improve it. When people pay for your MRP you know you will have a valid business by the time you are ready to introduce your final product and it will also provide your startup with a cash-flow, something that not many startups have.
5 reasons why an MRP will help you succeed:
1. It will help you to focus and be creative!
Having a clear minimum revenue target means that you have a number in mind. Naturally your brain cannot rest before reaching this very clear and specific number. In order to do that, you’re going to find out that you will think of many different and creative approaches to help you finalise your minimum revenue product. Your unconscious mind will start working for you even while you sleep to figure out how your solution can be delivered in a simple package. This kind of focus and creative will bring the reason 2 why an MRP will help you succeed, knowing clearly what your product/service should be doing really well.
2. Know what your product/service should be doing really well!
In order to cut down to the chase, you will start asking yourself “What does my product need to do in its core? What value do I think my clients will pay me for?” As soon as you answer this kind of questions then you will be able to build the solution that provides the value you assume your clients will pay you for.
3. It’s easy to change/improve/adapt – Pivot!
Creating something simple based on your assumptions and bringing it into the hands of your first clients will allow you to test your assumptions really quickly. Because what you’ve built is simple, it makes it easy to change, improve and adapt based on the feedback you receive so you can really quickly deliver the next version of your solution into the market.
4. It can provide you with cash you didn’t have before!
When your first clients buy your MRP you will get your first cash in. This will help your startup to invest some money towards developing your product/service further and adding more value into it.
5. It will give you a strong argument when talking to investors!
Investors, especially in the UK, want to see prove that you can make your startup into a valuable business and grow. When most startups present imaginary figures and assumptions, you will have real numbers and assumptions based on real sales. It will also show to investors that you are not simply able to develop a solution to the problem you’ve identified but that there is a proven need to solve the problem you’re targeting and that you can sell it.