Outlander VC invests at the earliest stages, which means that most of our portfolio companies are pre-revenue and pre-product businesses. All of these early-stage startups follow a similar trajectory: First, founders must turn their idea into a reality by building a Minimum Viable Product (MVP). Then, it’s mission-critical to get that MVP into your potential customers’ hands to test and validate. Based on this feedback, it’s time to iterate until you’ve built a product your customers are willing to pay for, and viola: revenue!
Effectively developing your MVP into a full-fledged product requires a lot of prioritization. Rome was not built in a day, and your solution won’t be either. After advising countless early-stage founders through this process, I’ve distilled this process into three distinct phases: designing, building, and iterating. Here are the most important considerations and most common founder pitfalls for each stage:
Phase 1: Designing
- First and foremost, understand the objective of your MVP. Think of your MVP as an experiment: its purpose is to validate your hypotheses and gauge market interest. As such, your MVP should be the stripped-down version of your envisioned product, containing only the core features and functionalities required to solve a specific problem. By focusing on the essentials, you can quickly and cost-effectively test your product idea before sinking significant time and money into product development.
- Quantify what “success” looks like before you build. To prove your solution is viable, define clear and measurable objectives for its initial iteration. The data you collect from your MVP will validate whether your product solves a real problem for your target market. These objectives should ladder up to your North Star Metric and will serve as your initial KPIs. Keep in mind that you will use this data to demonstrate the feasibility, viability, and early traction of your product concept to attract investors or potential partners.
- With MVPs, simplicity is key, and done is better than perfect. In fact, your initial product should be somewhat terrible because it was built as quickly and efficiently as possible to get it into the hands of someone to give you feedback. You do not want to spend a year or two in development only to get it in customers’ hands and realize you’ve spent a long time building the wrong product.
Phase 2: Launching
- Attract initial users. After you’ve built your MVP, it’s time to get beta customers to test your product and provide feedback. Move quickly to get your MVP into the hands of potential customers. Consider offering trial versions or beta programs to attract early adopters and gather feedback.
- More users = more data. Be wary of spending too much time in stealth mode. Limited beta user access testing also limits the amount of data you can collect. I often hear early-stage founders say things like, “I have ten people on a trial right now, but I have a hundred waitlisted!” Why are those hundred people not on a trial, too? More people testing your product earlier gives you better data to build faster.
Phase 3: Iterating
- Data-driven development is the key to growth. Establish continuous feedback loops with your users to collect insights and validate assumptions. However, do not lose the forest for the trees, and don’t act on every request. Instead, quantify the aggregate feedback from users and compare it to your analytics and metrics around user engagement, retention, and conversion rates. Leverage these data-driven insights to determine the best ways to enhance your product. When in doubt, always prioritize new feature developments by their impact on your North Star Metric.
- Balance scalability and stability. User needs will evolve with your product, so you’ll need to prioritize development efforts accordingly. As your user base grows, focus on optimizing your infrastructure and ensuring your product can handle increased demand while maintaining stability and performance.
Early-stage product development is critical for turning your vision into a successful business. But the transition from MVP to full product will not happen all at once! Instead, you will gradually evolve your MVP into a full-fledged solution based on market feedback, scalability requirements, and business goals. And by following the steps outlined above, founders can effectively validate their assumptions, gather user feedback, and iterate toward building a robust product.
Remember, the key is to get your product into the hands of users as quickly as possible, gather feedback, and leverage data to fuel growth and, ultimately, achieve your startup’s North Star Metric.