With the recent push for the whole lean start-up movement (#leanstartup), I want to discuss a product development buzzword that I like: Minimum Viable Product (MVP).
Eric Ries (@ericries) popularized the term MVP, and defines it as the, “version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
I’ve seen many startups and entrepreneurs follow the lean startup MVP technique but then they’re disappointed or confused what to do next with their findings.
As a founder, product manager, SCRUM master, and/or developer… this is the typical flow of events:
- Wireframe out your MVP (I use, love, and recommend Balsamiq)
- Code out the MVP
- Throw a big “Launch Day”, “flip the switch on” party, pop some champagne, and high five each other
- But then what…? Apply to a Y Combinator/TechStars type of incubator and hope you get in with your MVP? Hope for a TechCrunch article to show up about your MVP? Get on the fundraising road and hope to raise VC money with your MVP? Hope for Twitter-like, hockey stickin’ traffic, traction, and inflection points to show up in your Google Analytics?
Sound familiar? Especially #4? I’m thinking we need to add a couple more steps to the lean startup playbook.
Here’s what I’m proposing:
- Build the Minimum Viable Product (MVP) and they will come.
- Build the Minimum Lovable Product (MLP) and they will stay.
- Build the Minimum Buyable Product (MBP) and you will stay, in business.
- The fastest growing music service you’re not using
- MMLOA (Massively Multi-Listening Online Audience)
- Your new music discovery crack
- Hockey stickin': 0 to 140,000 users in their first month
- Napster, reborn again
- The first web service that gives me the sense of physically hanging out with friends while online
TurnTable has many exciting revenue opportunities:
- Visual and audio ads – Just like Pandora’s audio ads between songs and advertising wraps on their website and mobile
- Premium subscriptions – Just like Pandora One ($36/year) – unlimited listening, no ads, higher quality audio, etc.
- Affiliate commissions & lead gen – Shazam pushes $100MM+ in purchases towards iTunes each year. Turntable could blow that away.
- Virtual goods/avatars – If Zynga can make millions selling virtual corn in FarmVille, TurnTable can too.
- Social DJing software – Could be sold to clubs and party hosts. Allow your customers or guests to spin their own tracks via their mobile phones.
- Virtual currency - Allow listeners to spend this currency within the TurnTable world. Avatars, virtual concert tickets, more DJ plays, customized rooms, more points, less ads, etc.
- Promoted songs – Like how StumbleUpon sneaks in paid websites as you “stumble” across the internet, TurnTable could push certain songs/artists to listeners throughout various rooms
- Let DJs sell their original creations – Sometimes I come across amazing home brewed remixes and original creations uploaded on YouTube. These small time artists/DJs have a tough time selling their creations primarily due to a lack of a distribution platform. Turntable.fm could become that. TurnTable could let the DJs sell their original music on Turntable.fm (while taking a cut). I’m not considering any complexities due to copyrights (think Girl Talk and his copyright ownership issues he has with his songs – which are basically a bunch of copyrighted songs mashed together).
- Sponsored Rooms – Nascar makes a killing off companies sponsoring drivers and cars. Sports stadiums sell the name of their venue to the highest bidder. Why can’t we have Red Bull Rock Radio? DJ Wooooo’s Dance Dance Revolution?
- Selling data and music trends based on user demographics - User, usage, and trend data = $$$
- Paid Rooms / Concerts – Artists & DJs could buy accounts and rooms, similar to the Pro version of uStream.
Talib Kweli could host live concerts with other artists in one giant, online, virtual stadium:
Downsides to TurnTable.fm right now:
- There’s an initial 5-10 minute “learning curve”
- Interaction is practically forced/required, you essentially need to babysit it all day
- Sometimes it’s hard to find a room where I like the type of music being played – maybe they can setup preset rooms/channels like SiriusXM radio has channels 1-240. Top 40 Hits = Channel 1, ’90s Pop Hits = Channel 9, etc.
How TurnTable can fix their “problem”
Allow listeners to select from 1 of 2 options:
- Synchronous listening (TurnTable’s current version today)
- Asynchronous listening
An asynchronous version of TurnTable would simply require tuning into a specific listening channel, kicking back, and listening:
- Cut out all the gamification and real-time-ness of it all. No head bops, no chat, no points, etc. Simply choose a channel and you’re presented with a play and pause button (maybe some lightweight features such as “Faving” and thumbing up and down, but that’s it. Much simpler.)
- Eliminates the “learning curve” and confusion
- Eliminates the urge to babysit it all day
- Still keeps the uniqueness of real DJs and crowdsourcing of song selection
- TurnTable = Crowdsourced
- Pandora = Algorithm based, heavily programmed towards your own music taste (The Pandora Music Genome Project)
- Last.fm = Algorithm based, heavily programmed towards basic artist linking (e.g. same genre, similar year)
- Online Radio = One radio station DJ selects and pushes songs out to listeners. Zero customization. Often mainstream and not very unique.
TurnTable.fm Going iPhone
“Hey TechCrunch — you scooped yourselves. We were saving this as a surprise for TC Disrupt when I’m on stage :)”- Billy Chasen (CEO & Co-Founder, TurnTable.fm)
TurnTable.fm Going iPad
Get your free TurnTable.fm Invite here!
My last post reminded us that ideas are just a multiplier of execution, therefore the equation every entrepreneur and investor is trying to solve for is:
Business = (Idea x Execution) + Passion + Luck
AWFUL IDEA = -1
WEAK IDEA = 1
SO-SO IDEA = 5
GOOD IDEA = 10
GREAT IDEA = 15
BRILLIANT IDEA = 20
NO EXECUTION = $1
WEAK EXECUTION = $1,000
SO-SO EXECUTION = $10,000
GOOD EXECUTION = $100,000
GREAT EXECUTION = $1,000,000
BRILLIANT EXECUTION = $10,000,000
To make a business, you need to multiply the two.
The most brilliant idea, with no execution, is worth $20.
The most brilliant idea takes great execution to be worth $20,000,000.
Passion fuels you through challenges and determines how hard the company engine is working.
Luck is the wildcard you just have to accept as an entrepreneur or investor.
Investing in Startup Businesses via Incubators & Accelerators
There’s a trend of the so-called Y Combinator model (e.g. TechStars, LaunchBox Digital, DreamIt Ventures, Capitol Factory, 500 Startups, Founder Institute, etc.) and it’s on the rise. Nowadays, it seems everyone is starting up their own startup incubator/accelerator program:
- Venture capitalists – Highland Capital Partners’ Summer@Highland; Spark Capital’s Start@Spark
- Angel investors – David Rose’s SparkSpace; Bob Summers’ TechPad
- Universities – University of Illinois’ EnterpriseWorks; University of Texas’ Austin Technology Incubator
- Corporations – Google’s Google Ventures Startup Incubator; Facebook’s fbFund; BMW’s i Ventures
- President Obama – StartUpAmerica is helping TechStars to become a national “open sourced” incubator network
- Even city governments! City of Portland’s seed fund
These programs are great and I love them (My company, Koofers went through LaunchBox Digital ’08 as part of their first graduating class and now I’m working out of TechPad), but these investors are investing in businesses, not just ideas. Remember the equation from above? Businesses require both an idea AND executors. That’s why many investors always stress that they’re not just investing in the business idea, but the founders and team behind the idea, a.k.a. the executors.
Investing in Ideas – VCs?
VCs who don’t want to setup an incubator type of office space fully equipped with pizza, beer, and ping pong tables are trying to get into the action via seed investments. Sequoia Capital, a billion dollar fund tries to invest in seed rounds so they can “get in early” on great ideas that could blow up if executed on correctly. Heck, they even claim to invest in ideas!
When I saw “Ideas” as a link on Sequoia’s main nav menu, I got super excited, thinking, “Cool! A giant VC fund will hear my idea out? Awesome, let’s do this.” After I clicked the Ideas link, my excitement quickly vanished as I was greeted with a giant <h1>Writing a Business Plan</h1> followed up with “Submit a Business Plan” call to action button. I clicked a link entitled “Ideas” yet it took me to this MBA-like business plan page filled with phrases like:
- Sustainable business
- Clarity of purpose
- Large market
- Rich customers
- Pain killers
- Team DNA
- Business model
Yuck! I just wanted somewhere to submit my idea, not a 25 page business plan. Sequoia, if you’re out there listening, I suggest changing that link from “Ideas” to “Business Plans”.
Good Ideas are Valuable
All the Y Combinator modeled incubator programs spend hundreds of hours sifting through ideas to find the “good ones”. Many businesses (small and large) have brainstorming meetings to see if their employees can come up with good ideas for whatever project they’re working on. So why isn’t there a business that is designed to take in ideas and turn those ideas into money?
Places to Submit Your Ideas Today
- HighDEAS – Sure, these are ideas people had when they were high, but there are actually some good ones in there. For example, “Soda fountain machines should give out ice cubes with the same flavor as your soda“. Not a bad idea! I’d pay 5 cents more for my drink to have “Coke Cubes” instead of standard water cubes that will eventually melt and make my Coke taste all watered down.
- The Internet Wishlist – Ideas for apps and websites people are wishing for.
- My Starbucks Idea – Share, vote, and discuss ideas about Starbucks and the coffee experience
- Google Product Ideas – A suggestion box on ways to improve Google’s current products
- Pepsi Refresh Project – Pepsi is funding amazing ideas that refresh the world. However, if your idea wins, you have to actually go out and act on your project idea.
Quirky – Social, Crowd-sourced Product Development
My idea is to have some kind of company that incubates ideas and finds a way to monetize off them (ideally even paying the idea makers back for their contributions).
The only company that I know that does this today is Quirky (and they’re still a young startup. Founded in 2009). Their process works like this:
- Submit your product idea to Quirky.
- Ideas are rated, sorted, voted, picked, and refined by the Quirky user community. Every week the top 10 are assessed and 2 ideas are selected for the week.
- Expert product designers, researchers, and engineers develop working prototypes of those 2 product ideas.
- Quirky handles all the logistics (research, mechanical engineering, patents, manufacturing, packaging, shipping, etc.) and foots the entire bill
- Every unit of the product that is sold, all the community members who influenced the development of the product with their ideas are paid out accordingly
Quirky empowers average people with above average ideas to be financially paid out for those ideas.
Can the Quirky model of user generated and crowd critiqued ideas make it into other industries besides the product development world?
Large Companies Don’t Want Unsolicited Ideas
- Apple’s Unsolicited Idea Submission Policy
- eBay’s Unsolicited Idea Submission Policy
- Bank of America’s Unsolicited Idea Submission Policy
- Zynga’s Unsolicited Ideas Submission Policy
- Chick-fil-A’s Unsolicited Ideas Submission Policy
Just Do It Don’t Do It
A devoted and passionate customer of Nike turned to Nike’s support forums to contribute an idea he had:
24 hours later, a Nike employee responded with a something along the lines of, “Hey, don’t send us any ideas. We will only listen to any ideas that you personally own a patent to. Thanks, but sorry.”
Come on, really? Some of the best ideas may be thought up by average consumers while taking a shower or riding the bus. What if Nike never invented the wireless chip you put in your running shoes to track your every step? Maybe an avid runner could have had the idea and could have submitted it to an “Idea Bank” type of company.
What if a casual beer drinker thought he had a cold beer, started drinking it, then realized it was actually quite warm (even though the glass initially felt cold) and was disappointed because it wasn’t cold enough. Maybe he would have come up with the label that changes colors once your beer is cold enough idea. Sound familiar Coors Light? Cold activated Blue Mountains label.
These are just some examples of what could have been thought up by an average person (not a full time employee of a company). I’m sure there are thousands of genius ideas floating around in people’s minds right now, but no company wants to hear them (or won’t hear them due to legal reasons).
For starters, why isn’t there a Digg-like website (voting system) that allows people to submit cool website/startup ideas? Programmers who just want to create something interesting and fun could check into the idea list and if they saw something that interested them, they could go program it. I bet all kinds of cool and interesting sites would show up within days.
I understand many entrepreneurs are very protective about their self-proclaimed “genius” ideas and often won’t tell anyone what it is because they’re afraid someone else is going to steal their genius idea and make millions off of it. But look, Bill Boebel’s not afraid to share his ideas. Neither am I. I’m sure there are many more “idea freelancers” out there willing to shoot ideas out. I understand that the lawyers of all these companies are simply trying to protect their business with these unsolicited idea submission policies. For example, if an Apple fanboy E-mailed Steve Jobs in 2001 detailing an amazing idea he had for a really cool MP3 player, that would be bad legal news as Apple was in the middle of developing their killer MP3 device, the iPod.
Let’s Think Different
Let’s embrace the wisdom of crowds. Let’s realize as a business and tech world that the many are smarter than the few and that collective wisdom can truly shapes businesses for the better.
This is my idea and one of my first blog posts to document it. Maybe the idea sucks. Maybe it’s good.
I need to hear feedback from the community. Isn’t that the whole idea of my idea?
Comment below or jump over to the Hacker News thread at http://news.ycombinator.com/item?id=2826916