Hey guys! Welcome to another episode of Lifestyle Business Weekly.
Today we’re talking about three typically “startup” concerns: unicorns, growth hacking and minimum viable products. But wait! Stick with me because these issues are just as important for bootstrappers and lifestyle entrepreneurs.
Watch today’s episode here:
Listen to This Episode
Transcript of Today’s Show
Up first today, David Heinnemaier Hannson from Basecamp dropped a bomb of an article last week. David (or DHH as he’s known) is co-founder of Basecamp (formerly 37Signals), and creator of Ruby on Rails. DHH has been a big proponent of bootstrapping and creating “real businesses” as opposed to venture-backed startups.
His latest article called RECONSIDER, which was actually written as a talk for WebSummit 2015, a tech conference in Dublin, absolutely exploded on Medium last week, with over 6,000 recommendations.
In the article, DHH makes some scathing observations about venture capital and the startup culture of silicon valley we hear so much about these days.
Well, the reason I’m here is to remind you that maybe, just maybe, you too have a nagging, gagging sense that the current atmosphere of disrupt-o-mania isn’t the only air a startup can breathe. That perhaps this zeal for disruption is not only crowding out other motives for doing a startup, but also can be downright poisonous for everyone here and the rest of the world.
Part of the problem seems to be that nobody these days is content to merely put their dent in the universe. No, they have to fucking own the universe. It’s not enough to be in the market, they have to dominate it. It’s not enough to serve customers, they have to capture them.
He goes on to compare the venture capital ladder to a multi-level marketing scheme. He’s outrageous as usual, but I don’t disagree. Venture capital is nothing more than greed, the sole purpose of which is to turn $1 into $10. When you accept VC, you buy into a limited view of what business should be: a vehicle for making a handful of people rich.
I’ve seen venture capital ruin otherwise fantastic businesses, in the name of unrealistic growth and the required pursuit of the next round of financing.
But the point of David’s article isn’t just to bash venture capitalists. His plea is to ask you to question your motives as an entrepreneur.
In describing his own business, DHH says:
I’m going to pull out another trite saying here: It feels like honest work. Simple, honest work. I make a good product, you pay me good money for it. We don’t even need big words like monetization strategy to describe that transaction because it is so plain and simple even my three year-old son can understand it.
He goes on to say:
I wanted to work for myself. Walk to my own beat. Chart my own path. Call it like I saw it, and not worry about what dudes in suits thought of that. All the cliches of independence that sound so quaint until you have a board meeting questioning why you aren’t raising more, burning faster, and growing at supersonic speeds yesterday?!
As I said in my talk to Pioneer Nation last month, how you build your business matters as much as what you build. Building a business can be the foundation of an amazing life and a deep sense of satisfaction and self sufficiency. But you have to set your priorities.
Letting greed dictate your decisions doesn’t guarantee financial success, and it definitely won’t lead to happiness.
Anyway, this is an excellent article. You should check it out for yourself.
Growth hacking is BS
Now let’s talk about growth hacking. If you’re unfamiliar with the term, Sean Ellis defined a Growth Hacker in 2010 as “A growth hacker is a person whose true north is growth.”
Most big startups have a growth team now, which is usually a cross-disciplinary team involving marketers, product people, developers and more. These teams take on projects that should lead to growth for a company, either revenue growth or user growth, or both.
The problem with growth hacking is that it’s easy to become obsessed with individual tactics that sacrifice long-term health. For example, you might use advertising or SEO to grow your userbase, only to find the customers you find aren’t good for business long-term.
Or, your might focus so much on one growth tactic that you lose sight of the real value your business needs to provide. Instead of bolting on some growth tactic, you’d probably be better off just building a better product in the first place.
Two members of the growth team at Intercom put together a fantastic talk called “Growth Hacking is BS.” In it, they share some of the most effective growth strategies they’ve implemented at Intercom, and how to focus strategically on growth instead of tactically. There are some great tips in here about pricing and onboarding.
7 Truly Simple Minimum Viable Product Ideas for Your First Product Launch
And finally today, let’s talk about minimum viable products.
You’ve probably heard the advice: when creating your first product, you should aim for a minimum viable product. In other words, the smallest thing you can put out in the world to test whether customers really want it.
The minimum viable product (MVP) can be such a useful approach, but it’s also often misunderstood. We launched Fizzle using the MVP approach in just 7 weeks. The key is that your MVP is just a starting point. It’s meant to be a conversation starter focused on filling one specific need.
After launching your MVP, the real work begins. From there you talk to customers and find out what they like and don’t like about your meager attempt. You iterate quickly and try to improve with every step.
This approach follows the “Rome wasn’t built in a day” adage. You might have some grand vision for your product ultimately, but getting there will take longer than you think. The biggest risk you face as an entrepreneur is spending lots of time and money on a product that nobody actually wants. By launching an MVP, you cut this risk by getting real world feedback from real customers as early as possible.
But what does a good minimum viable product really look like? How many features should be in your MVP? When do you know your first product is good enough to launch?
To clear up some of these questions, I put together a list of 7 really simple Minimum Viable Product Ideas for Your First Product Launch. These are specific examples of how you would turn a big product idea into a quick and dirty first version, that leads to sales and customer feedback as early as possible.
For example, let’s say you wanted to write a book. If you want to write a book, it’s a huge undertaking. Months and months of work go into the typical print book.
A shorter electronic book would take less work, but it could still potentially be weeks and weeks before you get feedback and know whether all that effort was warranted.
Instead of writing the entire book and launching the final product all at once, why not release your book piece by piece, idea by idea and get feedback all along the way?
This is partly how Intercom has created several great ebooks on product management, customer engagement and customer support. Many of the best chapters and ideas in these three books came directly from blog posts that originally appeared on the Inside Intercom blog.
Ebooks are created like this all the time. Darren Rowse of ProBlogger sells a book called 31 days to build a better blog, that was originally a daily blog series.
This is just one concrete example of a real-world minimum viable product. Get the rest of the list, just visit corbettbarr.com/10 for the link to my 7 simple MVP ideas and the rest of the links mentioned in this episode.