What is the one thing your company exists to do – that you do better than any other business on the planet?
It’s a big question, but an important one. And its very premise runs counter to the instincts of many entrepreneurs who continually try to be everything to everyone – and thus end up providing little value to anyone. It runs counter to the instinct to add new features and services to your core offerings in an effort to chase what your customers might want (or, worse, what you think is cool). But in fact, what separates successful businesses from failing ones isn’t the knowledge of which bells and whistles to add; it’s recognizing which features to eliminate. Hence the wisdom behind the Minimum Viable Product (MVP) and the Minimum Viable Service (MVS). The MVP is the product—and the MVS, the service—that delivers the greatest return on investment for the least amount of risk.
That might not sound like a big deal, but in fact, it’s astonishingly powerful. Besides promising the greatest ROI with the least amount of risk, a Minimum Viable Product allows the entrepreneur to collect the greatest volume of feedback from customers with the least amount of effort. Done right, an MVP can unlock billion-dollar markets.
When the digital-file-sharing company Dropbox first began, it was just two guys and a simple question: “If we can make sharing files across devices easier than anyone else, will customers give it a try?”
They weren’t proposing the best file-sharing tool or the one with the most features. They were only proposing the simplest. It’s the embodiment of that powerful three-word business plan: Do less, better.
Perfection is achieved not when there is nothing more to add, but when there is nothing left to take away. — Antoine de Saint-Exupéry (French Writer, 1900–1944)
These two guys had a great and simple idea, but the odds were still stacked against them. They planned to enter a market in which they’d be competing with Microsoft, Google, and Apple. Meanwhile, the Dropbox founders were just two guys nobody had ever heard of.
So how did they make their start? With a video that made the new company’s value proposition crystal clear: effortless file sharing across a variety of platforms. It was also carefully crafted to attract a techie crowd—in other words, precisely the people who would be the most likely early adopters of such a technology. The video was just three minutes, and it was full of inside jokes that the techie audience loved. Then there was a simple landing page where viewers could log their names and e-mail addresses to become the first wave of Dropbox users.
The two founders launched the video and watched their list grow.
In no time, they had five thousand people, then seventy-five thousand. Boom! No focus groups. No surveys with potentially biasing questions. They had seventy-five thousand people who didn’t just say they were interested, but who had actually taken an action to show they were interested, by putting down their name and e-mail address.
Armed with rock-solid certainty that there was a market for their product, the two founders got to work. But did they build out their own servers and develop a product with a ton of features that would work on every imaginable platform? Nope, they sure didn’t. They built an elegant MVP.
Rather than create their own servers, they simply rented space from Amazon, and then built an interface that would allow users to easily move their files onto Amazon’s servers, and then back to their devices again. Did it work on every major platform? No. Was it the most secure system in the world? No. Did it have features for collaboration and ways to prevent two people from editing the same file at once? No. But what it did do, it did well. It just worked.
Then the two founders listened. Carefully. They collected data from their initial user base to keep improving the product, day by day, week by week.
Customers flocked. In 2008, they had one hundred thousand users. In fifteen months, by January 2010, that number had shot up to over four million. By May 2012, it had reached fifty million, then more than one hundred million, and over two hundred million by the end of 2013.
By the end of 2015, Dropbox was valued at over $10 billion.
How did this lean start-up outcompete big-time challengers like Microsoft (SkyDrive and SharePoint Online), Google (Google Drive), and Apple (iCloud)? By maintaining a laser focus on one simple sticky note in the Value Proposition on their Business Model Canvas: “Ease of Use.”
To this day, one of Dropbox’s biggest competitive advantages is how seamlessly it works across a tremendously wide variety of devices. Over time, Dropbox has expanded to more and more platforms, and has added more and more features, but it’s never compromised its core value. It just works.
Done right, an MVP, a system for validated learning, and the power of focus, unlocks billion-dollar markets.
At Agents of Efficiency, we exist to unlock the power of focus for our clients to yield tremendous ROI. See how.