In our last article we introduced you to the idea of the Minimum Viable Product (MVP), and covered some of the internal challenges that often arise when you prepare to share a beta version of your idea.
An MVP isn’t just a quick, cheap version of your product that you’re releasing because it’s easy. On the contrary, it’s a test you’re running to validate your idea. Releasing an MVP is only valuable if you use it to test a hypothesis about your offering, and to clear up existing uncertainty about your business plan.
Therefore, it’s not enough just to release an MVP; you also have to gather data in the process. In this post, we’ll teach you what questions you need to ask yourself to find the right metrics and collect valuable data that will help your business move forward.
Make Sure You’re Answering the Right Question
Design your tests with reference to the unmet need you’ve identified, and the untested assumptions that represent key risks to your business.
Throughout the process of creating and testing your MVP, you should refer back to the original pain point you identified—the frustration or unmet need that you perceive in your target market. And you should have a very clear idea of the principle untested assumptions which stand in the way of you satisfying that pain point; these represent the main risks that your idea will fail. Finally, the tests you develop should be very straightforward and directly applicable to your interaction with your potential market.
In the example of Zappo’s Shoes Founder Nick Swinmurn, his customers’ pain point was something like, “I hate having go all the way to the shoe store, only to find they don’t have my size.” The major risk to his idea for an online shoe store was that people wouldn’t trust online-ordered shoes to fit right, subjecting them to even more headaches with long replacement shipping times and the hassle of returning ill-fitting shoes. This led into the question he tested through his MVP: “Are people willing to try buying shoes online?” He then tested that question with his market as follows: “How many people will decide to buy brand-name shoes at a test website I set up?”
Actionable Metrics vs. Vanity Metrics
Vanity metrics have very little to do with your idea’s viability.
Once you have a firm grasp on the question your MVP will answer, you’ll want to make sure the elements you’re measuring in your test actually have meaning. For this, it’s important to understand the difference between actionable metrics and vanity metrics.
Vanity metrics are measurements that might make your idea seem like a good one, but actually have very little to do with its viability. A good example of this would be the number of Twitter followers you’re able to attract to a newly launched restaurant. It’s great to have Twitter followers, but that number gives you no information about the viability of your restaurant itself.
Actionable metrics are the measurements that you should let guide your decision making as an entrepreneur. While they might not always make you feel warm and fuzzy, they are what you need to actually validate your ideas. While social media follows might be a vanity metric for a restaurant, they could be a crucial actionable metric for a different business—say, a blog funded by banner advertising. Conversely, some measurement of customer satisfaction, and of daily operating profit, would be crucial metrics for a restaurant.
Not Sure What You Need to Measure?
We’d love to hear about your business idea—and we’d love to help you brainstorm great ways to validate it! Drop us a line on our Contact page.
Image Credits: Andrew Dawes