Minimum Viable Audience
Yesterday in Bad Ideas Are Good, Good Ideas Are Bad we discussed that the solution doesn’t lie in getting better ideas and creating better plans but rather in presenting a rough draft to a subset of the market and using an iterative process where you’re constantly tweaking your idea and going back to the market ad infinitum.
That’s all fine and dandy but how exactly does one go about doing this?
Once you have the inkling of an idea for a startup or a new product line, your first step is to see if you can validate it.
The litmus test for this is:
Can you find 3 people who’ll give you money for your idea before you’ve done anything within 7 days?
The mistake yours truly has made and you’ll make as well is that you’ll postpone this test. You’ll make a website, get business cards, design a logo, invest time and money in infrastructure and do anything and everything to postpone asking people for money.
You’re scared it won’t work and you want everything to be perfect upon launch.
I still haven’t figured out precisely what cognitive malfunctions causes virtually all humans to make this mistake but Steven Pressfield calls this ‘The Resistance’.
The problem is that you’ll either quit in the process or you’ll finally launch after months or worse even years, having spend thousands of dollars in actual money as well as opportunity cost only to finally discover that nobody wants what you’re selling.
If people don’t want your diamond in the rough, they’re not gonna want your polished diamond.
This mistake is not unique to startups. Many of the biggest companies have made this mistake as well. Google Wave, Pets dot com, The Ford Edsel.
But why? It seems so logical. Surely you should have all your ducks in a row right?
Yesterday, I was talking to Tijn an awesome friend and he made a casual remark about ‘crossing the bridge when we get to it’ in his company.
And that’s precisely the attitude you need to have.
The reason why is that if you invest time and money in ‘getting all your ducks in a row’, you’ll start building a skyscraper on an untested foundation.
Your skyscraper in this analogy is the perfect product and the foundation represents your untested assumptions. The likelihood of those being wrong, are so high that it’s better to just assume they are wrong from the get and incrementally get to ‘right’ by continuously asking for feedback and tweaking your product or service based on that. (This is exactly why business plans are useless.)
You want the market to pull the product out of you (which I’ll talk about tomorrow in ‘The Elusive Product-Market Fit’.
And the way you do that is by making something people love.
3 people willing to give you money within a week is a good test to see if you’re on to something because people lie but their wallets don’t.
(It also helps you not to postpone profitability. In the current startup culture, this is often frowned upon because it’s all about growth. But I think it’s better to be just below profitability and be able to turn a profit should you choose to then it is to not have a business model at all and praying you somehow find one before your VC money runs dry.)
After you’ve validated it you need to find your minimum viable audience.
1 person who loves your product is unlikely to make the economics of the business works. (And it’s always never a good idea to give that much power to extremely few users because it creates high dependency.)
There’s a minimum number of people you need in order to operate an efficient business. A minimum viable audience represents that number.
But those are not just regular customers. These are people who love your product. They’re your tribe. Just in a high enough quantity that you’re able to sustain your company.
Your goal should not be scale in the early days. Your goal should be to notice an idea, validate it and then to build your minimum viable audience.
Your intuition will tell you to acquire the largest amount of users you can possibly get your hands on instead of building your tribe.
But this is a mistake because you need to create a solid foundation for your skyscraper first and you do that by going small instead of big first.
You know you’re on the right track when the market starts pulling the product out of you and people are banging on your door to get it. This is the work of your tribe who loves you (and you them) spreading the word about what you do.
It’s easier to scale from a small tribe who loves you, then an enormous crowd who likes you.
So go build your tribe.
