START-UPS: An MVP without an MVV is doomed.

Starbucks used a bag of beans to find their sweet spot, what’s yours?

When Starbucks was a Start-up, it was just another coffee company trying to make a name for itself.  But Starbucks did something strategic to up their value guarantee credibility in the market that set them apart from everyone else. 

They were willing to give anyone who was not totally satisfied with their product and services a free bag of coffee beans. Starbucks came across as a company that was willing to put their customers’ needs first.  That’s “walking the talk,” and now they’re a global household name. 

MVV is the new MVP. A Start-Up’s minimum viable product (MVP) without its market's minimum viable value (MVV) makes it hard to succeed, but with an MVV, it’s hard to fail.

The Bad News First:  Most Start-Ups never really take off!

Look, let’s face it: Most Start-Ups and MVPs are doomed to failure.  Only 10% survive, and less than 0,1% ever go on to thrive or lift-off. Those odds are bleak, but it’s interesting to know what all the thriving Start-Ups and corporate innovators have in common:  They all found the sweet spot in their target markets and reached something called PMF (product-market fit). 

What the heck is that?  Well, we can answer that from 4 different perspectives:

1. Target Market perspective = Product-Market Fit is achieved the moment your new product offering becomes a market MUST HAVE.

1. Start-Up perspective = Product-Market Fit is achieved when your Minimum Viable Product(MVP) satisfies the Minimum Viable Value(MVV) of the market.

1. Funder perspective = Product-Market Fit is a tipping point (without PMF, it is hard to succeed, with PMF is hard to fail).

1. Scientific perspective = The moment the activity of attracting and retaining customers is no longer the weakest link or prime constraint.

This is what it means to create products and services that have evolved to become market “must-haves.”  There’s a 3-step process we use at TMARA to get your Start-Up to reach PMF, and that’s by leveraging the value that the new product can bring that sets it apart from its competitors.  Only a MUST HAVE new innovation or product stands a real chance of market adoption success out there.

"The only thing that matters is reaching product-market fit", - Marc Andreesen

Sadly, it’s not what we think of our amazing product and its potential worth in the marketplace that determines whether it becomes a MUST HAVE; rather it’s determined by the marketplace's perception of value.   So, we need to help the market perceive your innovation as a MUST HAVE.  Where do we start? The first step is to assess if your idea or new product innovation has the inherent NDA to become a MUST HAVE.  What does that look like? The answer is quite simple, the Innovation must comply with the 2 MUST HAVE principles as codified by TMARA, then captured within what is called a catalytic mechanism Continue reading for a personal story that illustrates this concept. 

Principle 1: Overcoming Limitation: Henning’s mother on the line:  A true story with a happy ending

Co-founder of TMARA, Henning du Preez shares how his mother’s adaptation to using a smartphone can serve as a good analogy of how TMARA works their minimum viable value magic.

“My mother used to rely on a landline to call us kids every week, to stay in touch.  Because the landlines and the telephones were fixed, we always had to ensure that we were at home at 7 pm on a Sunday, to receive her call.  After a few years, we managed to convince her to upgrade to a smartphone, as we all had done, but she initially saw this as an unnecessary expense.  Why get a smartphone when the landline could still do the same thing?  We explained to her that she would be able to call any of us, any time of the day now that she was using a smartphone. The previous limitation of being in the proximity of a landline was no longer applicable.  The rules had changed, and she and we were now free to be anywhere at any time.  This is how we demonstrated the minimum viable value of the smartphone to her.  Initially, it was a “nice-to-have”, but now that she uses WhatsApp and social media every day like a teenager, her smartphone has become a MUST HAVE.  

Henning’s story perfectly illustrates the 3 steps required to reach Product-Market Fitness: Intrinsic value (being able to communicate with family unconstrained by everyone’s physical location), realized value (being able to communicate with family at any time and place) and then guaranteed value (being able to use the smartphone for social media in a MUST HAVE way.   Let’s flesh this out for you some more in relation to your own Start-up.

Principle 2: Changing the rules create explosive results

We helped one of our mining clients access explosives that were far safer and more efficient than the explosives that they had been using in the past.  Historically, the mines would have to be evacuated completely for any blasting to take place, and this would consume many hours of the day.  With the new safety explosives, the blasts could be more controlled and did not require that the entire mine be evacuated.  These new explosives eliminated the safety hazards faced by the miners.  The original rules stipulated, however, that the mine had to be completely evacuated before each blast, but now this rule was unnecessary.  The rule had to be changed in order to properly extract the value of the new safer and more efficient explosives; otherwise, the maximum benefit of using the new explosives was entirely lost.  With the new rules in place, the yield from the mine could be rapidly increased because blasting and extraction could be drastically improved and sped up, and in a drastically safer environment.

Catalytic mechanism: Toothless guarantees are all bark but no bite – it highlights at best a fundamental weakness

We always ask our clients: “What is the minimum value, you are prepared to guarantee to your potential customers?” It must be a guarantee that counts (with teeth) and this means that it must set you apart and give your Start-up traction that can meet the PMF level required to become the MUST HAVE of the market. If you cannot answer the question realistically, then you are not offering anything of true value to the market, and you may be more product-centric than you are customer-centric, and this will be devastating for many.   A value guarantee that counts, means your market will willingly adopt the new rule, to extract the value you are guaranteeing. If your guarantee causes this change, you have found the market's sweet spot and is well on the way to become a market MUST HAVE.

Using guaranteed value to build a bricks business

A local Start-up we know was in the business of supplying basic clay-building bricks.  They were trying to crack the market and knew that they would have to come up with something special to offer because the competition was fierce.  They assessed a number of the limitations faced by their potential clients and realized that their customers were desperate for a financing mechanism that relieved their credit constraint together with fast delivery of the bricks that they ordered. 

This Start-up decided to offer a value guarantee that none of their competitors were willing or able to meet.  If the bricks were not delivered within 24 hours of a confirmed order, then the entire batch would be completely free!  Their business has continued to build exponentially ever since, and the very occasional failure to deliver on time, meant the business had the opportunity to fix any operational flaw, plus this once in a blue moon free load served as the very best marketing spend, which resulted in even greater success through viral word of worth.

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