Startup Landscape and MVP Workshop

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On Thursday 27th October I went to the Startup landscape event at SUP46. There 19 startup-supporting companies presented themselves, in a 2-minute pitch each and afterwards everyone was invited to go and talk to the ones that they found the most interesting. Here’s what I took away from the evening, which might be useful for other early-stage startups.

STING Test Drive

STING Test Drive is a free series of workshops run by business coaches, designed to give you clarity whether you want to pull through with your business idea or rather change it. It will help you sharpen the idea to a point where execution is much more focused and efficient. In the end, you even get the chance to present your venture to a group of investors. You can get more information here on their website.

Venture Cup

Venture Cup is a platform, where you can upload your venture idea and then get feedback from other users on it. You can also rate and comment the ideas of others and in the end of the contest, the 20 highest voted Venture ideas each win 5000 SEK. If you’re curious, you can check it out here on their website. The application is open until November 8th, 2016. So hurry up, you have nothing to loose!

 

MVP Workshop

On Friday 28th October I went to the Toolbox Friday event of the Stockholm School of Entrepreneurship. This week’s topic was “MVP for Startups”. Very interesting for me, because I have just started working on a Prototype for my Sound Hub.

An MVP is a Minumum Viable Product. Its purpose it to test if there is a market for your service or product before you sink a lot of time and money into it. It is supposed to focus on the core customer value of your product. For example, if you want to see if you can sell shoes online, you can just put pictures of them on a simple web page and if someone orders a pair, you go personally to a shoe store and buy the shoes and ship them.

Here are some common objections to this method and their respective answers.

  • But this a bad product!
    • If this thing sells, then you have a market for sure. If it doesn’t you can still try to improve it. It is much cheaper to get a false negative and cancel a project that might have been successful, than to get a false positive and keep developing something that doesn’t sell in the end.
  • But we need to compete on features!
    • People buy a product mainly for its core features, everything else is just to make the customer extra happy.
  • But competitors could copy my product!
    • Don’t worry about others copying and focus on your own execution. While working on a project you will develop knowledge and intricate understanding that cannot be copied. Secrecy does not pay off and is mostly unnecessary.
  • But it doesn’t scale!
    • It’s not supposed to scale at this stage! An MVP wants to answer two critical questions: Is there a market for this product? Can I reach that market in an affordable way?

Crowdfunding

The best way to find out if there is actually a market for a product is to start a crowdfunding campaign on platforms like Kickstarter, Indigogo or Fundedbyme.

For this, it is recommended to determine the price you want to sell your product at and set that as the pre-order price. Then you need to find manufacturers and figure out how many devices have to be produced to get the price per unit down to the pre-order price. That way you just break even. That amount of pre-orders times the selling price will then be defined as your minimum funding goal.

But before even starting a Kickstarter campaign you should already create a Fanbase of about 200 people that have agreed to pre-order within the first 3 days of your Kickstarter campaign. Because that’s the condition for your venture to get featured on Kickstarter’s front page, which is critical to generating enough attention.

If your funding goal is not reached the MVP has proven that there is not big enough a market for this product. In this case, you can either redesign or abort the project to avoid sinking more time and money into a fruitless business.

Final Notes

The Stockholm School of Entrepreneurship also offers a Fellowship program that comes with access to seminars and a free co-working space right in the center of Stockholm. Applications can be filed here on their website.

One last recommendation is this free online Course on “How to start a Startup”, which contains almost 17 hours of high quality content presented by successful founders of Million Dollar Businesses. Hope you enjoy!