Article provided by Discovery Business Insurance.
Niket Desai who, at 23, sold his company to Google and now oversees a US$120-billion fund in Silicon Valley, shares his key ideas on creating a successful MVP or minimum viable product. This is a technique in which a new product is developed with just enough features to prove the concept.
The acronym MVP could also stand for most valued player, and this is what a minimum viable product is to a small business. Niket Desai, who created a start-up customer loyalty program with friends while at the University of California Berkeley, says creating an MVP starts with a simple idea. The business owner then has to prove how this simple idea could work, before it actually exists.
He obviously got it right, because the idea, Punchd, an iPhone app-based loyalty card for coffee shops, was eventually bought and scaled by Google, arguably the largest tech company in the world.
“With a dear friend of mine Reed Morse, an engineer who prototyped Punchd, we had grand aspirations of what it would be like if everyone had one of these apps on them at all times and how it would change the way that we interact with stores and commerce,” he says.
It starts with a need, he says. “It was 2007, and we saw there was an incomplete solution. Businesses want to attract more customers and they have rewards programs in physical form. This new phone [the iPhone]allows you to connect with your customers at any time. Whereas a card in their wallet, a static item, if you’re lucky they open their wallet and think to themselves, ‘Oh, I should go to that store’. But a phone can quite literally give you a notification on behalf of that store.”
The app could send notifications to customers about deals or events. “We knew it was the future, we just weren’t entirely sure how it would look,” says Desai. But the team developed a product, their MVP, and literally walked the streets of San Francisco selling it.
“I basically went to a coffee shop in my neighbourhood and offered this product. The owner at first was kind of sceptical but when I sat down and talked through it with him, he said, ‘Let’s give it a shot’.”
It is always toughest at the beginning
“Most entrepreneurs will remember the early days because of how unrewarding they can be. Everything is so difficult. But the entrepreneurs that have become successful also yearn for the early days because once it gets going, it is a machine. When I saw customers legitimately getting excited that there was a service they could use instead of putting another card into their wallet, they were essentially parroting our value proposition without any type of marketing,” he says.
But the early days also see unrefined practices and plans. They created a complicated dashboard for business owners to track the rewards, which could have been a simple text message. “Now I know, before you design an [MVP] you need to study and work with the people who are going to use your product. Having that design empathy at the beginning of the building of a product can be useful, because you can get on track much more effectively earlier and spend less time wasting resources, which we still managed to do!” he laughs.
Timing your presentation is the other important factor. “The only time I could really speak to business owners was for 10 to 15 minutes after the lunch rush and right before closing. So I had a limited window of approximately an hour every day.”
Sometimes he adds, thinking smaller is better. “We often get excited about the macro ideas, the next big thing. But all of these ideas started at some point with just making sure that what you’re building is fundamentally important to one person in an extraordinarily large way. If you don’t start with that, then you don’t have the foundation to build something that can be important for many people, in my humble opinion.”
Getting the people factor right
Desai left Google at age 24, to work for Flipkart in India. He said the biggest learning there, was to create for people in your own country, first.
“The opportunity for Africans to serve Africans is paramount. Whereas the two largest economies in the tech context – India and China are being served by countries and corporations from other countries – Africa doesn’t have that type of investment yet. That actually suggests to me, which I felt very strongly in India, that Africa should be served by uniquely African companies,” says Desai.
He suggests using localised knowledge, “multiplied by a tenacity for building something for people faster and better than anyone, then actually growing that economy locally”.
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