The MVP of Success – Minimum Viable Product: Crash Course Business Entrepreneurship #6

Hi! My name is Anna. I like long walks on the beach and curling
up with a good book. I grew up all over, but I’m loving life
in LA, where I’m an actress and writer. My favorite summer activities include soaking
up the sun and spending time with my 6 cats. I’m hoping to meet someone who’s fun to
be around and is open to running 5Ks on Turkey day! Let’s grab coffee sometime. Imagine if the only videos on YouTube were
people looking for love. That could have been the world we lived
in! Before it had 1.9 billion users per day, YouTube
started as a video-based dating service, complete with the truly excellent catchphrase: “Tune
in, Hook Up.” If you look, you’ll find tons of these quirky
origin stories behind some of the most successful companies. But why? The reason they didn’t flop is because they
were willing to listen and fundamentally change their business when their original idea didn’t
meet the needs of their market. They were clever observers and nimble enough
to pivot. Today we’ll look at the bare minimum we
need to make an idea a business reality, also known as our minimum viable product. And we’ll be ready to pivot if things fall
flat. Don’t worry, it’ll be way easier than
maneuvering a couch up a stairwell. I’m Anna Akana, and this is Crash Course
Business: Entrepreneurship. [Opening Music Plays] I don’t know about you, but I tend to dream
big. My vision for any of my projects is in vivid
technicolor. And it’s great! I know where I want to go and pretty much
what an idea will look like in the end. But especially when it comes to entrepreneurship,
we want to take that vision of a product or service and break it up into smaller steps. Use the mantra: dream big, start small. We’ve done all the research we can in the
idea stage, so now we have to take the risky leap to the next level. Thinking strategically, we want to focus our
energy and our money on what creates value for customers, so they support us! The first iteration of our product or service
should be our minimum viable product — the simplest version that will attract customers
and maximize our learning as we launch our business. It’s called an MVP for short. And there are 3 key parts to a good MVP: It has enough value that customers want to
start using it It hints at what we’ll produce in the future
to keep customers interested, and It gives us feedback to learn from as we refine
our product or service. Basically, the MVP is like a really useful
first draft. Our goal isn’t perfection — and honestly,
it’s never going to be perfection in entrepreneurship, but more the goal is to produce a great first
offering that enables learning. Once we’ve launched a product or service,
we can start gathering feedback and implementing changes, so we can deliver more value to customers
faster than competitors. Let’s make our MVP the MVP! …*finger gun noises* To see this iteration in action, let’s go
to the Thought Bubble! Your friend Gretchen is very into fashion. And the hot new trend is special occasion
hats — wedding fedoras, Valentine’s Day fezes, Canada Day bonnets, pink berets to
wear on Wednesdays. It’s so fetch! Gretchen has been making her own whimsical
hats and wants to sell two of them on Etsy. She’s never sold anything before, but she
knows her costs per hat will include materials, basic marketing artwork, shipping, and her
time. After doing a bunch of math with some help
from her friend Kevin G — and scoping out the competition — she plans on selling each
hat for $28. They’re not the cheapest on the market,
but not the most expensive either. These two hats are good representations of
her skill and designs, they’re already popular with her friends, and Etsy allows lots of
communication between buyers and sellers (including reviews and customization requests). So with confidence that these two hats are
her minimum viable product, she takes the risk to post them! Gretchen gets feedback through comments and
reviews, and she notices that customers only seem to buy only one of her hats and wish
it had more customization options — like veils, ribbons, or feathers. She continues offering both hats, even though
only one is selling, and she ignores customer requests because their “uninformed suggestions”
don’t speak to her “creative sensibilities.” Soon her Etsy profile is a ghost town. Even though she had a solid MVP, she didn’t
learn from it. So even though hats are everywhere, no one
is wearing Gretchen’s. Thanks, Thought Bubble! To make an effective MVP and turn it into
a successful business, it’s important to put customers front and center and think about
People having an Experience. In buzzword lingo, this is applying a human-centered
approach to design-thinking. The good news is, all the entrepreneurial
thinking we’ve been doing so far is human-centered. We’re all humans [to the best of my knowledge],
and we all have small wishes about products and services that could make our days a little
easier — like wishing there was already a coaster on the bottom of every cup, or that
we could somehow reuse our favorite notebook forever. Those passions, complaints, and nagging “I
can do better than that!” feelings from our egos give us the seeds of ideas. Plus, we consider the jobs, pains, and gains
of our customers to make sure our ideas have value. Doesn’t get much more human-centered than
that! Design-thinking experts emphasize that coming
up with a good idea isn’t a linear process. It’s a jumble of loops that include steps
like: finding problems, brainstorming solutions, prototyping, testing, getting feedback, and
making changes. And I know Crash Course Business: Entrepreneurship
has been teaching these concepts in a pretty linear way, but entrepreneurship totally isn’t
a linear process. Every entrepreneur comes to the table with
different knowledge, skills, and expertise. Sometimes we recognize an idea but it takes
years to take the financial risk to start a business. Or we never do anything with the idea at all. When it comes to sketching out all the details
of our business, we have different interests too. Someone whose passion is marketing may have
cool branding, but they aren’t excited about choosing a legal structure. Or an accountant may start thinking about
the costs of their future business before investigating the competition, so they have
to circle back. Everyone’s starting point can be different! But we want to stay focused on a human-centered
approach to design-thinking as we create any product or service — especially our MVP. For example, despite great strides in global
health, some countries are still struggling to prevent parental death during pregnancy. So in rural India and Bangladesh, innovators
came up with the idea of a smart bangle — a water-resistant, plastic bracelet that gives
important pregnancy info twice a week for 10 months, without needing to be charged. The bangle also monitors carbon monoxide,
a gas that we can’t see or smell but is extremely toxic if it builds up in our blood. The bangle alerts the wearer when they’re
exposed to unhealthy levels of carbon monoxide, like possibly when they’re cooking over
wood-burning stoves. If the entrepreneurs hadn’t talked to the
women they were trying to help, they might have designed a culturally insensitive wearable,
rather than something that matches the patterns, colors, and cultural nuance of jewelry in
India. If nobody wanted to wear the bangle, it wouldn’t
help! You might assume that all successful entrepreneurs
have this process down. They’re changing the world, making money,
and living the dream, right?! But we all have biases and limitations, and
big mistakes happen. Maybe not enough research or testing was done,
or there was oversight. For example, the most common crash test dummy
was designed around a statistically average male body, from height and weight to muscle
distribution. So cars and seatbelts have historically been
much less safe for people whose bodies aren’t like that. Power tools are easier to hold if your hand
is a larger size. And personal protective equipment, like safety
goggles and body armor, doesn’t always come in the sizes that people need. And this unfortunately happens a lot across
medicine too. Like, the dosage of the morning-after contraceptive
pill is barely effective in people who weigh more than 165 pounds. So design-thinking is complicated — especially
when it comes to health and safety — and it takes a lot of work to make a thoughtful
MVP and consider all the different types of people who might use it. But no matter how well-researched or user-friendly
your MVP is, people just might not want it. That feeling stinks as a new entrepreneur. But all is not lost! Instead of burning everything to the ground,
you might be able to pivot. That’s the business way of saying: make
a big change to a product or service based on customer feedback, because they don’t
like or need it. In fact, many of the brands we know and love
(or at least use) today were born from pivots. Take Instagram, for example, which started
as Burbn — a check-in slash gaming slash planning slash photo-sharing app named after
alcohol. It was a lot. And it wasn’t popular. But instead of [drowning their sorrows in
Jim Beam, and] quitting, the founders used their app analytics to see how people were
using Burbn. No one cared about the check-in or gaming
features, but they loved to share photos. And thus: Instagram was born. Simple, intuitive, and now with over 1 billion
users. The key to a good pivot is listening. As you test your MVP, are you paying attention
to what your customers are telling you? You may uncover a job, pain, or gain that
you didn’t know about before. Then the question becomes: can you change? Change is hard! It’s easy to think you can handle it before
you’ve gone through the emotional rollercoaster of a new entrepreneurship venture. Of course I’d be able to
adapt! I’m super flexible, and I love hearing other
people’s ideas. But really listening to feedback can be rough. And it’s easy to disregard useful feedback
as worthless because you think you know best. This business idea is my BABY. I spent all this time listening and working
and making this thing that you SAID you wanted. Why don’t you love it?! How dare you! This kind of thinking can mean the death of
a fledgling — or even a mature — business. The best thing for your idea is to have a
critical eye and a hard heart: pay attention to what customers are using and let go of
what isn’t serving them. And it’s so important to get feedback early
on. Even though you’ve still put in hard work,
time, and money into an idea — it’ll be easier to pivot when you’re less attached. You know, I really thought the cat waterbed
was a good idea. But I guess it’s better to switch things
up now, before I paid to mass-produce them… oh ya, claws… that makes sense. The bottom line is: be flexible. You want your minimum viable product to draw
in customers, who provide lots of feedback, so you can adapt. And if you need to, pivot! Figure out what parts of your idea people
like and use, and focus on them. Next time, we’ll talk more detailed strategies
for getting this product feedback out of your customers, so that you can pivot before getting
in too deep. Thanks for watching Crash Course Business,
which is sponsored by Google. Thanks also to our animation team, Thought
Cafe! If you want to help keep Crash Course free
for everybody, forever, you can join our community on Patreon. And if you want to take a break from concrete
ideas and learn about the philosophy of design and aesthetics, check out this video:

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