How Uber, Amazon, and Basecamp launched with a minimal viable product — and grew to massive success. Here's how to build an MVP that works.
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Frank Robinson was relentlessly focused on simultaneous customer and product development when he coined the term “minimum viable product” in 2001. As he puts it:
A new product often starts with a problem to be solved or an invention, accidental or otherwise. The next step is hypothesizing a product and market. While teams invariably seek to understand their market to some degree, many jump that step and go straight to execution, developing the product. As their imaginations work overtime, new features creep in, a risky methodology.
Eric Ries, the author of The Lean Startup, defines MVP as “that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
Don’t get any fancy ideas. Launching an MVP isn’t an excuse for crappy user experiences — you still have to get it right. Building a testable product with highly limited resources takes an incredible amount of creativity and strategy.
But by ensuring that the market wants the main functionality of your product before large time and monetary investments are made, you can save yourself a lot of heartache (and debt).
Why follow this approach? So you don’t do something like raise $100 million in venture funding for a $1,000 tea machine that nobody asked for. Yikes.
Here are some stories of founders who got it right:
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1. Uber – Software Prototype MVP
Fresh off respective exits from their previous companies, Uber founders Travis Kalanick and Garrett Camp decided they wanted to make a way for people to order and pay for a black car service from their smartphone — no cash needed.
Camp created a simple prototype for ubercab.com in 2009 and tested the concept in New York and then San Francisco in early 2010. Famously, people had to email one of the founders to gain access to the service. The MVP they created allowed people to text their address to the service and in turn, Ubercab would find the nearest driver and send the driver to the address provided.
By initially focusing on a smaller market, Camp and Kalanick were able to gather feedback and improve on the MVP in an iterative fashion, eventually building the ride-hailing app with more advanced features like live tracking, fare splitting, and ride estimates. Uber went public in 2019, reporting 91 million average monthly users when it filed with the U.S. Securities and Exchange Commission.
Key lesson: When you’re just starting out, less is (always) more. Take one core feature and focus on testing and validating that concept. Keep it as simple and small as possible.
2. Dropbox – Demo Video MVP
Before Hudson secured funding or built out what he knew would be a complex product, he created a simple video to demo how the very first version of Dropbox could seamlessly save files across operating systems. His demo struck a chord with a lot of people. This approach not only helped him get accepted to Y Combinator, but also connected Drew with his cofounder Arash Ferdowsi who saw the video on Hacker News. Dropbox IPO’d in 2018 and currently has over 500 million users.
Key lesson: Before throwing tons of money into development, consider launching an approachable demo video explaining your product to gather feedback and gauge interest from potential users, partners, and investors. (See: crowdfunded MVPs for more examples of how to do this well.)
3. Airbnb – Concierge MVP
In 2007, San Francisco roommates Joe Gebbia and Brian Chesky noticed a problem. Nearby hotels were all booked up ahead of IDSA, a large Bay Area design conference. So they decided to test their assumption that certain people would be willing to pay to stay at someone’s house in lieu of a hotel.
So they created a simple website with a listing for their flat to test whether people would be willing to sign up. “AirBed&Breakfast” worked. They got three guests to stay at their flat, validating their concept. Original slogan? “Forget hotels.”
Key lesson: Think big, but start (VERY) small. If possible, try your idea in an extremely lo-fi, DIY way and see if people respond.
4. Buffer – Landing Page MVP
In 2010, Joel Gascoigne was looking for a way to schedule his tweets in advance. As a vocal proponent of Eric Ries’ Lean Startup movement, Gascoigne knew he should start with an MVP, but found the advice hard to follow:
I even started coding Buffer before I’d tested the viability of the business. As soon as I realised that, I stopped, took a deep breath and told myself: do it the right way this time. It was time to test whether people wanted this product.
But testing doesn’t mean you have to move slowly. To gather feedback on his idea, Joel built a landing page — what he calls a “two-page MVP” — with a description of the product features and sent it out on Twitter. People clicked through, signed up for more info, and expressed interest.
Next, he added a third page with pricing options to see if people would be willing to pay for this idea, giving him further validation regarding pricing. Then he was able to sprint to get the first version of Buffer launched just 7 weeks later on November 30th, 2010. In 2018, they bought out their Series A investors and today they have over 75,000 customers.
Key lesson: Testing your ideas doesn’t have to slow you down. When you test, give people a way to opt into your communications as you receive product validation. Build that list and get feedback. If you get the green light — then start development.
5. Amazon – Wizard of Oz MVP
In 1994, Jeff Bezos famously launched Amazon out of his garage. He started with a list of over 20 items he thought he could sell on this rapidly-growing new medium called the internet. But he settled on testing his online retail idea with one item: books. After making a basic MVP website with lots of book listings, Amazon.com went live. When someone bought a book, he ordered it from the distributor and shipped it to their address. Within a month, he was doing $20,000 in sales every week.
As he started earning money, Bezos kept the customer experience as his north star. He continued to iterate to improve his margins and drive down costs. Today, Amazon is the world’s largest online retailer. You’ve probably heard of them.
Key lesson: Supply chains aren’t built in a day. Start with manual processes and fulfillment to start making money while you validate your idea and learn how to refine the user experience.
BONUS: Basecamp – The Founder’s MVP
One of the best MVPs is the product you build internally to solve a problem your team already has. This is the story of Basecamp, Jason Fried’s project management tool turned product in its own right.
In 2004, Fried had a design firm called 37signals. His team hated managing large design projects via email, so they started to explore solutions to this problem. When they couldn’t find any, they built the tool themselves. As Fried puts it in the company’s origin story blog:
We focused on a very specific bundle of integrated tools — a message board to post updates, work, and get feedback. To-do lists to keep track of all the work that had to get done. And milestones to keep track of big picture deadlines. This was all the first version of Basecamp did. It’s all we needed and nothing we didn’t.
This relentless focus on core functionality caught the attention of the companies who were using the client-side of the platform. 37signals started to get platform licensing requests, and today they get 2,500+ signups a week.
Other notable contenders:
These aren’t the only earth-shattering MVPs. Check out Facebook, Twitter, Kickstarter, Foursquare, Pebble, and Spotify for other great MVP stories.
The MVP concept is all about restraint.
It’s incredibly exciting to build software, disrupt the world, and make boatloads of cash. But starting with an MVP can help you avoid many industry pitfalls, including:
- Blowing all your money on devs before you have proof of concept/product validation
- Lacking quantitative and qualitative customer feedback
- The “IKEA effect” (when you build something, you tend to love it more)
- Featuritis (AKA creeping featurism)
- Landing in the startup cemetery (RIP Netscape)
This whole concept underlies the lean startup process of collecting validated learnings from potential customers to manage risk and determine product-market fit. The pillars of the lean startup process are build, measure, learn — and rapidly repeat. We walk you through this process in our Sumo-size Your Success course on AppSumo — but if you are looking to boil it down, here’s the bottom line:
Don’t start building a product until you know that REAL HUMANS:
1. Like it.
2. Like it enough to pay $$$ for it.
Or as Noah Kagan puts it,
“Take 48 hours, try to get 3 people to pay you, and you have something on your hands.”
Want to learn more from Noah about how to build AND validate your idea to create the next great MVP? Take his Monthly1K course!