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YC SUS: Michael Seibel and Eric Migicovsky discuss How to Launch an MVP

Y Combinator2020-01-24
58K views|4 years ago
💫 Short Summary

In a live Q&A session, Eric and Michael provide tailored advice on MVPs for startups, covering topics such as entering spaces with existing competitors, avoiding the trap of making a service too specific, and generating sales for long-term projects. They emphasize the need to focus on providing value to users and to be skeptical and iterative in the MVP process. The key to a successful MVP is to find a niche where users are willing to engage with early solutions and to constantly evaluate and iterate based on their feedback.In this video, Paul Graham discusses the importance of finding product-market fit for startups and provides insights and strategies for startup experimentation. He emphasizes the need to analyze user feedback, time-bound efforts, and focus on building a high-quality product. Paul also advises startup founders to be upfront with investors about their current work and to understand the potential risks of depending on external platforms such as YouTube.In this video segment, the speaker discusses the challenges of shutting down a platform like Vine and replacing it with a new one, highlighting the case of Twitter replacing Vine with Periscope. The speaker also thanks the audience for their questions and announces the schedule for the next Q&A session.

✨ Highlights
📊 Transcript
Eric, the course facilitator at Startup School, and Michael, a partner at Y Combinator, answer questions about MVPs from the forum.
They aim to provide tailored advice for each specific question.
For a competitive gaming analytics platform, having a scrappy MVP may be sufficient if users have a significant problem that needs solving.
In the case of entering a space with existing developed competitors, it may be helpful to layer the MVP onto the existing product to test the hypothesis and find users more easily.
In the early stages, it is useful to focus on a smaller group of users and their specific needs when developing an MVP.
Having a polished product from the start may not be a good sign if other competitors are already doing a good job.
One approach is to build the MVP based on the insights and knowledge of the space that the founder already has.
For those with little experience in the specific industry, the early stage is a learning process, and building features may not be generally applicable at first.
The speaker suggests that to launch a user-generated content platform, the focus should be on the platform's replay value and smaller communities.
Having a smaller community that finds the product useful is important, even if the product is not widely adopted at first.
Examples of successful companies' MVPs were not discussed in the video, but the speaker mentioned a talk by Peter from Segment about being skeptical and asking if the MVP provides any value to the users.
The advice is to find people who are in enough pain around the problem that they would use the MVP, and if the MVP does not provide any value, iterate until it does.
The video suggests that for a home wellness service and products marketplace, it is important to charge for the MVP if there are real costs involved.
The speaker mentions that in the case of a pure software play where there are no costs, it may be considered to have a freemium model, but for services with real costs, charging from day one is important.
It is also suggested to charge more than the existing solutions to identify the most desperate users who are willing to pay for the service.
In the context of a local news website that helps people get invited to activities, the video recommends studying similar products and being an expert in the field.
The startup should focus on building an MVP that solves a specific problem and provides value to the users.
The speaker emphasizes the importance of having someone in the company who is skeptical and can ask if the MVP is providing any value to the users.
It is suggested to find people who are in enough pain around the problem that they would use the MVP.
The speaker also mentions the concept of iterating on the market by talking to different groups of users and finding the fit for the product.
The key to launching a successful MVP is to constantly evaluate its value and make iterations based on user feedback.
Many startups believe they are on the verge of product-market fit, but in reality, they may be in the process of dying.
Having someone in the company who is skeptical can help in evaluating whether the MVP is providing any value to the users.
Iterating on the market by finding the right fit for the product through user feedback is crucial for achieving product-market fit.
Paul recommends analyzing email logs after an outage to see if users care, as a test for product value.
Turn off the product to simulate an outage and observe user complaints.
Reddit and Twitter have also performed similar tests in the past.
Paul emphasizes the importance of experimenting with extreme things in the startup environment.
The speaker suggests creating a landing page to test the hypothesis of a specific demographic's interest in buying products from the website.
Testing the hypothesis can be done in a week using the existing website framework.
The speaker recommends writing down and discussing user conversations to gain insights and tweak the minimum viable product (MVP).
The MVP (Minimum Viable Product) for a startup should be included in the pitch, along with the traction and business model, to provide investors with a clear understanding of the company's current status and future vision.
The MVP is an online marketplace for shopping from home-based and small businesses.
The founder realizes the need to continue working on the project to find product-market fit.
The strategy is to time-bound the effort, with a minimum of six months, and be open to pivoting if the fit is not found.
The decision to focus on building new features or implementing revenue sources for an MVP depends on the startup's financial needs and the long-term vision for the product.
If the startup is intended to be a venture scale business, focusing on building new features and monetizing the product in the long term may be more appropriate.
Charging for the MVP or focusing on monetization is recommended if the startup's financial needs require it to be a full-time venture.
Understanding user's needs and engagement with the MVP is crucial in deciding whether to focus on building new features or implementing monetization strategies.
The speaker advises being honest and upfront with potential customers about being part of a beta test and the close collaboration for giving feedback and making quick changes.
For a technology service that has never been done before, it is important to communicate the beta nature and the opportunity to work closely with the company.
Being upfront about the beta test and close collaboration with customers is also recommended for investors.
The speaker emphasizes the need to focus on solving existing problems such as acquiring users and generating revenue, rather than worrying about patents.
The speaker suggests that for a startup, the focus should be on finding something that people want and selling it to them, rather than on obtaining patents.
Patents are not a critical step in the early stages of a technology startup.
The focus should be on solving existing problems such as acquiring users and generating revenue.
The speaker advises caution in building a business that depends on a platform like YouTube, as the platform may choose to change its policies or features in the future.
Dependence on a platform should be evaluated in the long term, and building a business that can adapt to changes is important.
Monetizing the business quickly and considering it as a lifestyle business is a possible approach to mitigate the risk of platform changes.
Twitter shut down Vine and replaced it with Periscope, which was popular but still did not make a profit.
Shutting down a platform can lead to a mass revolt from users.
Vine was replaced by Periscope, but Twitter still faced challenges with monetization.
The speaker thanks the audience for the questions and announces the next Q&A session.
Acknowledgment of the excellent questions.
Scheduled time for the next Q&A session.
Upcoming focus on answering questions about the following week's lectures.
💫 FAQs about This YouTube Video

1. How can a startup stand out in a competitive market with well-established products when considering the development of a minimum viable product (MVP)?

In a competitive market with well-established products, a startup can stand out by focusing on the specific problem it aims to solve with the MVP. By identifying a niche or underserved area within the market, the startup can ensure that its MVP addresses a distinct need, potentially allowing it to gain traction and differentiate itself from the existing competition. Additionally, the startup should strive to make the MVP as impactful and valuable as possible, even within a crowded landscape, to attract and retain users.

2. What are some key strategies for successfully launching an MVP in a market with established competitors?

In a market with established competitors, key strategies for successfully launching an MVP include: - Identifying a specific and underserved niche within the market - Focusing on the unique value proposition of the MVP - Prioritizing features that are most crucial for initial user engagement - Seeking early feedback and iteration from a targeted user base - Leveraging existing platforms or technologies to enhance the MVP's capabilities - Implementing a well-defined and focused go-to-market strategy to attract users' attention and engagement.

3. How important is it for a startup to find a niche or underserved area within a crowded market when developing an MVP?

Finding a niche or underserved area within a crowded market is crucial for a startup when developing an MVP. This approach allows the startup to focus its resources on addressing specific unmet needs within the market, increasing the likelihood of the MVP's success. By targeting a niche, the startup can more effectively differentiate its offering and capture the interest of a subset of users who are overlooked or dissatisfied with the current solutions. This strategy also enables the startup to grow and expand its presence within the market by starting with a defined and specialized value proposition.

4. What are the potential challenges and advantages of entering a market with an MVP when there are already established products and competitors?

Entering a market with an MVP where established products and competitors exist can present both challenges and advantages for a startup. Challenges may include the need to differentiate the MVP from existing solutions, gaining traction and user adoption in a competitive landscape, and responding to the capabilities and features offered by established products. However, the MVP approach also provides advantages such as the ability to test and refine the startup's value proposition based on real user feedback, a more cost-effective initial entry into the market, and the potential to attract users who are seeking alternative or specialized solutions within the established market.

5. What are some strategies for determining if a startup has achieved product-market fit?

One strategy is to time-bound the effort and be open to pivoting if product-market fit is not found within a certain period, typically no less than six months. Another approach is to analyze user feedback and engagement to assess the fit and the need for further development or changes.

6. How can a startup capture and measure feedback effectively after the minimum viable product (MVP) is live?

Startups can use methods such as calling users personally, inviting them to the office, hosting user engagement events, and creating group communication channels. The focus should be on high-quality and personalized feedback, as well as observing user interactions and behavior within the MVP.

7. What should be included in a startup pitch to investors regarding the MVP, traction, and business model?

In a startup pitch, it is important to highlight the current work on the MVP, demonstrate traction, and present a clear business model. The pitch should provide an understanding of the startup's position, its growth potential, and the value it brings to users and the market.

8. Is it necessary to have a patented technology before releasing the minimum viable product (MVP) for a startup?

For most technology startups, having a patented technology is not a prerequisite for releasing the MVP. The focus for startups should be on solving real problems, finding a market fit, and delivering value to customers. Patents can be pursued at a later stage as the business matures.

9. What are the potential risks and benefits of using white label services to test the demand for a product?

White label services can be beneficial for testing the demand for a product, as they allow for a quick and cost-effective implementation. However, there is a risk of limited customization and the potential for the product to be seen as generic. Startups should consider the balance between speed to market and the uniqueness of their offering when using white label services.

10. What was the outcome of Twitter shutting down Vine and replacing it with Periscope?

Twitter shut down Vine and replaced it with Periscope, but they still faced challenges with monetization. Periscope was popular but Twitter had to deal with the issue of making it profitable.

11. When will the next Q&A session take place and what will be the focus?

The next Q&A session will be held on the following Wednesday at 11 a.m. Pacific time. The focus will be on answering questions about the next week's lectures.

12. How did the cool kids in San Francisco react to Twitter shutting down Vine and introducing Periscope?

The cool kids in San Francisco liked Periscope, but Twitter still faced challenges with monetization, as Periscope was popular but not necessarily profitable.