LEAN START UP MANAGEMENT

DIGITAL ASSIGNMENT-3

NAME: ADITI DIXIT

REG. NO.: 19BEE0272
SLOT: TE2
FACULTY: MURALI MANOHAR B
3. Identify the most successful venture made out of MVP.

A minimum viable product (MVP) is the most basic version of a product or

service that can be released for consumers. An MVP might be a product, an app,
a landing page, or even a video with no working product at all.

Why use an MVP?

MVPs help companies in a number of ways. At the most basic level, an MVP can
help a company see whether their idea is of interest to people. MVPs can help
entice early adopters and this generates feedback that can help inform future
product development. MVPs can also produce revenue if people are willing to
buy the product or service.

10 MVPs that turned into big businesse

1. Dropbox

When Arash Ferdowsi and Drew Houston came up with their idea for a cloud-
based file-syncing service, they realized that trying to build the actual hardware
infrastructure would be incredibly time-consuming and expensive. So they
didn’t!

Most entrepreneurs would have started building an app and investing in

hardware, but Ferdowsi and Houston were smarter than that. Their MVP was
nothing more than a simple explainer video showing how Dropbox would work;
none of the service was actually built yet. The video was hugely successful and
encouraged over 70,000 signups from people interested in learning more. This
one simple video let Dropbox’s founders test the biggest risk facing their
business – ie. would anyone actually want it – very quickly and cheaply.
2. Zappos

In 1999, Nick Swinmurn felt there might be a market for selling shoes online. But
whereas most entrepreneurs would get caught up with building a fully-
functioning e-commerce store, buying inventory and signing up delivery
partners, Swinmurn did something smart.

He realized that most startups burn through cash and get killed before they are
even able to test their ideas out. So, Swinmurn registered Shoesite.com and
went into business without any stock or inventory! He simply took photos of the
shoes he wanted to sell and if a customer placed an order from his site, he would
buy the shoes from a conventional store and ship them. This gave him a low-risk
way of testing his idea without having to tie up cash in inventory. Shoesite.com
developed into Zappos and was snapped up by Amazon in 2009 for a cool $1.2
billion. Not bad for a company that started with zero inventory, right?
3. Groupon

Back in the late 1990s, coupons and discount vouchers were all the rage and
Groupon’s original idea was to make it easier for people to find the best deals.
Their concept was simple; they threw up a simple website and if visitors wanted
to get their hands on some coupons, they subscribed and Groupon emailed
them a range of coupons in PDF format.

Whereas most startups would have plowed time and capital into building out a
fancy website and signing deals with retailers, Groupon did something smart.
They threw up a simple WordPress website and quickly amassed a huge email
list of engaged customers. Groupon’s initial website is one of the best minimum
viable product examples for entrepreneurs looking to test the waters with the
least amount of fuss. Groupon parlayed these leads into revenue and used that
cash to gradually build out its backend and voucher system. Groupon’s 2011
initial public offering (IPO) was the biggest by a U.S. company since Google.
Pretty cool for a company that started on WordPress!
4. Twitter

When Apple released iTunes in 2001, podcasting business Odeo knew they were
in for a rough ride. Their entire business model was under threat, and they knew
they couldn’t compete. While other podcasting companies doubled down and
threw good money after bad trying to build their market share, Odeo thought
outside the box and started running hackathons.

Odeo knew that trying to fend off Apple was fighting a losing battle. So they used
hackathons to generate new ideas, one of which was a cool SMS messaging
service called ‘Twttr’.

Initially, this idea was only used internally by Odeo employees. It wasn’t long
before Odeo’s employees were spending significant amounts of their own
money posting on the platform and Odeo realized they had a hit on their hands.
‘Twttr’ helped Odeo pivot to become ‘Twitter’ and quickly scaled to become the
phenomenon we know and love today.
5. Amazon

As an investment banker, Jeff Bezos saw the rise of the internet and came up
with the idea of selling books online. While most entrepreneurs would have
sunk money into a fully functioning e-commerce store, Bezos did something
smart. He realized that unless he operated frugally, he’d never get to properly
test his idea and wind up wasting a ton of cash on an idea that no-one wanted.
So, he moved back home with his parents and built a simple website.
Despite its rudimentary design, the original Amazon website helped to prove
that selling books online at low prices was a winning idea. According to Peter H.
Diamandis and Steven Kotler, the authors of BOLD, many of Amazon’s early
orders were actually Bezos’ friends and family. In fact, his idea would have died
long before it took off if he hadn’t acted so frugally.

In its early days, the company had a buzzer set up that would ring whenever an
order was placed. Initially, the staff would cheer when they heard the sound,
but as sales picked up, the buzzer became so frequent that they had to
disconnect it!

6. Uber

In 2008, Garrett Camp and Travis Kalanick were frustrated by the high price of
cabs in San Francisco and the lack of affordable alternatives. Their original idea
was to pair drivers who were will to take passengers with people who wanted a
ride. At this point, most entrepreneurs would have embarked on a frenzy of app-
building and website-designing. But Camp and Kalanick were clever: they
realized that if they started scaling too quickly, their idea would get killed before
it ever got off the ground.

When it launched in 2009, the MVP app ‘UberCab’ only worked on iPhones or
via SMS and was only available in San Francisco. However, this app helped Camp
and Kalanick prove that their original ride-sharing idea had a market. Their MVP
helped them test the largest risk facing their business at very little cost. Data
from the app helped Uber scale and swiftly become one of the most highly
valued comp-anies in Silicon Valley.

7. Facebook

In 2003, Harvard University students Mark Zuckerberg and Eduardo Saverin

came up with a simple concept: what if they could build a way for people to
share connections and experience with friends and family? When ‘TheFacebook’
launched in 2004, it was only available to fellow Harvard students, offering a
sense of exclusivity that wasn’t available elsewhere.
This approach let Zuckerberg and Saverin avoid the pitfalls that other social
media networks fell into such as spending too much on development, scaling
too fast and not giving users what they wanted. TheFacebook was gradually
rolled it out across other U.S. colleges and eventually worldwide. This helped
the idea gain traction and scale efficiently until it became the dominant social
network that we know today.

8. Etsy

As Etsy founder Rob Kalin tells it, the idea for Etsy came to him when he needed
a way to sell his wooden-cased computers. However, according to David Lifson,
formerly head of Etsy’s product management team, the idea started in 2005
when Kalin, Chris Maguire, Jared Tarbell, and Haim Schoppik were working as
freelance website builders for a crafting community forum. After members kept
complaining that eBay’s fees were too high and it was difficult to use, the
founders came up with the idea for Etsy.
At the time, eBay-like websites were ten a penny and most online marketplace
websites failed. Most startups either couldn’t test their idea before running out
of cash or wound up wasting a lot of money before realizing that customers
weren’t interested. So why did Etsy succeed?

Kalin did something smart and created a simple MVP website that let anyone
register and sell things they had produced themselves. Almost overnight,
thousands of sellers joined and started selling, despite Etsy’s rudimentary design
and functionality. This approach let Kalin test his idea quickly and cheaply,
before using the revenue to start improving and scaling his site.

9. Airbnb

In 2008, Brian Chesky and Joe Gebbia were struggling to pay the exorbitant rent
on their San Francisco loft apartment. Their original idea was to see whether
there was a market for people who wanted to rent out their homes. Instead of
following a traditional entrepreneurial route of building a fully functional
website and signing agreements with partners and homeowners, Chesky and
Gebbia did something pretty bright. They created a simple MVP that was
nothing more than a basic website showing photos of their own apartment!

This gave them a way of testing out their idea quickly without any upfront costs.
They discovered that they were able to rent out rooms to people who were
attending nearby conferences. After notching up three paying guests, Chesky
and Gebbia founded Airbnb in 2008 and gradually used their revenue to start
improving their website’s design and functionality.

10. Spotify

Back in 2006, the music industry was facing a huge challenge: file sharing sites
such as The Pirate Bay and LimeWire meant that fewer people than ever were
paying for music. Daniel Ek and Martin Lorentzon realized that legislation would
never work, so their original idea was to create a free music streaming service
and use ads to generate revenue. Many similar music streaming services were
launched around this time, so why did they get killed while Spotify went on to
become worth $23 billion?
Ek and Lorentzon realized that most music streaming startups were plowing
cash into flashy websites and apps without even testing their idea first. They
burned through funds before realizing that customers didn’t want what they
were offering. So Ek and Lorentzon did something astute: they created an MVP
in the form of a desktop app that offered one core feature: music streaming.
They later added the option for customers to pay a monthly fee to get an ad-
free experience. This route let them try out their idea while keeping their
investments in check.

Spotify’s MVP was initially run on a closed beta to test the market and keep costs
to a minimum. This approach confirmed that Spotify’s idea could succeed and
the service built on its initial success to quickly sign up artists, develop a mobile
app and scale up.
References:
1. https://devathon.com/blog/top-10-best-examples-of-mvp-minimum-
viable-product/
2. https://arkenea.com/blog/mvp-app/
3. https://myva360.com/blog/examples-of-minimum-viable-products
4. https://www.revelx.co/blog/minimal-viable-product-examples/