Fake it until you make it by building a Minimum Viable Product to assess the US Market
Some of the most successful European founders swear by the “MVP method” when they consider expanding into the U.S market.
Why that?
As the European market is smaller, European start-ups tend to build pretty horizontal products, like for instance an IoT platform, a data analytics platform, or training software. The problem is that the US market can be 10 times bigger, more mature, and far more crowded. Therefore, selecting a niche and developing a dedicated MVP becomes much more efficient with a constraint budget and small dedicated organization.
As Gil Sadis, the VP product of Lemonade (backed by Index Venture) said:
Testing the niche with a dedicated MVP can be a powerful way to gather feedback and stand out from the noise.
Choosing means renouncing
So choose one specific application, one niche user segment, and build quickly an MVP (Minimum Viable Product) that caters to this very niche user, domain, or industry needs. The more precise your niche, the better will be your MVP. Remember, Americans are not impressed by the complexity of a solution, or the breakthrough of innovation but only by its ability to solve their problems.
In France, the fewer features you pitch to your client, the less you will sell. In the U.S, it’s exactly the opposite: the fewer features you will present, the more specialist you would be perceived the more you will sell. (thanks for your compelling vision Jeremy, Head of Growth @Spendesk, another successful baby startup from @eFounders, who left the nest for a while now.)
In a nutshell, the idea is to create the smallest possible version of a product, release it, and then grow the product based on user feedback. This is an idea completely opposed to the usual European approach (specifically the French one) of building the “perfect” product that fits with everybody.
Start with an MVP and validate assumptions
A minimum viable product (MVP) helps you start the process of learning as quickly as possible how your future clients will interact with your solution and will perceive the value proposition.
It is not necessarily the smallest product imaginable, though; it is simply the fastest way to start learning. Unlike a prototype, an MVP is designed not just to answer product design or technical questions. Its goal is to test fundamental business hypotheses to build a product-market-fit strategy.
What does “viable” mean?”
“Viability” is about providing sufficient value to users. In the context of software, it depends on this: WHAT it does is much more important than HOW it does it. In clear, even if all the features are not present and the design is incomplete, the MVP focuses on the essential. At launch time, everything else is unnecessary and a waste of development resources. A viable product responds to user demands by fulfilling a primary function. An MVP helps gain early data and insights that contain user interest in a product. By testing your product, you can save time and resources by making sure you invest your time in the right place.
BE CAREFUL ⚠️
It’s important to differentiate who likes your product and who is willing to pay for your product.
Indeed, it is important to note the difference between people who say they like your product and those who are willing to pay for it. To find out more, visit my last article here. Pay attention to every positive feedback, especially the ones who are slow to respond to their willingness to pay. Depending on the country, users always react very differently. In the U.S, people are rather optimistic, positive, and encouraging by nature. It is very likely that you will get positive and promising feedback: “I’m crazy about what you do.” “What you’ve done impressed me so much”…
To get a clear answer, don’t forget to conclude your session by asking them what would make them buy your product if you would launch its final version.
Now that you are convinced, how do you test your MVP?
Explanatory Video
This MVP consists of an explanatory video or animation of a few minutes, which explains the benefits of the products. An extract is generally sufficient to enrich your email prospecting sequences, to allow you to generate interest. Keep the global video for your demonstration calls, you will learn live feedback and objections.
Find an amazing example with the video made by the founder of Dropbox in the very first months of creation before launching the app. The video went very viral and you know what happened to Dropbox today.
Landing page
Typically used to provide a product description, it is a comprehensive web page that includes a unique value proposition with a list of product benefits. Landing pages are very useful for doing test campaigns on acquisition channels and value propositions. However, I do not recommend it to use them without interaction. You need to observe how your future users interact with the product, ask questions, and object. It’s good to observe their behaviors along with, rationally measuring the number of clicks to make sense of the data. Americans talk about “Data-Driven” MVP, but you have to take it as a first step. Nothing like talking to future customers.
My favorite one: the Magician
A people MVP helps you test your idea using a service provided by humans, for example, your team. You can present a “mockup” leaflet to create an illusion, but all of the functionalities that automated systems should have performed are in fact performed by a human. Each customer is treated with great care, and you can generate de facto real interactions with your future users. Don’t forget to talk about pricing, it is essential at this stage to get their opinions on it as well to measure again the “Willingness to pay”.
3 key takeaways to remember:
Test it, get feedback, and iterate. As Linkedin co-founder, Reid Hoffman said, “If you are not embarrassed by the first version of your product, you’ve launched too late”
Put something (doesn’t have to be code) in users’ hands and get real feedback
Finally, track all interactions, there is no space for intuition. Be analytics, be a “data-driven entrepreneur”
The biggest risk is building a solution no one wants and spending tons of money to sell it.
If you face any challenge to validate or scale in the U.S, let us know.