Why choose Billable Viable Product over Minimum Viable Product?
The BVP Model is the Future for Lean Startup Techniques because Consumers are making it so. Discover Why MVP will be swallowed up by the BVP Model and will become Obsolete as a Standalone Technique.
The Minimum Viable Product (MVP) model has long been touted as an efficient lean startup technique that can save companies massive amounts of resources, in terms of both money and time. However, the MVP model poses a series of challenges that will likely soon make it obsolete, at least as a standalone method, with the Billable Viable Product model taking over.
What’s the Problem with MVP?
The core concept of MVP is to bring a product to market quickly, with as little effort as possible, to determine whether or not people want to use it. It’s a great concept, but it does come with a few problems.
1. Using a Product versus Paying for it
First of all, there’s a big difference between wanting to use something and being willing to pay for that same thing. And since MVP skirts any form of commercial discussion until such time as the product is ready for the market, an entrepreneur could end up never seeing a dime. Customers might be more than happy to use the product, but might not be so happy to pay for it. Thus, a company could be spinning its wheels for months or even years, before discovering their product really isn’t commercially viable.
By skirting the issue of money, MVP can lead to a situation where it takes years for a company to discover their product has no commercial viability. Remember, using something isn’t the same as being willing to pay for it.
2. Going Too Minimum Can Ruin the Commercial Viability of Your Product from the Outset
Secondly, another big issue with MVP is that it can ruin the commercial viability of the product because the “minimum” part is very subjective. Some say that your MVP should be so minimal that you’re embarrassed by it, while others feel your product should be at least functional.
The fact is that today’s consumer, whether in a B2C or a B2B environment, is much more discerning. They will no longer accept half-baked products, and will certainly not be impressed by something you find embarrassing. However, many companies roll out pilots for their products before they’re even vaguely functional, with the excuse that it’s an MVP and it’s only for learning purposes.
Unfortunately, this approach often alienates customers because they want their problems fixed. They don’t want to hold your hand while you work out all the kinks in your product. They don’t have months or years to wait for you to get your ducks in a row. And the first impression you create with a half-baked product won’t be a positive one.
The minimum in MVP is subjective and can result in mediocrity, which will alienate customers from the get-go.
3. Complacency can kill even the Greatest Ideas
Another issue with MVP is complacency. When an entrepreneur rolls out an MVP, they are only really motivated by their end-goal, which is to make money. Unfortunately, since MVP doesn’t put the entrepreneur in the position of asking for something from their customers, the result can often be that it takes many, many months or even years to get the product to a stage where customers are willing to pay for it.
It’s much easier to put off the unpleasant business of asking for money by convincing yourself the product needs some more tweaks or additional features before you can start charging. So, you either waste a lot of time and your product is already outdated by time it’s ready, or your resources dry up and your product still isn’t saleable. Or even worse, you’ve spent a fortune, wasted a ton of time, to bring the product to the market only to discover people don’t actually want to pay for it. And all because MVP allowed you to be complacent because it’s a “learning” experience.
MVP can lead to complacency, with entrepreneurs convincing themselves that it’s a learning experience and allowing themselves to put off asking for money from customers until it’s too late.
How does BVP solve the MVP Problems?
First off, I want to state that I’m not against MVP. In fact, I feel it’s an essential component of a lean startup technique. But that’s all it should be – a component. You can’t really go from a great idea on paper directly to a Billable Viable Product. You have to go through an MVP stage.
MVP shouldn’t be a standalone method but a component of the BVP model – a very short and contained one.
What I am advocating, though, is that the MVP stage be very short and very contained. Set deadlines and stick to them, and don’t roll it out to every customer. Instead, work with a few of them to get your product to the point where you can start billing as soon as the pilot is complete. With Cloudcherry, we went from a great idea to a Billable Viable Product in six months. We set deadlines and we stuck to them!
Now, let’s look at how BVP overcomes the MVP problems we discussed earlier.
1. BVP Talks About Money Upfront
With BVP, you don’t have the luxury of beating around the bush and avoiding the very essential topic of money. Unlike MVP, where you ask customers for help and advice without any quid pro quo, with BVP, your sales team is out there, telling customers that they can try this great product for a limited time for free (during the pilot) and then they will have to pay for it.
This approach means you’ll either start making money a lot faster than if you took the MVP route, or you’ll fail just as fast. And the faster you fail, the less resources you waste and the faster you can move on to another idea that may be more viable.
It also doesn’t hurt that it keeps everyone focused on the most important thing, which is you’re doing what you’re doing to make money. Yes, you want to help people. We all do, but in the end, we all also want to make money, and by staying focused on that goal, you’ll achieve it much faster.
BVP allows you to start making money faster, or to fail faster so you can turn your attention to something else that might be more viable.
2. Minimum Doesn’t Even Make It into the Picture
With a Billable Viable Product, minimum doesn’t even make it into the picture. A BVP means that the product has to be at a point where people are willing to pay for it and that means shipping a quality product with complete features.
I’m not saying the product has to be completely ready – CloudCherry evolved in the few months between the BVP rollout and the release of the final product — but it has to be usable and saleable. When we rolled the Cloudcherry pilot out, our product didn’t have bugs and it certainly didn’t have incomplete features, which meant we could start billing customers as soon as the trial was over.
So, by rolling out a product that’s functional with complete features, there is no risk of ruining its commercial viability because you made a poor first impression. You will be meeting the demands of the market in that you are coming out with a product that’s ready to use. Not a vague idea that might be effective at some point in the future. You’re solving their problems now and that’s what your customers want, not some ephemeral idea of a product that may or may not be completed at some point in the future.
BVP keeps your reputation spotless and draws in customers because you are launching a functional product, which is what the market expects, thus eliminating the risk of damaging the commercial viability of your product.
3. Obligation eliminates Complacency
By going the BVP route, you already have a good quality, functional product, which means the risk of complacency has already been significantly reduced. You already have a product people are willing to pay for – with the BVP model, customers will sign up for the trial knowing that on the 31st day, they’ll have to pay, which will show you the commercial viability of your product right away. So, you already have a product that’s generating revenues.
But now that customers are actually paying for the product, you have a much greater obligation to deliver on your promises, which makes it hard to become complacent. It’s one thing when you are giving something away for free – you can take all the time in the world if you want because you don’t feel obligated to anyone but yourself – but when people are paying for something, you either move quickly or lose their business. So, with BVP, you simply can’t afford to be complacent.
We started in February, 2014 and by May 2nd, 2014, we were up and running with our BVP. After releasing the BVP to the market, in August, with a couple of paying, albeit small clients that allowed us to tweak the product, we got our first big enterprise client onboard by December 2015. We went from drawing board to the final release of a commercially viable product in 11 months – and we were already generating revenues by then.
The market and the consumer has evolved to the point where MVP on its own can do more harm than good. Launching half-baked products that are more idea than product can damage your startup’s commercial viability to the point where you might as well pack up and go home. The market has expectations and a product that doesn’t meet or exceed them will fail, no matter how brilliant the idea.
So, while MVP will not truly become obsolete, it is no longer viable as a lean startup technique on its own. Instead, MVP should be part of a BVP model, which will not only help you meet market expectations, but also help you find out sooner rather than later whether your idea is commercially viable. And if it is, BVP will definitely help you start making money faster than a purely MVP approach.
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