"Minimally Viable Product" and "Maximally Buyable Product"

Developers of new products will benefit from applying a "minimum and maximum" approach to crafting new products, says Dharmesh Shah, HubSpot CEO. "One of the key parts of the lean startup is the concept of a “minimally viable product," he says.

The MVP is a product that has the minimum set of features needed to learn what the market wants. The idea behind the MVP is to spend as little energy is possible figuring out whether what you’re building is something people want.

The other element is reduction of barriers to adoption. He calls that the “maximally buyable product.”

To be "maximally buyable, there are some elements everybody would intuitively grasp. Products or applications should be easy to understand, easy to try and easy to buy. For many products, the business model and design should also make it "easy to remain a customer." In other words, design for longevity of customer relationship.

In many parts of the communications service provider market, consumer customer relationships last three years or less. Application relationships can last months to a year. Changing the length of customer relationship can have dramatic impact on profit margins.

Customers with longer tenure tend to have fewer support requirements, since they know how to use the product. Since there is a marketing cost to gain a new customer, the longer the relationship, the lower the average cost to acquire customers. Customers with longer tenure tend to buy additional products a company offers, and therefore tend to have higher average revenue per user, as well.

The non-intuitive advice is to make a product "easy to leave." This runs counter to any marketer's thinking, which will more naturally lean towards customer lock in. But the easier you make it for customers to leave, the more likely that are to buy in the first place.

On Startups by Dharmesh Shah