Over the years, I’ve worked with countless early-stage startups and non-technical founders and noticed a single factor that often determines their success or failure:
How well they define and prioritize their MVP (Minimum Viable Product).
A well-planned MVP focuses on core features that solve a specific user problem and allows startups to test assumptions, learn, and iterate. But, trying to create a fully-featured product right from the start can lead to wasted resources and a delayed launch.
Over-engineering, disregarding feedback, insufficient market research, subpar user experience, and ambiguous success metrics are common prevalent missteps I have seen by startups and founders when crafting an MVP.
If nothing else, take this information and run with it. I promise you, if done right, it will work. If you don’t believe me, just skip to the end for the proof.
Table of Contents:
- If You Build it, (Maybe) They Will Come
- The Holy Hockey Stick & Product-Market Fit
- A Billion Dollar Failure
- Why Big Launches Fail
- The Product Development Cycle
- Finding the True Hockey Stick
- Why You Should Launch Early and Often
- How To Prevent Your MVP from Failing
- The Minimum to Takeaway
If You Build It, (Maybe) They Will Come
The Minimum-Viable Product or MVP is the minimum level of work product we can test in the marketplace. Building and launching an MVP is one of the first activities a new startup completes.
As founders, we often hear about the importance of building an MVP. It’s the first version of your product that you can release with just enough features to captivate early adopters.
On its way to the marketplace, an MVP goes through three distinct stages:
(1) The idea
Everything from the initial idea until implementation begins. This includes market research, customer discovery, and solution exploration.
(2) Building the meat of the process
Here, technical partners take the concepts outlined during Idea and design, develop, test, and prepare them for launch.
(3) Launch
Once implementation is complete, the product is prepared for release and brought to the marketplace.
A Common Mistake Among Founders
First-time founders often see the initial launch as the final step, confident in their vision’s strength and viewing implementation as the only obstacle. They expect their MVP to be a runaway success, leaving no room for doubt in their growth expectations.
Confidence is crucial for founders, but startup reality can contradict bravado. CBInsights reports a 70% failure rate for startups that launched and secured initial funding within 20 months. This indicates that over 2 out of 3 funded MVPs couldn’t sustain viable companies, excluding those that didn’t even reach that stage.
In reality, early-stage startups typically experience slow initial growth before trending sharply upward after months (or even years). This model is often referred to as “Hockey Stick Growth.”
The Holy Hockey Stick & Product-Market Fit
In the Hockey Stick model, a startup sees little to no traction in its early months or years before hitting its “inflection point” and trending upwards into an exponential growth curve.
In this model, a startup’s inflection point is reached once it finds “Product-Market Fit” (PMF), i.e., in a good market with a product that can satisfy said market. Finding Product-Market Fit is the primary goal of an early-stage startup.
In truth, the only thing that matters at this stage is getting to product/market fit.
Hockey Stick Growth Stages
Founders often overestimate their ability to find Product-Market Fit pre-launch, assuming everything will work out by just bringing their MVP to market. However, the top reason for failure among funded companies is “No Market Need” for their product.
This overconfidence leads first-time founders to over-invest in their launch, obsessing over a “perfect” product only to find the market’s interest isn’t as expected. They invest months preparing the idea, researching the market, engaging potential customers, and collaborating with technical partners on development, testing, and revisions.
This preparation includes building sales and marketing assets, organizing press releases and events, and ensuring scalability. Then, on the big day, they hit the red button, eagerly awaiting a valuation climb to $1M and beyond.
Post-Launch Reality
The expected growth never comes. Months or years of MVP work yield little to no market response. A flaw in the original vision or a mismatch between perceived market needs and customer requirements could be the cause. Or, the implementation team might not have delivered the product as initially envisioned.
Or worse. Their vision may be spot on, but the market moved out from under them. In the time they took to make their MVP perfect, the world moved on without them. A competitor beat them to the punch, government regulations were passed into law, or the App Store’s rules changed overnight.
Or an unprecedented global pandemic eliminated their industry overnight. Imagine spending a year building an Airbnb competitor to have COVID reduce travel worldwide by ~50%.
Startups can take months or years to find “Product-Market Fit,” posing a challenge for non-technical founders. Even the ultra-wealthy find it difficult to cover team expenses for an extended period.
Many founders mistakenly believe they’ll be exceptions to startup failures, but high-profile founders with significant funding have made similar mistakes. Let’s take a look at a recent example.
A Billion Dollar Failure
In August 2018, Jeffrey Katzenberg pitched his idea for “NewTV,” a mobile-first TV programming startup, raising $1 billion in financing and appointing Meg Whitman as CEO.
In 2019, Quibi invested over $500 million in producing 75+ programs and 8500+ short episodes before its April 2020 launch. The launch gained 300k users on day one and over 1.7 million in the first week, with 3.5 million downloads and 1.3 million active users by the end of the month.
This success wasn’t enough. Two months post-launch, executives took pay cuts while the company secured an additional $750M in funding. Adjusting first-year subscription projections from 7.4 million to 2 million, Quibi changed paid and free offerings globally to offset losses.
This success wasn’t enough. Two months post-launch, executives took pay cuts while the company secured an additional $750M in funding. Adjusting first-year subscription projections from 7.4 million to 2 million, Quibi changed paid and free offerings globally to offset losses.
By September of that year, Quibi had just $200M left of almost $2B in capital it had raised and earned. The company looked for ways to keep the lights on, looking to either raise another round or even go public.
But it was too late: on October 21, 2020, just six months after its launch, Quibi announced that it was shutting down.
Why couldn’t Quibi raise more money?
Quibi’s had impressive launch figures, with 1.3 million monthly active users in one month, surpassing even the popular Clubhouse, which took a year to reach 2 million users. Projected revenues of $250-300M in the first year, a quarter of the way to $1B, were a remarkable achievement, a dream for most founders.
If we plug those figures into our model from before, the picture is less rosy. Raising $1B in seed money put Quibi’s valuation between $5-10B. Using our MAU, their valuation after launch was ~$130M. After showing revenues, even at a 15X multiple, Quibi’s AR valued them at $4.5B.
After two years of operation, Quibi had lost between $500M and $5B in valuation.
So what did Quibi do wrong?
It wasn’t the leadership team: Jeffrey Katzenberg is an entertainment mogul responsible for producing The Lion King, Beauty and the Beast, and Aladdin—Meg Whitman is a startup titan; in her ten years at eBay, she took the company from $4M to $8B in annual revenue.
It wasn’t the content: its shows received ten Emmy nominations, winning two. The tech was ready for Netflix-level traffic upon launch, and timing cannot be solely blamed, as mobile app viewership increased by 65% during pandemic-related lockdowns.
The easy answer is that Quibi failed because it didn’t reach Product-Market Fit. But why didn’t it reach Product-Market Fit?
Why Big Launches Fail
In 1962, Everett Rogers published Diffusion of Innovations, describing how new ideas spread across cultures and populations. In that book, he identified five categories of people that each approach new ideas in different ways:
1 – Innovators
Those who love trying new things may even be the people encouraging others to explore a new idea.
2 – Early Adopters
Those comfortable taking risks but want to form a solid opinion of the new idea before they vocally support it.
3 – Early Majority
Those interested in new ideas but want proof of their effectiveness.
4 – Late Majority
Those who dislike taking risks tend to question the need for changes.
5 – Laggards
Those who prefer the status quo because they know what to expect.
Why are these categories important?
These different approaches to new ideas affect how people view new products and the kinds of products each is interested in. A product that’s interesting to an Innovator is viewed as too risky by the Early Majority. And the Innovators and Early Adopters will completely ignore a safe offering that might be interesting to the Late Majority.
New products don’t have access to the entire curve at once. They can’t because the different parts of the curve aren’t interested in the same kinds of products. This is why Clubhouse attracts tech hipsters discussing AI, while Facebook is where Aunt Tina shares chemtrail videos.
Quibi failed by targeting the mass market but introducing a new product category that was not appealing to the Early and Late Majority.
Launching early and targeting Innovators and Early Adopters captures the most receptive part of the curve. You’ll gain immediate traction from an interested customer base, and as you improve the product, you access larger parts of the curve, accelerating growth towards Hockey Stick Growth.
The Product Development Cycle
Finding true Product-Market Fit is an ongoing process from launch, involving iterations and improvements. There’s no mythical Growth phase; instead, we move from Launch to Learning, assessing progress, readjusting strategies, and repeating the cycle.
Despite knowing the “Lean Startup” concept, many founders fail to practice it. Non-technical founders often plan long roadmaps and MVPs with extensive features, seeking low-rate partners to build everything at once instead of prioritizing launch.
This approach can be disastrous as development costs rise and bug rates increase with larger scopes, potentially turning a “6-month” project into over a year.
2020 taught us how much can change in a year.
Imagine spending two years perfecting a travel app, only to face COVID’s impact right before launch, or working 18 months on a location-sharing startup, only to have Apple restrict access. These are real examples.
Non-technical founders need efficient cycles for success. Efficiency means more than cost-cutting; it’s about delivering value. Prioritizing customers’ needs provides new value with each cycle, getting closer to Product-Market Fit and increasing long-term survival chances.
Finding the True Hockey Stick
If Product-Market fit isn’t binary, what does true Hockey Stick Growth look like?
The final stage of the Hockey Stick model is characterized by “rapid” or “surging” growth. After our inflection point, our curve begins to bend sharply upward.
For a curve to get steeper over time, it has to be “accelerating.” In math terms, its second derivative must be positive or increasing. That means that our growth, or the “velocity” at which our metrics change, is itself changing.
In startups, our growth rate naturally increases as we achieve Product-Market Fit. With each successive improvement to our product and to how we sell that product, our curve gets steeper.
Over time that curve looks like this:
In reality, the inflection “point” of the Hockey Stick model is more of an inflection “process.” With each successive launch, we improve our Product-Market Fit, increasing our growth rate and opening up larger and larger portions of the market as we go.
Use Our Free Metric Model
We’ve built a simple model of the above curves here. Feel free to make a copy of the spreadsheet and change the variables to see how they affect your growth curve over time.
Why You Should Launch Early and Often
Prioritizing launch over “perfection” means reaching our first customers in weeks, not months. That means less upfront investment, less exposure to risk, and less time waiting to show traction.
That’s time and money we can use to iterate through our inflection point, finding early Product-Market Fit and kickstarting our Hockey Stick growth. Many successful startups have followed this process of launching early and iterating over time.
Let’s look at three examples:
Airbnb
Airbnb launched as Airbed and Breakfast: its first listing was founder Brian Chesky’s living room. After focusing exclusively on SF, they expanded to select markets, catering to Early Adopters for their first several years before expanding into the mid-market.
Uber
Uber, initially UberCab, began with founders personally coordinating rides through livery companies in the bay area, targeting tech Early Adopters. I used Uber in 2012 to reach YCombinator’s Startup School and couldn’t wait to share it with friends. My mom didn’t try Uber until around 2016.
Facebook initially targeted Harvard students, then expanded to other Ivy League institutions and universities nationwide before opening to the general public. College students are a perfect example of early adopters, and Facebook’s limited access fueled discussions about the product.
Clubhouse
Another example of rapid growth is Clubhouse. Formed as Alpha Exploration Co. in February 2020, they launched their app within two months in April without any marketing or press. The app’s success was expedited using licensed technology, featuring a simple interface and limited features, allowing users to join available rooms or create their own.
After launching as invite-only, the platform gained traction within the tech community (Early Adopters), securing a $12M investment from Andreesen Horowitz. As interest grew, Early Movers from the general business world joined in, with Elon Musk’s appearance in January 2021 sealing the deal.
That same month, Clubhouse closed a second round of $100M, valuing the company at $1B. On its first anniversary, it announced it had reached 10M Monthly Active Users, publicly validating that valuation with its growth metrics.
Clubhouse’s MVP wasn’t “perfect”
Rather than spending months improving design or adding features like chat, scheduling, or clubs, they focused on the single feature they believed would bring success.
Clubhouse built their MVP efficiently, targeting customers who would overlook rough edges or prefer them. Leveraging customers’ psychology and desire to feel “in the known,” they spread the app through them.
A Playbook for any Non-Technical Founder
On paper, it’s simple enough: define your MVP, have your technical partners build it, then take it to customers for real-world feedback.
In practice, many non-technical founders get stuck on the second step. They struggle to find, vet, and manage their technical teams.
They hire providers that overpromise and underdeliver, turning what was supposed to be a two-week process into two months or more.
Let’s show you how to fix that.
How To Prevent Your MVP From Failing
How do we make sure our clients build the right MVP? We use a one-week roadmapping workshop called the Nerdstorm. We’ve tailored and fine-tuned this process to turn ideas into something tangible. More than just a toy—something real that you can take to customers and sell and fundraise with.
Your new product shouldn’t take six months and $100K+ to bring to market. This is why we developed the Nerdstorm as a 5-day product, design, and development sprint built to get The Next Big Thing™ out of your head and into the hands of your customers.
We have used this approach repeatedly to take concepts to clickable prototypes in a week. Instead of having calls about calls, you should be raising capital, closing your first customers, and testing new business outcomes.
If you already have the capabilities to do this, great, as I have yet to see a faster, more affordable approach to kickstarting development and getting customer feedback in days, not months. If not, check out these success stories and see if we can help.
Nerdstorm Success Stories:
- How BlueVerse built & launched a $10K prototype in just 5 days—and raised a $100K+ pre-seed round in the process.
- How Limber Health built the future of Physical Therapy in 3 months—securing new Medicare billing codes and raising $11M in funding along the way.
- How Wellness 4 Humanity launched the first national COVID vending machines and became a national media sensation—in just 12 weeks.
Ready to launch an MVP?
The Minimum to Take Away
I’ve seen a pattern with early-stage startups: those who figure out how to maximize their resources and stay focused on their primary goals have a higher likelihood of success than those who try to do it all. This is especially true when building an MVP.
Be strategic about your priorities, and don’t be afraid to say no to something that doesn’t align with your vision. Consistent focus and the ability to adapt are two keys to launching incredible products in today’s fast-paced and competitive market.
Stay focused, stay agile, and you’ll be on your way to building a product people will love. Don’t waste precious time and money on ‘perfection.’ Aspiring founders, keep this in your mind: you don’t have to get it perfect.
You just have to get it going!
Put the MINIMUM back in MVP. Get your offer out the door, try to sell it, and get feedback. Iterate and improve. That’s the secret sauce.
Remember: perfection doesn’t equal profitability.