Ep. #656 - Building a Startup MVP
Covered In This Episode
When talking to investors, one of the first questions they tend to ask founders is, “Do you have an MVP?” So, what is an MVP or Minimum Viable Product? What is the process of building a startup MVP? To help you figure things out, listen to the Matts discuss building a startup MVP.
The two Matts have been there before. Several times, in fact. They share their experiences in building tech startup MVPs. Matt and Matt also talk about the do’s and don’ts when making one.
Tune in to Matt and Matt discuss everything about building a startup MVP in this Startup Hustle episode.
- The greatest Matt (0:08)
- Welcome to Part 28 of the series (0:29)
- What is an MVP? (3:14)
- The importance of feedback (5:14)
- An MVP shows that you are gaining traction (7:43)
- What to include and not to include in your MVP (11:25)
- The biggest mistakes when building an MVP (14:17)
- What is your MVP? (16:19)
- Ask yourself questions (19:22)
- Why focus on a specific niche first? (22:51)
- The importance of marketing research and data (29:20)
- Reach out and consult experts (37:43)
- Be good at one thing first (41:23)
- Don’t mismanage your resources (42:17)
- Wrapping up (44:34)
The theory around the Minimum Viable Product is figuring out where we draw the line. These are the absolute minimum things we need to do to get in front of a customer and validate that our assumptions are correct, that this provides value to them, and get feedback about what we should do next.Matt Watson
When we say goals, ask yourself, what’s your future vision for the products? Where do you see things going? Because your crystal ball is guaranteed to be broken. But you got to have some idea about what you’re looking for, like making a hypothesis. But you want to test your testing. Is this going to work? Is this not going to work? If you don’t have your vision squared away, and in order, if it doesn’t exist, no one’s going to be able to build it. Things will go sideways in a hurry.Matt DeCoursey
The important aspect of this MVP is knowing who your audience is, right? You’ve also got to know your niche. Who is your audience, and where you’re going to focus first? That’s a perfect example where it’s hard to solve the problem for different personas and industries perfectly. Whereas if you can pick one and get really good feedback, you can potentially expand other ones later. But if you dumb down your product too much, it won’t be interesting to any of them.Matt Watson
Misinformation and miscommunication slow things down or just pushing in the wrong direction. Setting general parameters, that’s why I said to be specific about what you want. Be good at one thing before you try to be good at three. Be great at one thing before you try to be okay at four things, which just doesn’t get it done.Matt DeCoursey
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt DeCoursey 0:00
And we’re back. Back for another episode of Startup Hustle, Matt DeCoursey. Here with Matt Watson. Hi, Matt.
Matt Watson 0:08
I think you should call me the MVP from now on.
Matt DeCoursey 0:12
Or the goat.
Matt Watson 0:14
That’ll work. I’ll take goat.
Matt DeCoursey 0:15
Greatest, greatest of all time, maybe
Matt Watson 0:18
The greatest Matt.
Matt DeCoursey 0:19
I mean, Matt valuest player?
Matt Watson 0:26
Something like that. I couldn’t come up with something I was thinking about.
Matt DeCoursey 0:29
Yeah, you know, the hardest part about doing this show is the apparent lack of planning about what we’re going to say. I like the ability to be off the cuff and like really unfiltered on Sundays, and then it backfires. Now, you know, we use the term MVP, and as a as a sports fan, I think, most valuable player, but in the world of startups, that’s not what an MVP is. And we’re going to talk all about that during today’s episode of Startup Hustle, which by the way, is part 28, a 52, and our 52 part series about how to start a tech company. We’re walking your way we’re walking you through the process and trying to tell you about all of the great and really terrible stuff we’ve done in our 10 plus years, multiple exits. Hey, Matt, do you know that between the two of us we have two really big software exits?
Matt Watson 1:24
Between the both of us? Yeah, that’s great. Yeah.
Matt DeCoursey 1:28
I mean, they’re both yours. So yeah, you liked what I did there now. Now we’re going to talk all about MVPs and hopefully get some really good advice. I think the follow up to last week’s episode about buy or build is a good a good foundation for this. Before we get into that today’s episode of Startup Hustle is brought to you by FullScale.io, helping you build a software team quickly and affordably. That’s the business that Matt Watson and I own together. And we help you build a team of experts. So if you can afford the team you want, and you need go to FullScale.io. And let us tell you all about it now. Now, I have one other announcement that I think it’s important. Did you know that Pipeline entrepreneurs has taken over Startup Hustle during the last week, August, just a couple of weeks from now. And we’re excited to welcome our guest host Melissa Venson. She’s got five straight shows starting August 30. And she’s going to talk with the other Pipeline entrepreneurs. Now, if you’re not familiar, Pipeline entrepreneurs is an awesome, I don’t want to say it’s an accelerator and incubator. It’s more of a mentoring program picks and really, really awesome entrepreneurs in our region of the country. So it’s Kansas, Missouri, and Nebraska, right in the dead center of the country. But man, they have a Hall of Fame. They do pass from the past episode. So I’m really excited. So Melissa runs that program. And she’s you’re going to hear from her a lot more on the show. And you are going to see her on Startup Hustle TV soon as well. So welcome to the family. Melissa, we’re glad to have you around. Now. She is an MVP, Matt. I’m not sure that way.
Matt Watson 3:02
So are you MVP Minimum Viable podcast host?
Matt DeCoursey 3:07
Oh, by the way, since that podcaster, Matt, because
Matt Watson 3:12
you Okay, ma P H.
Matt DeCoursey 3:16
I’ll be here. I’ll be here to pick up your slack for the rest of the episode to Matt. So all right, dude. What do you think MVP, I mean, in terms of startup products, and whatever, as you mentioned, a Minimum Viable Product. And that’s a technique that’s designed to deliver products with sufficient workable features in the shortest amount of time. And we’re gonna get into more of that. And that means basically, additional features that you develop after the MVP is achieved are based on what you learn from your MVP itself. Now, look, this is probably for many of you going to be the most important part of the seesaw that goes back and forth when it comes to success or failure, because you can really get caught up in this. And stay on the shitty side of spending timelines, budgets, runways, a lot of that, or you can move fast and break things, which is my method, and figure out how to fail quickly or what you’re onto. So when you think about MVP, Matt, I mean, what do you got?
Matt Watson 4:21
Well, when you’re creating software, creating an MVP is is always hard, because you don’t know where to draw the line, right? Like, how much do we create what you know, how many features do we need to build. And as a software engineer, we’re usually the kind of guys or gals that would hide in the basement in the lab with the lights off and just write code. And never actually go talk to customers and find out what they want, or never ship a product like we’d always find an excuse and a reason not to ship the product because we want to keep improving it or fixing it or whatever. And really the theory around the minimum viable product is figuring Okay, where do we draw the line, these are the absolute minimum things we need to do to get in front of a customer and and validate that our assumptions are correct that this provides value to them and get feedback about what we should do next.
Matt DeCoursey 5:14
And the feedbacks, the key part of that like, this isn’t, this isn’t like what you’re going to be judged on. And there’s so many uber successful people that have made comments along the lines of, if you don’t look back at your very first launch, or release with sheer terror, later, like, Oh, my God, I can’t believe we put that out, then you held on to it for too long. Part of what the MVP process is really designed for and utilized for is to help you understand what people what kind of adoption, you’re going to get within the things that are involved with what you’re building. And I’ve made this mistake, you know, when we went to launch gigabit, we put a bunch of like sales tracking, and just like general like cheeping, like logging features in there, and then we launched it, and then we found that no one used them, and we spent a lot of time and money building it. And in retrospect, it would have been better if I could have that money back for a feature that no one gave a shit about. And instead put that into promo mainboard have a $3 billion, maybe we’d have the $3 billion valuation and not Calendly
Matt Watson 6:22
or, or you talk to those customers, and they tell you about three things that you’re missing, that you really, really needed. So it’s like you built three things that you didn’t need, and you you burnt the money that you could have spent during building three things that you really didn’t need instead, right? So that’s always the struggle you have. But it’s also it’s about the key thing about MVP, and a startup. And it’s kind of the nature of a startup, right? It’s usually you’re trying to solve a problem that other people haven’t solved before, or solve it in a different way. And all those things, right. So think about me, I love SEO, I love content marketing. If you message me and said, Matt, I know you love content marketing, I know you have this particular problem, because I understand what you do. But I know how to solve it. And we’re going to solve it a different way. And I really want your feedback, right? I get excited, like, Oh, I love that thing. And if you can solve that I’d be so excited, right? And it’s all about then having the MVP to put in front of me to get that feedback to get me excited. And for me to say yes, this, you’re right on track, I would pay for this, please get me signed up immediately, right, or these are the three things that you need. If you can deliver, add these three things to it. I’m a customer, right? Like, you’re trying to get your your product in front of somebody like me for whatever that specific thing is. Get that key feedback and get them signed up. And then take that feedback and keep iterating.
Matt DeCoursey 7:43
There, there’s another lane on this highway as well, that I think is important is, so we’ve spent a lot of time and you know, I think probably the most popular topic, that of conversation that I get into other than just building software is, you know, as fundraising and when you have something tangible, and you can show it like, Hey, here’s my MVP, and then you eat the shame with it. You’re like, hey, look, this isn’t certainly not the final thing. This is this is our MVP, look sophisticated investors know and appreciate the value of that part of the process. So they’re not going to be highly judgmental. It demonstrates that you’ve got traction, like in the Startup Hustle, Facebook chat, I often asked questions that are you know, polls are just like, hey, what’s something you hear from VCs before? They don’t write you a check? And in the number one pot, the most popular answer to that question was, call us back when you have some traction? Well, having an MVP and something that’s demonstratable. And tangible and real is a completely different conversation with potential funding partners. Do you agree?
Matt Watson 8:58
Absolutely. Just think the other day we sent Jeff Bezos to space, right? And it’s like, Hey, we’ve got an MVP, we’ve proven we can do it. Now. We’re selling tickets for $250,000 For anybody who wants to go and let’s go raise a billion dollars in funding to start a space, you know, vacation trip thing or whatever. It’s like we’ve proven we can get a human being there. I mean, one time we did it one time we proved it, right. We’re otherwise we’re all like there ain’t no way in hell, somebody’s gonna do this. And I put money into it and you’re gonna blow me personally. Yeah. But now it’s like, okay, they prove they can do it. They prove there’s a market. They’ve got customers lined up, man, as an investor. I’m excited. How do I put my money in this thing and put fuel on the fire?
Matt DeCoursey 9:40
You know, another thing too is investors especially most institutional money, meaning funds and people that you know, family offices and stuff. They love writing checks when they’re lighting the fuse on marketing and sales, meaning yes, there’s so many there’s so many unanswered calls. Questions for a product that hasn’t been built. And, you know, we’ve been joking about the fact that we’re about a month behind on our timeline for our 52 part series that was supposed to occur all in 2021. Well, the reason that we we’ve owned that so outwardly is because that’s what owning the startup is like, too. And the thing is, is it’s very easy for investors to put money in things that haven’t been built yet that ended up not getting built because the runway ends or they need more money, or they do a lot of different things. By the way, in regards to billionaires traveling to space, you know, there’s been a lot of talk about UFOs or UAPs. Yeah, that stuff lately. And I realized those are probably just billionaires from other planets. I mean, if we’re one flying around in the skies, I mean, there’s probably just billionaires from Saturn or wherever the hell they’re coming from. So problem solved there. And you know, they’re just they, but the MVP part of the rocket that Bezos flew in and by the way, if you do get your own rocket, don’t land it, and then tell all the people at your company, you paid for this. Thank you. Yeah, they’re not going to empathize with your rocket ships. You can’t get away. Yeah. Yeah. You need to pee in this Gatorade bottle, because you can’t take a break. Yeah. So anyway, yeah, there are tasteful ways to launch your own rocket to space and come back. And that’s
Matt Watson 11:25
something we should we should talk about, I believe an MVP is is what you need to include in your MVP or don’t need to include to some degree, right? Like, as a software developer, it’s one thing to create an application. It’s like, okay, you can log in, and you can add things. And you can search this and do this do the functions, but it’s like, oh, yeah, there’s no way to actually sign up for an account. If you want to sign up for an account, I gotta like, have my developer like, go behind the scenes somehow, and like, create your account and your user. But you know, what the user will never know, right? Like we got, we don’t have to spend our time on that stuff. We spend our time on what the customer is going to see. Right? So we’ve had other episodes about technical debt and stuff like that. And some of that when you’re working through your MVP, it’s all about prioritizing that. It’s like, Hey, we’re just trying to get what the customer logs into. The customer does the functions, they need this key integration, we need whatever. But there’s a lot of other loosens and shit behind the scenes that nobody really knows about. And nobody cares about. And we don’t have all these advanced features. There’s no single sign on, there’s no reporting. We don’t have a billing system yet. Yeah, you can’t export the data. Like, yeah, there’s all these things, we haven’t done any of them. But we’ve proven that you actually give a shit enough that we should spend time on those things. Right?
Matt DeCoursey 12:38
In layman’s terms, it’s okay to be Oz and be behind the curtain pulling different strengths and just make it work out. So Matt’s talking about the cyan and back to like a very granular, like, simplified version of that. You don’t have to build an overly complex Super Admin environment on your MVP that has Advanced Business Intelligence dashboards and shit like they’re like, and Matt and Matt’s example. There, the signup doesn’t do anything other than let the user in and maybe populate some info in the database, because that stuff doesn’t matter. Yet. It doesn’t matter yet. You’re trying to figure out if people give a shit. Dude, there is literally like probably millions of MVP products, they got launched only for people to realize, shortly thereafter, if not instantly, that there wasn’t a market for it, that it wasn’t a good product market fit. Or maybe their idea wasn’t as brilliant as they thought it was. And that’s that’s part of it. Because look, you’re not going to spend a whole you’re not going to spend a shitload of money build an MVP. Well, you shouldn’t, or you don’t necessarily need to. And the idea of that is to some of its capital preservation. We really earlier was over overbuilt and stuff and Giga book that we then didn’t use. That’s fifth, probably 50 grand. Where the time effort energy. I mean, I can’t get I can’t get that back. I can’t I can’t go get a refund on that on that labor. Yep, absolutely. So Matt, what do you think the biggest mistake is when founders, like build an MVP? I mean, we’ve talked about over building it a little bit. But like when you get past that, what are a couple other things.
Matt Watson 14:17
It’s not talking to your customers and users enough, I think that’s one of the big ones is getting in front of your customers, even if you don’t necessarily have a whole lot to show them. But just getting in front of them, you know, find find people on LinkedIn or whatever and, and offer to buy him lunch, whatever you got to do, right? And be like, Hey, I’m trying to build this new thing. My target audience is people like you, I’m just trying to understand this problem. Try to get your feedback, right. Learn the industry. Understand how people solve these problems today and figure out how you can solve them better. And you’re gonna have to solve them like 10 times better by the way, and get feedback from actual users. Instead of you just thinking you’re the expert and building a bunch of stuff and then you ship it and nobody cares.
Matt DeCoursey 15:00
So, is it fair to say that if we had a checklist of things that were to observe and and look at before creating or launching an MVP, that could be helpful?
Matt Watson 15:13
Yeah, that would be good. Okay.
Matt DeCoursey 15:15
Well, that’s the it’s funny that you that you mentioned that, Matt, because we do have a checklist. And before I get into that, as a quick reminder, today’s episode, Startup Hustle is brought to you by full scale.io. We make hiring developers easy. It’s that simple. Like that, um, hire and keep them background stuff to protect your intellectual property and find the best people you can. And, you know, you know, Matt, do you know that we have to go through about 40 applicants to hire one person?
Matt Watson 15:46
So that’s crazy. Yeah, that’s crazy.
Matt DeCoursey 15:49
No, it’s a lot. It’s a lot of work. But we’re gonna we’re doing it upfront for our clients. So they can they can get to work on building quality people other things. So yeah, do that’s the key. That’s the key ingredient. So with a checklist for creating an MVP, like let’s start with some questions. Here’s how about a few things we should ask ourselves. Let’s look within, before we expand outward, Matt, we’re real sad moment here.
Matt Watson 16:16
deep thoughts by though deep,
Matt DeCoursey 16:19
deep thoughts by Matt, we’ll just leave it there. I don’t think people I don’t think people listening understand how difficult and confusing it is to have two founders of a company both named Matt. First off, neither one of us can be Matt at FullScale.io. Because who the hell would that go to? And then we have to use both either be Matt or the other Matt, or Watson or Deco? is what they call us now, because nobody knows when you just say, Matt. All right. So Matt, what I think one of the like, you’re talking about things you’re going to ask yourself is like, okay, for me, I think you need to ask yourself, What are the two, maybe three at most, most valuable things that whatever I’m building should do. Like whatever it is, like, we’re gonna leave this pretty wide open. I don’t know what your MVP is going to do. But there are two or three things, and maybe only one that matter to your future users. A key problem in this, you’re asking this question, because that’s what you have to be aces at.
Matt Watson 17:20
Yep. And everything needs to build around it, right. Like our goal was to solve X problem, and everything else isn’t supportive. That goal. And
Matt DeCoursey 17:31
so other examples, what another example, once again, we’ve used GigaBook, a lot and you compare Calendly Calendly does one simple thing, and they do it? Well, I mean, they really do they do it? Well, it’s connected to Google Calendar, and get an online booking link. And that one thing was so important to so many people that it became a very widespread use products were more sophisticated, more setup, more build a lot of that stuff like GigaBook was it served a different type of client, but it was way more intensive to launch anything. So that’s the thing is like, what do you want to just be awesome at because if you’re, in this day and age, there’s tons of tools and things and solutions were being awesome and aces at one thing and get it done?
Matt Watson 18:17
Yeah, and everything should be in support of what that goal is.
Matt DeCoursey 18:21
Right? So with that, though, when we say goals is like I mean, so what what ask yourself, What’s your future vision for the products? Like? Where do you see things going? Because your crystal ball is guaranteed to be broken. But you got to have some idea about what you’re looking for, like this is the this is also forming like in third grade at the science fair, I had to make a hypothesis. And I didn’t know how to say that in third grade, but you want to test your testing. Is this going to work? Is this not going to work? What’s the vision for going forward, if you don’t have your own vision, squared away and like, if you’re not in order, if it doesn’t exist, no one’s going to be able to build it, you’re going to it’s just things go sideways in a hurry.
Matt Watson 19:06
When we’re when you’re starting a new company, somebody’s got to have the vision of where the company is going. And everybody’s got to buy into the vision and follow along too. Right? So it’s important as the founding team to to have that vision and know where you’re going.
Matt DeCoursey 19:22
What are some things that you would ask yourself?
Matt Watson 19:27
Oh, man, why am I doing this?
Matt DeCoursey 19:33
I did I did ask yesterday, which would by the time this comes out would be a couple of weeks ago you may have seen in the Startup Hustle chat on Facebook. Get give the best advice you can to someone that wants to start a business and he has only three words. There are very very interesting answers. Everything from Good luck kid gets get sleep now. You know a lot of different things but did you like my answer? that Startup Hustle podcast. Yes. The best answer of all of them. So, yeah, come join us. Listeners, come join us find us. Do we have all the different hosts from both podcast and Startup Hustle TV participate in that and it’s, it’s clean and non spammy? The way we like it. So a good grip. I think another thing to ask yourself now is just simply like, what am I? What? What are my expectations? Right? Like?
Matt Watson 20:29
Where are you going with this? Right? Like, is your is your goal to go public and ring the bell on Wall Street? Is this a lifestyle business where you just want to get a couple of customers and make a few bucks? And it’s like, just a business for you? Do you want to raise capital? You know, like, you want to go to Silicon Valley and sleep in a van and raise raise money out there? Like, what are you doing? Like, what is the goal?
Matt DeCoursey 20:52
This all sounds so fun. Except for the sleeping in the band part. Is that? Likely? That’s the only affordable housing? Yeah, all can Valley.
Matt Watson 21:04
Yeah, renting a car is is cheaper to rent a car and sleep in the car, I think than to rent an apartment,
Matt DeCoursey 21:09
get an old van, the older the better, the fewer windows the better. Alright, so we’re gonna move on, I got a different section of the checklist, Matt. So you know so much about all right. Look, if your business I don’t even care if it’s a tech business, if your business doesn’t solve a problem, your business sucks, you’re never gonna make a lot of money on it.
Matt Watson 21:29
You’re not, but um, experience and lifestyle brand that everybody’s going to love and flock to. Okay. It’s got a solid,
Matt DeCoursey 21:45
name five of them three of those.
Matt Watson 21:49
It’s got to solve a problem. It’s got to solve a problem that people are willing to pay for too, right? Going to talk about consumer stuff. Like, we know a lot of people, my wife, you know, they all got problems, right? And you can find solutions to some of those problems. doesn’t mean they’re gonna pay for any of them.
Matt DeCoursey 22:07
Yeah, yeah. I mean, I mean, that’s really it’s so like the problem. So it’s a solve a problem. And then, you know, I think said the other things is that the sense of value is like, Who’s this aim to? Right? Like, who is your who’s your target here? Who’s most likely to use this? And find utility in it? So you are you? Are you business to business? Are you business to consumer? Like, are you an enterprise solution? I mean, so much of that has a lot to do with your approach. And you know, like, Alright, here’s a good question to add, we’re gonna go back, we’re going back to zen mode, map. Art, would you be willing to buy this product? Would you be willing to buy your own product? Because if you’re happy if you’re struggling for that, don’t start the business?
Matt Watson 22:51
Well, and I think what’s really important aspect of this MVP is knowing who your audience is, right? Because if you’re building an MVP, let’s use gigabytes as example. It’s like, Hey, we’re building a scheduling application. If you build it in such a way, that it’s kind of complicated and does a lot of things. And then you go to, you know, a hairstylist, and massage places all this right. And whatever you show them, if it’s kind of very generic, it may, it may not click with them. And you may not get this going to response, where if it was like really tailored to a massage place, or whatever, and the graphics and all the lingo and all that are like perfectly aligned to that, it might click a lot better. And they’ll be like, oh, yeah, this is cool. This perfectly solves what I need, right. And that’s part of the issue of the MVP is you’ve also got to kind of know who your who your what your niche is, who your audience is, where you’re going to focus first, because that’s a perfect example where it’s hard to, you know, perfectly solve the problem for different personas and industries, where if you can pick one and get really good feedback on that one, you can expand other ones later, potentially. But if you dumb down your product too much, you’ll dumb it down too much that it won’t be interesting to any of them.
Matt DeCoursey 24:00
Yeah, I agree. I think that 10 years ago, that might have been a different conversation. But now things are hyper specific. So you can find, you can find a lot of niches within very well established and highly competitive things. And we like to we’ve been using gega book recently as an example. Like, honestly, if I could go back and do it again. So I had an opportunity several years ago, when the escape room the whole thing, like became a big craze, and there was there just wasn’t a good booking solution. And I realized that because we had a bunch of people signing up and reaching out and asking stuff. We could have taken kind of a hard pivot of sorts and just really specialized in that we didn’t, I saw two competitors that did and they’re killing it. They’re killing it because they differentiated themselves within a crowded space by being really really good for an industry and something that was rapidly growing. Yeah. You know, six or seven years ago, people weren’t ma Escape Rooms existed, but they caught on fire. And all of a sudden they were everywhere. There wasn’t, there wasn’t an industry specific, you know, scheduling or booking platform and to like I said, two of our competitors, we weren’t really ready to make that pivot, and weren’t ready. I don’t know if we would have pulled it off. But they chose to own the entire industry with that. And there’s enough meat on that bone that they’ve made a lot. They’ve guaranteed made a lot of money because the more specific your solution is, and the more ready to go out of the box. Well, the more you can get for it to like, if it’s already if you’ve thought it out, we were talking about HubSpot in the last episode of buy versus build so much of what you’re paying for with stuff like that isn’t the technology. It’s the thought and consideration that went into what you’ll need. So you can even get it yourself on Sundays.
Matt Watson 25:56
Well, another good example of this is VinSolutions. Right? We built a CRM system for car dealers. Did we compete with Salesforce or HubSpot? Nope. It was industry specific. You know, VinSolutions actually had the concept of a car in it right like Salesforce and HubSpot. Like there’s no cars in it. Right, like industry specific solutions. And that’s when you talk about like your minimum viable product is really the key here is, is trying to figure out a specific niche that you can focus on first, and get traction in instead of trying to generically solve the problem for too many people. I think that’s the really the key lesson here.
Matt DeCoursey 26:30
When you sell that company for like $150 million, sometimes up close in that ballpark.
Matt Watson 26:36
Some or something like that. Yeah.
Matt DeCoursey 26:39
For those of you listening, that’s true story, Google MaTT, Google MaTT and not and not the YouTube Matt Watson. There’s a lot of Matt Watson is out there. Do you know that there’s a Matt DeCoursey. That’s like the prime like very high government official in Canada. I get tagged a lot in Facebook things and they tagged the wrong Matt DeCoursey. I also put my own name and Google the other day and you know how you can always tell what other people are searching by what drops down. It said Matt DeCoursey Full Scale and then it said Matt DeCoursey net worth so for those of you that are out there fact checking. Good luck on that one.
Matt Watson 27:18
Yeah. Alright, you scared shitless
Matt DeCoursey 27:20
Your net worth was according to the picture in Startup Hustle chat on Facebook the other day your net worth was somewhere around six cents.
Matt Watson 27:28
Yeah. And mines of that, mine if you do Matt Watson it says like Matt Watson athlete like comes up and like stuff like that.
Matt DeCoursey 27:36
Matt, well, that could be you because you are. For those who you wonder you Watson and go watch Startup Hustle TV, the first couple of episodes, we literally have a section that highlights Matt, surprise, athleticism. Yeah, jumped over like a five foot tall stack of Jenga blocks successfully, and did a pretty amazing high jump at the arena.
Matt Watson 28:00
One day I was almost qualified for the Olympics.
Matt DeCoursey 28:03
Your basketball skills from a ball handling your ball handling is subpar. But you did beat me at Pop-a-shot. The Dave and Busters I was embarrassed about that, by the way, never was a good free throw shooter. Alright, so you know, with a sense of value and understanding in Okay, so as someone that’s like, How’s the market or promoter and sales gene and me, look, this is where this is really important early, because it’s this kind of value that can cut and should shape your approach to marketing. Because if you identify what the problem and the value proposition is, so with Giga buck, we made this mistake, because we were like, it’ll provide convenience, take bookings online collect payments, boring, how about have some peace of mind unchained yourself from your business? Those are the marketing lines and approaches that people really responded to, because they’re like, shit, these people get me. They know the problem. They know my phone’s ringing, my texts are going off all day, I want peace of mind, I want to be able to step away from the business and feel like I’m not chained to it. And I mean, those are the kinds of things don’t do not underestimate the value of that. Okay, so, you know, comment there.
Matt Watson 29:20
What? Well, so I think in relation to this, right, like doing market research is important, you know, talking to analysts. You know, hopefully you’re solving a problem that maybe the analyst and everybody aren’t quite up to speed on, right, maybe you’re ahead of the curve. But talking to industry experts, analysts, stuff like that, and getting feedback about the product you’re trying to build can be great. Figuring out your go to market strategies, testing, marketing, all that kind of stuff is is important as well. And it all kind of goes hand in hand around. What is the what is the minimum viable product product we’re trying to build and testing do people care? Will they pay for it? How do we get tract customers like these are all problems that you have to solve early on. And they all go hand in hand and, and you can’t like forget about one and then wait a whole, but hold on a whole bunch of time and then start on it like you got to work on all these things in tandem a little bit.
Matt DeCoursey 30:15
So with that, though, I think this last section I want to talk about is, I think if you, if you ignore or don’t give consideration to this stuff, I think you’re kind of wasting your effort with the MVP. And that’s just talking about data. Goals. Like, the purpose of the MVP is to get feedback that we talked about it part, you’ve been able to parlay that effort and to fundraising. So you want to like understand things like customer acquisition cost, or at least at a minimum, I mean, everything from how much does it even cost to get an ad? Click? Right? Yep, then how many people sign up and some of that, because you’re not going to get to the next phase of capital raising, or you’re just going to be throwing a lot of money away if you don’t have a basic understanding of that. Because these are the questions that are going to come up when you do get that meeting with the venture capitalist or the investor. And if you have no ability to say, Hey, this is a great product, it solves a need. Okay, cool. How much does it cost to acquire user?
Matt Watson 31:17
Well, in clue and things like total addressable market, right, like, how big is the market for this thing? Now, what you don’t want to do is say, we’re gonna go sign up 1%, and we’re gonna be trillionaires. Like, you don’t want to do that. But you do want to know, like,
Matt DeCoursey 31:31
Matt, yeah, we’re 25% of market share. And your first six months, I hear people say that shit,
Matt Watson 31:36
Their hockey stick shows that after nine months, and you know, that’s 1% the first month, the, but the key thing is like, really, oh, we’re gonna sell a software product to massage places. Okay, well, how many are there are 67,000 Okay, well, now you have some sense, right? It’s not 300 of them, it’s 67,000 of them, whatever the numbers are.
Matt DeCoursey 31:57
And how many of them are potentially served by a competitive product already? Anything, you know, is a little bit in the last couple episodes. Yeah. So the thing is, is one of the things is, if part of your future growth strategy and involves prying people away from something they already use, you need to really, really, really, really know and understand that what you what you’re building and what you launch has to be significantly better, not just a little bit better, you’re not going to win, because it’s $2, a month cheaper, and a good example, and people don’t care. And a good
Matt Watson 32:27
An example of this would be like Cloud Hosting, right? It’s easy to say, oh, there’s people have like 10 million servers, but only 2% of it has moved to the cloud. Like we know, there’s a massive amount that still hasn’t adopted this technology, and we’re entering this space, and we’re gonna compete with these competitors, or it’s an untapped market, right, like understanding the market dynamics is really important. And the better you can tell that story to investors, the better off you’re gonna be.
Matt DeCoursey 32:55
So when it comes to the data, the things that you like, some of the things and we can just, let’s just do a little brainstorm, here, you’ve got everything from like trends, forecasts and surveys, okay, so that’s, that’s, you know, you can create what I just mentioned, without an MVP, right? You don’t need a minimally viable product to take some stabs at that, what you want to look at is like, for example, I will first off the customer acquisition cost, in my opinion, is is like, up there that’s on the gold medal podium without a doubt. And it’ll tell you a lot and and being able, you don’t have to prove it on like, like a massive sample size, you got to prove it a little bit. And it’s as simple as like, how many ad clicks will result in someone signing up for a trial. That’s a good place to start. And then other things to, I think, involve engagement, like, Alright, so how many of those people actually come back? Yep. Right. Like, it’s one thing I can generate, if I gain generate on a billion free trials, but if 0% of them convert, who cares?
Matt Watson 34:00
How many have become qualified leads, right?
Matt DeCoursey 34:03
And other things, too, is, like you mentioned, like, some of the biggest mistakes that people make is not listening to you or talking to the users, like, call them. Literally call them pick up the phone or email them or do whatever and just be open and honest. Say, Hey, first off, thank you so much for your interest in our product. As you may or may not know, we’re new, and input is valuable, your feedback is valuable, and we’re trying to make it about the user. We’re trying to create solutions that you find valuable that you are excited about that make your life easier. What are we missing? What do we need to do different and then listen for the echo, just listen for like, you’re gonna get your it’ll look like a long tail because you’ll have some things that will get mentioned a bunch and then you’ll have a long string of things that get mentioned once. Forget about the ones look for the ones that are repetitive. That’s how you analyze Damn VP, I mean, it’s not as simple as it can be putting out all right. I mean, I don’t know how to simplify even anymore.
Matt Watson 35:06
Well, and that gets a little bit back to what we talked about earlier with Gigaba. Right? It’s like you spent all your time and you can build these three features that nobody cared about, or, or do you instead focus on the 80%, right? Like the 80% of all the people care about these things. And then we very selectively kind of chase these other little things. So it’s staying focused on that. 80% Because people will always ask for dumb shit.
Matt DeCoursey 35:29
That never Yeah, and yeah, you don’t have you don’t want to chase the shiny things. Because remember, you’re early its MVP, you want the minimally lovable product. Okay, go, what can what’s what’s the most exact things that you can do to make people love your products? So all right,
Matt Watson 35:43
and I’m lovable podcaster
Matt DeCoursey 35:47
There you go. I’m the I’m the MLP. Without a doubt, without a doubt. Yeah, you know, me, Matt. You know, it’s really Matt, that makes this show what it is?
Matt Watson 35:58
Matt DeCoursey 36:01
All right. So, back to the checklist. Now, as we’re, you know, we’re approaching the end of our time here, I’m talking about an MVP. By the way, for those of you listening, we often enter the shows going, Man, are we gonna really have 40 minutes of content, and then we get to like, the 40th Minute, and we’re like, halfway through what we wanted to talk about. So. Yeah, so yeah, research, man. I think the research thing is key. I, I just have had too many people there, hey, I don’t have any competition. And then like, I’ll Google it. Like, in one minute. I’m like, not only do you have competition, you’ve got a lot of it. Yes, like no know what you’re stepping into. Like there’s, there’s a, there’s a jumping and building wings component, you know, when to entrepreneurship. But if I’m going to do that, I need to know that I’ve got all the shit to build the wings before I jump, because otherwise, that’s just one more thing to do on the way to the Kenyan floor.
Matt Watson 37:02
And in some ways, it’s more dangerous to be building a product that there is no existing market for. Right? Like, because now you have to go educate the market about the problem, or you call somebody like me, who’s the CTO of a company and you’re like, I can solve this problem. But me I’m like, Yeah, but I got 10 other problems that are more important than that one, right. That’s not the current problem of the day that’s hot in the industry, your your might be solving a problem that’ll be important, like five years from now, but it’s not a problem today. And so sometimes it’s really scary to get into that shape that place do or the industry doesn’t know that they even need the problem, the solution that you have,
Matt DeCoursey 37:43
yet making making a market, or filling up a marketplace are two of the of the most challenging things that a new business can can handle. Because it just it’s just a challenge. Now, I’m glad you brought that up. Now, because the last thing I’ve got on this list is consulting an expert. Reach out to people like you mentioned, being a CTO of a company, you’ve been a founder, you have successfully exited to huge software companies. And Matt, one thing that I’ve always noticed the reason I even know you is because I reached out to consult an expert. Yeah, about Giga book years ago, you were super accommodating, we met and had breakfast together at a local place near where we live. We didn’t talk for several months after that later, I ended up asking you to be interviewed in my book, we became friends later became business partners, podcast hosts, all that stuff. You never know where these things are going to lead. But like you then very one of the things that people always mentioned about you is you’re very accommodating to giving people input, I have to, like, as long as I don’t have to like really, really, really go out of my way to do it. Like, if you make it convenient for me to give you input, I’ll probably do it reach out, you can email me Deco, D-E-C-O at FullScale.io. You know,
Matt Watson 39:02
As long as I can tell you your baby’s ugly, and you’re okay with it, you can take it.
Matt DeCoursey 39:07
I always give it I do always give a disclaimer, I say, Look, I’m going to give you transparent, open feedback. But what I’m not going to do is argue with you about whether I’m right and you’re wrong. If you want my input, I’ll give it to you. There it is, and you can’t get mad at me if I don’t tell you what you’d like, what if I don’t tell you exactly what you want to hear? Yep. I just did that the other day. That’s someone reaching out and like had sent me a long thing. And I read it and I said honestly, I and I said so what do you think the problems are that you’ll have to overcome? And they listed a whole bunch of other things and none of which were in the top three of what I saw being problematic was actually a marketplace issue. I said I think you’re grossly underestimate building the marketplace is easy, getting people to actually get in it and then do transactions in it as a completely different thing
Matt Watson 39:57
I always give the example of a, like, creating a debt a dating website, right? It’s like, you can’t create a dating website without a whole lot of guys and girls in it and a dating website with nothing but dudes, and it’s not gonna go anywhere.
Matt DeCoursey 40:09
And last, and last, it’s for just dudes
Matt Watson 40:12
Unless it’s just for dudes, but it’s so hard to create marketplaces. Man, that’s, that’s a hard thing.
Matt DeCoursey 40:17
And then that’s, and that’s because remember, you gotta have buyers and sellers, but you have to have enough of them. Yes, it’s not just about having one or the other. So you got and you got to get them in there. In a way, it’s just really, really challenging because if you get one and not the other, then it’s also kind of futile, like, so anyway. Alright, so I got I’m gonna on the way out. And once again, today’s episode, Startup Hustle is brought to you by Full Scale and FullScale.io is where you can find us. I want to also encourage all of you to join our Facebook chat, Startup, Hustle, chat on Facebook, just go to Facebook, type in Startup Hustle. Also, go check out our YouTube channel, we got a lot of great stuff. There’s a really cool video that we recorded over the series of almost six months with Matt Watson that walked through the whole process of his recent company being acquired. And there’s a lot of cool stuff and, but it’s all free. So I think you’ll I think you’ll really, I think you’ll really enjoy it. That said that I got a list of things that I don’t want to get out. I don’t want to get out of this episode without mentioning. And there’s a couple things to avoid when you develop an MVP. So misinformation and miscommunication, then either slow things down or just pushing in the wrong direction. Setting general parameters, that’s what I said, be specific about what you want, be good, be good at one thing, before you try to be good at three be like be great at one thing before you try. Because otherwise you’re gonna end up being like, okay, four things and that just doesn’t get it done. You know, and then, you know, some of the things this is where like Full Scale and other companies that specialize in this stuff and have experience like under you gotta have an understanding of like the software development lifecycle. Matt, does software ever get done on time?
Matt Watson 42:00
No, it always takes twice as long as you think if you’re lucky. Just wait. If you if you can deliver software, exactly on time on schedule, please email me. You’re hired.
Matt DeCoursey 42:17
Yeah, true. See, it’s funny. Speaking of communication this morning, Full Scale was listed as one of the fastest growing companies in our hometown of Kansas City. So my shits blowing up, I’ve I keep getting text messages. So never thought that would be such an amazing lead gen tool. The last thing though, don’t miss manage your resources. It’s really easy, like and mismanagement of resources is, is can come in so many different ways you can be hiring the wrong people. Look for people that know what they’re doing. You don’t you don’t don’t take too you can roll the dice on some things. But like when it looks, Matt, do you think great companies like elite amazing companies? Are they? Are they founded? And do they have foundations that are just strictly based on like average or shitty people?
Matt Watson 43:10
I mean, no, but once you become the big company, that seems to be the norm.
Matt DeCoursey 43:16
Well, but that’s, that’s not the
Matt Watson 43:18
best. The best ones are just a little. They must be like 2% above average, probably.
Matt DeCoursey 43:24
Yeah, but here’s the thing if you’re a two person company, and one and one of you is fucking terrible, 50% of your companies.
Matt Watson 43:31
No, I mean, big companies, though. Like, once they become big companies, is what I mean, like no one, they start out, they’ve got to be above average, right? But then every company I owned and sold, eventually they become become average over time. That skill level goes down to average. It’s just the way it works.
Matt DeCoursey 43:49
Yeah. But they’re, they’re average in a massive way. I mean, yeah. So I mean, you get it though. But like, try to find people that know what they’re doing and levels of expertise, like, you know, and I think one of the big mistakes that people make is, especially with software’s they go to try to find the like software talent they can get, and it ends up just not coming out very good, or it’s Slow as hell or it just ends up having to be rebuilt. I’m not saying that you have to have like, the world’s top developer, but you’re gonna your life is gonna feel a lot better on the way to push that MVP out. If you have people around, you know that know what you’re doing while you’re figuring out all the things you need to figure out next.
Matt Watson 44:34
I also don’t want the cheapest heart surgeon or an average one.
Matt DeCoursey 44:39
It’s the point it’s the point. So Should I cancel my haircut this afternoon with the budget haircut place?
Matt Watson 44:46
Oh, I’m gonna get a cheap ass haircut this weekend. Oh, yeah. Leg grows back.
Matt DeCoursey 44:51
You’d like you’d like buzz your hair. The problem I have is, you know, my hair is just thinner. And so I feel old doesn’t deserve I feel like I know but I feel like I should get a half price haircut because there’s just less
Matt Watson 45:03
hair. You just wear a hat and cover that shit up anyway, so I just
Matt DeCoursey 45:07
I’m wearing a hat. Honestly right now, Matt because I was just too lazy to wake up and take a shower and shave and like I’m I was I had quarantine hair and beard long before quarantine hair. And
Matt Watson 45:20
you know, I figured it out or the reg. I have the MVP of haircuts. I just buzz it all along. It’s like the MVP.
Matt DeCoursey 45:30
Okay. All right, that you probably overpay for that to let your kids do and it’s Oh, guard. I mean, you can’t mess that up. Actually, you can sit down. Well, yeah, I think we’ve covered a lot of good stuff. For those of you that are interested, there’s a look through the feed of the show. There’s a ton of this kind of topic and subjects were coming up on our 700th episode. So you know, we’re gonna have our two million download episode soon.
Matt Watson 45:57
That’s crazy. Who are you people?
Matt DeCoursey 46:00
And thank you at the same time.
Matt Watson 46:01
Yeah, thank you.
Matt DeCoursey 46:02
I need to go back. I need to go back and check and see if we finally got that listener in the Isle of Man, which was one of the like, isn’t that crazy. 2 million, million.
Matt Watson 46:12
Matt DeCoursey 46:13
Two million. And thanks. I mean, we should just say thanks. It’s there’s an infinite number of things that you can do with your time. So anytime you spend paying attention to what we’re saying or doing, very humbling, and thank you. I’ll see you next time Matt.
Matt Watson 46:28