I have been informally advising an entrepreneur who I have a great deal of respect for. He's a second time founder, one who had a great exit in the 'enterprise' world, and is now building an innovative mobile application. Surprisingly, I found us having a debate over his intent to create a minimally viable product for his first release. He's a really smart guy, and his intent is to use the initial few thousand users as live market research. He hopes the 'good enough' feature-set will help prioritize future releases and validate the market potential. I hope he's right. Yet, I was troubled by the approach and thought I would share some background.
The combination of costs steadily declining for designing and launching products, coupled with a social embrace of entrepreneurs has led to a bevvy of start-ups creating things which are only limited by your imagination. Despite declining development costs, many, if not most of these thousands of new ventures are capital challenged. So much so that it's now common to hear an entrepreneur explain that his team is building a 'minimally viable product' with the objective of gaining enough market traction (happy users) to then raise subsequent expansion capital. Heads seem to nod that this is a prudent course of action. I'm not one of them.
Limited capital, though painful, can be harnessed to be a great asset for young companies as it forces the team to make the hard decisions about what is 'really critical' vs 'only important'. It's really essential to do the really critical and to do it well. Often the 'only important' turns out to be not so important after all. My concern with the MVP state of mind is that companies are creating cultures, and producing products, where mediocre user experiences are acceptable as a result of hard product decisions not being made. It's a responsibility cop-out to produce bad product, and it's irresponsible to the stakeholders to think that the market opportunity is so great that bad/mediocre product will instantly gain sufficient momentum to attract capital to support the next phase of growth.
If you don't have enough capital to do the job, or are not in a position to use your team's 'sweat' as a substitute for money, then it just might not be the right time to start this company.