RSS

Category Archives: strategies

The Enterprise Minimum Viable Product: Focus on Viable Instead of Minimum

The minimum viable product (MVP) is one of the great concepts pioneered by the Lean Startup methodology. Conceptually, the MVP includes only the basic set of features that make a product production ready and nothing more. Obviously, the MVP concept has become one of the essential mechanisms to ship software efficiently and quickly incorporate feedback from real customers. However, while the MVP mechanism has proven to be an incredibly effective vehicle in the consumer market, there are some major challenges on develop solid MVPs in the enterprise world.

The whole MVP principle is based on shipping the essential feature set to make the product usable, get it in front of customer, study their behavior and incorporate their feedback into subsequent versions of the product. AS you might imagine, this process is not that simple in the enterprise software world in which the complexities of companies can complicate the dynamics between an enterprise software startup and its potential customers.

Having struggled with the characteristics of the right enterprise software MVPs for almost a couple of years now, I can point to a few challenges that most enterprise software startups will encountered when trying to get customers to adopt MVP-type products.

The User is Not the Buyer

One of the reasons that make the MVP concept works so well in the consumer market is because the user of the software is typically the ultimate buyer. Because of this reason, user feedback will directly make the MVP more appealing to potential buyers. This story is quite different in the enterprise world on which the people trying the MVP are rarely the ones making the ultimate purchase decision. In that sense, enterprise software startups need to be able to carefully evaluate the feedback received from an MVP, filtering the noise from the features that will make the product more relevant to potential customers.

Time Commitment

Getting enterprises to commit time and resources to evaluate an MVP-type product can be a really challenging endeavor. Differently from the consumer market, potential buyers in the enterprise are constantly bombarded with different assignments that will distract their attention from your valuable product.

Overfeature Culture

For decades, enterprise software has evolved in the middle of a culture that value the number of features over the simplicity and usefulness of a product. By presenting an MVP version of your product to enterprises, you might run onto a wall of prejudices that tend to associate the number of features in a product with its robustness and enterprise readiness.

Burning Bridges

Given the complexities of enterprise software sales cycles, startups need to be very careful when/how to position an MVP product to customers. If not explained correctly, the MVP might cause enterprise to be disappointed and not consider adopting your software just because they misjudged the purpose of the product at that stage.

In my opinion, there are some fundamental differences between the viability of the MVP approach in the enterprise and consumer markets. Despite the validity of the approach, I think enterprise MVPs can’t be too minimum and must be very viable ;)

 

Tags: , , , , ,

Enterprise Software Lessons: Avoid the Early Adopters Sirens Songs

In enterprise software, customer acquisition is the main factor that differentiates winners from losers. Understanding the process of winning customers, the required time, typical sales cycle, parties involved, etc are essential to successfully implement the correct growth strategies in an enterprise software startup. In the early days, enterprise software startups need to do everything at their disposal to win customers and increase adoption of their products.

While the first customers of any enterprise software startup are always the most exciting ones, their behavior can be really misguiding in terms of predicting long term customer acquisition strategies. I like to refer to this problem as the “early adopter’s siren songs”.

In Greek mythology, were dangerous and devious creatures, who lured nearby sailors using enchanting and irresistible songs that deviates them from their normal course. Using this analogy, in an enterprise software startup, you can think of early adopter customers as a bit of a siren song that can deviate the product from its normal trajectory.

Early customers are a great thing to have as an enterprise software startup. These companies are willing to take a chance on your new product and invest in your success. However, early adopters are not a direct representation of your target customer population and, consequently, of your ultimate business models. From a customer profile standpoint, early adopters tend to be more forward thinking, risk taking and innovation hunger than most companies. In that sense, your early adopter customers can send the wrong signals in terms of the customer acquisition models and metrics of your enterprise software product.

As an enterprise software startup CEO, you have to fight very hard to get early adopter customer but you have to drive even harder to get passed the early adoption technology inflection point. Until you get passed that “inflection point” you won’t be able to get a clear picture of the customer acquisition models that work for your enterprise software product. Early adopters are a great sign of the initial traction of a specific enterprise software product as well as the viability of a specific idea but can rarely be considered an indicator of long terms business and execution models. Establishing customer acquisition strategies and projection based on early adopter customer are not only unreal but highly misguided representation of the real adoption and long term business models in an enterprise software startup.

From an enterprise software startup perspective, the transition from early adopters to mainstream customers is one of the hardest thing to accomplish. However, until you get to that point, any metrics , long term projections or business models won’t be based on real facts but on dangerous songs of sirens.

 

Tags: , , ,

 
Follow

Get every new post delivered to your Inbox.

Join 55 other followers