Caution: Great MVPs may block investors’ view
by Levi B. Belnap
For an entrepreneur, a great MVP teaches you exactly what you need to know to move to the next step with as little wasted time and resources as possible. For an investor, a great MVP looks like an early alpha product that may get you labeled as something you don’t want to be. I learned this lesson the hard way.
My co-founders and I are currently in the early stages of raising a seed round for our startup Peoplematics. We have built great MVPs that have led to our current alpha product, which to us is just another MVP getting us one step closer to helping employees find and securely share information from across their personal cloud. However, as we met with investors some saw us as an email plugin because our MVP helps users find and share information from their email.
We are not an email company. We are building a data platform to effectively serve as your control center for all of your cloud accounts. Email just happens to be the one cloud account where we all spend lots of time and create lots of content so it was the perfect place for our MVP. We say this to investors, but not all of them hear it.
Like the warning on a car’s mirror, “Caution: Objects in mirror are closer than they appear,” your MVP may be all the investor can see without understanding how close or far away it is from your end product. Great MVPs create an interesting paradox when dealing with investors. A great MVP gives you credibility by showing you can take an idea and actually do something with it. But, if your MVP is too good you may have a hard time selling the bigger vision.
So what lessons have I learned from this experience? First, do not build product for investors. Even if we could go back in time, we would still build an MVP starting with email because it taught us what we needed to know. However, we would change, and actually have changed, the way we position ourselves and our current alpha product to investors.
At the end of the day, investors want to see momentum. Nothing creates momentum better than building a product that customers really need. Use MVPs to get to a product customers really need as fast as you possibly can. Then show investors the customers who need your product and the pain you are solving for them, after they are sold you can show them your MVP...but not before!
This is my most recent MVP learning, what surprising experiences have you had building and using MVPs with customers and investors?
For an entrepreneur, a great MVP teaches you exactly what you need to know to move to the next step with as little wasted time and resources as possible. For an investor, a great MVP looks like an early alpha product that may get you labeled as something you don’t want to be. I learned this lesson the hard way.
My co-founders and I are currently in the early stages of raising a seed round for our startup Peoplematics. We have built great MVPs that have led to our current alpha product, which to us is just another MVP getting us one step closer to helping employees find and securely share information from across their personal cloud. However, as we met with investors some saw us as an email plugin because our MVP helps users find and share information from their email.
We are not an email company. We are building a data platform to effectively serve as your control center for all of your cloud accounts. Email just happens to be the one cloud account where we all spend lots of time and create lots of content so it was the perfect place for our MVP. We say this to investors, but not all of them hear it.
So what lessons have I learned from this experience? First, do not build product for investors. Even if we could go back in time, we would still build an MVP starting with email because it taught us what we needed to know. However, we would change, and actually have changed, the way we position ourselves and our current alpha product to investors.
At the end of the day, investors want to see momentum. Nothing creates momentum better than building a product that customers really need. Use MVPs to get to a product customers really need as fast as you possibly can. Then show investors the customers who need your product and the pain you are solving for them, after they are sold you can show them your MVP...but not before!
This is my most recent MVP learning, what surprising experiences have you had building and using MVPs with customers and investors?
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