MVP is a crucial concept that should be understood by every entrepreneur. What is it? What are the benefits of implementing it in your company?
Recently, Nopio had an anniversary. It’s been two years since I parted ways with my former employer and fully embarked on my journey as an entrepreneur. That anniversary got me thinking about all the questions I considered when I was starting a business, like what I wanted it to look like, how I wanted it to function and, most importantly, why I wanted to start my own business in the first place.
My previous workplace was a very well established web consulting company that brought me in when I was still a student. At the time I wasn’t even sure I wanted to work in web development for an extended period, but I quickly got hooked. I learned a lot in eight years with them, but I also saw a lot of changes. The company went from a disorganized team of 10 students, to a well-established team of 35 seasoned web developers. As the company grew, despite being involved in management, I saw quite a few things that I’d handle differently if I wasn’t constrained by the company’s existing structure.
The Original Plan
When I had these thoughts, did I go to my boss and immediately give my notice? Well, no. If you have the idea that a decision to start a business should be made at the moment you’re most motivated – after reading a success story or listening to an inspiring TED talk – think again. I think the best approach is to be deliberate and to do some planning first. For me, the process ended up taking about a year, but I had actually planned it to take up to two years. I had in mind a gradual transition, done according to the following plan:
- Save a meaningful amount of money from each paycheck to serve as founding capital.
- Build up my network of contacts. I primarily used LinkedIn for this purpose.
- Start working on side projects with new clients outside of my current employer. I thought this would be a good way to create customers for my future business.
- Set up my new company’s identity, website and branding.
- Discuss the plan with my current boss and come up with a transition strategy.
- Ideally, I wanted to keep my existing position until I couldn’t handle both pipelines of work.
Having never started a business before, this was my plan. In hindsight, I can now see some significant flaws. So what worked and what didn’t?
Surprisingly, saving the founding capital was the easy part for me. Fortunately, my employer had a very generous profit-sharing plan, so this was not as problematic for me as it may be for some people. Another thing that went well was my talk with my then-boss. He understood some of my frustrations, and did not take offense at my voicing them. Depending on your situation, of course, having such a conversation could be risky.
Another successful part of my plan was that it didn’t include renting an office, hiring staff or otherwise scaling up until I had the work to support those moves.
Everything else on my list I would have to characterize as a failure, some big and some small. In addition, there are ways that I failed that weren’t even on my list. There were some important things that I didn’t even consider. Here are my biggest failures:
Developing leads. Our lead generation strategy was to use the network of people that I had worked with in the past, but who were no longer clients of my previous employer. For some bizarre reason, I assumed that reaching out to 20 or 30 people would generate enough leads to keep us going. They were seemingly good leads: people with established positions who really liked working with me in the past. But that wasn’t enough! A big problem was that many of them were not decision makers in their companies. They had some influence on vendor decisions, but this often wasn’t enough to sway their companies to select a newly established, offshore vendor.
While I was working to sell these existing leads, I ignored the work of developing new leads for my sales pipeline. What’s more, I hadn’t even considered how to advertise my services. Two years later, we’re still trying to fix this problem. If you’re serious about starting a business, enhance your contacts list ASAP, and have an advertising plan.
Side projects. My plan was to develop a new pipeline of work while I was still at my former employer by taking on work on the side. But when you’re working eight to 10 hours a day in your regular job, it’s close to impossible to commit yourself to a side project. Even if you find the time, it’s hard to find clients who are willing to trust a single person from another continent to handle their important work. This is hard, and even harder if you ignore the networking part. I’m not exactly sure how I’d handle it today. Time is a limited resource, and you can’t function properly on little sleep for a long period of time. I would love to hear some thoughts about this in the comments.
Branding the company. It seems easy set up a webpage and a basic company identity. And it’s true that it’s not that hard. But since it seems like an easy challenge you may be tempted to keep it on the back burner. Don’t. It takes a lot of time to design a site, build it, create content, and test it. I kept putting off this important work, and it came back to bite me later.
Taking the leap. It turns out my dream of a seamless transition did not come to pass. I wasn’t able to remain employed with my former company until I was fully ready to launch my new venture. I’m calling this a failure since I did not follow my plan. Despite that, however, I think it was for the best in the end. Sometimes I think that if I hadn’t been fired as I was for being too vocal in my criticisms of my former employer, I would still be planning on starting a business, instead of actually running it.
The Revised Plan
Today, after considering all my failures, I’d formulate a different plan of action:
- Limit your monthly expenses as much as possible without introducing frustration.
- Set aside part of every paycheck until you have cash to cover at least six months of expenses for the new business, ideally 12 months.
- Set up your company identity, website and branding right away. Without it, your initial marketing efforts won’t be received well.
- Start expanding your network and begin advertising as soon as possible. Keep in mind that marketing is an ongoing monthly expense.
- Discuss your plan with your current boss and come up with a transition strategy.
- Don’t plan on keeping your job. As soon as you have your initial capital and everything else above in motion, go for it.
- Ask your previous employer if they have projects that they want to get off their hands because they are too small, or otherwise don’t fit with their current strategy.
That last point is an important one. It’s one of the happy surprises that enabled my new company to get a good start. When a company grows and changes, so do its priorities. In the case of my ex-employer, the profile of their “ideal customer” changed and they were happy to get rid of some smaller clients that weren’t bringing in a lot of work. They were pleased to be able to offer those clients transition to a trusted vendor whom they knew would treat them well.
Please let me know what you think in the comments or tweet us @nopiocom.