About two weeks ago I scrapped my original startup idea because it did not look like it could become a viable business. It also seemed too much for one person to do alone. The idea was to build a communication platform for a community of mathematicians.
Since then, I got the idea to build a service for music students which would take the pain out of the process of recording and finding music. After speaking to several fellow music students, it seemed like this idea had the legs to become a business, and so I began to pursue it further. In a couple of weeks, I launched my Minimum Viable Product (MVP), in the true Lean Startup spirit. Here is what I did.
The original idea for my service came out of personal frustration. I was preparing for a performance and was struggling to find a recording of a lesson I had taken 2 years ago. It was at this moment that I thought 'this whole process could be improved'. I searched online for solutions, but found none. I then started speaking with a few fellow students about what they did. It emerged that they used mostly ad-hoc solutions, and had spent some amount of time looking for ways to improve the process.
I then started speaking to more and more music students from different disciplines, and recording and organizing music was a pain point across the board. So I created a survey which could be emailed to hundreds of people through my musician friends. From the survey, it emerged that of those who did record, most felt that it was a pain, and many said they would pay for a solution to improve it.
So far so good, but surveys are notorious for being misleading: you may not necessarily do what you say when push comes to shove. I needed a better way to test the market.
My first MVP
So I built my Minimum Viable Product (MVP). It was a landing page which made it look like the product was ready. Check it out here. The point was to find out if I could get people to click on the 'Sign Up' button after seeing that there was a price attached to the service. This is not wasted effort since I was going to have to have an inviting landing page anyway. But with this approach, I could play with my marketing channels and value propositions without expending energy on a mis-directed backend.
This MVP took two weeks to do and it was a great test of my studies in user experience design and front end engineering. It also required me to consider the fixed costs of my product (for the servers, marketing, support, etc.), the marginal costs, and then decide on a gross profit margin which would make financial sense for me. I studied the pricing of comparable companies, and finally settled on a pricing scheme that looked viable given the information I had.
The first marketing channel I chose was Google Adwords. My second channel (if the first fails), will be facebook ads. If that fails, I will have to evaluate my options. I hope that 1% of the clicks from these channels will result in a request to signup. If this does not bear out, I will need to go back to the drawing board and think about different channels, different value propositions, different pricing schemes.. different something.
A hunt for a viable business model
I am now truly beginning to understand what it means to be 'searching for a business model'. Even building a simple landing page made me consider the value proposition, the customer segment, the channels to those customers, the revenue stream, the cost structure, and my partners (Amazon Web services, Google Adwords, Facebook Ads, etc.). I can experiment with all of these without writing a single line of code.
I think that this is the essence of being 'Lean' -- state the assumptions, and then figure out the most efficient way to test them. This includes defining quantitative metrics by which to determine whether a test succeeded or failed. Using the Lean principles, I could begin testing the highest risk components of my business model in two weeks, with minimal cost.
I think that this is pretty cool, and I am stoked about experimenting with all the components of my business model in a data-driven way.
What do you guys think? Any advice or comments on my journey so far?