Minimum Viable Product and Letters of Intent
I really liked this case study outlining new approaches to gleaning customer feedback, developing a software product that customers actually want, and trying to lock in customers that will actually pay for what you create.
The gist is:
- That they created screenshots (in photoshop) of their not-yet-existent application so they could walk through the functionality and workflow with potential customers.
- According to the feedback they gleaned through multiple meetings, they refined their screenshots.
- They didn’t start writing code until they had two signed Letters of Intent (a non-binding intent to purchase, with some stipulations), which were negotiated during the third meeting with potential customers.
The Letter of Intent is an attempt to weed out those that won’t ever purchase your product. But really, if you’re able to actually land 3 meetings with a prospective client that gives good feedback for your product, it’s a good day and the LOI might not be necessary.
One might not think so, but I imagine an LOI would (and should) be quite enticing to customers and not just the software developer. Especially so if the LOI provides the customer with free use of the app until some date, which is akin to a demo or a 30-day money-back guarantee. They’re very enticing.
Is there a case where a customer would invest the time to give feedback, only to balk at forking out real money? Maybe if they thought all along that they would be rewarded for their efforts with free use of the product. If this is the case, then the LOI didn’t do it’s job. The LOI should clue them in that what you want are paying customers. So if they manage to hold on to the hope of a freebie for that long, I smell miscommunication. Or maybe they’re just super generous and want to help you out … possible, but not likely. And really, I imagine feedback from this type of person might do you more harm than good. You should be soliciting them for feedback in order to create something that people can’t wait to pay you for. And I guess if you can’t find anyone to participate in this sort of feedback + LOI arrangement, then maybe you’re not solving any real problem.
“The LOI was also useful as we leveraged it by approaching the competitor of one of those who signed by simply letting them know that their competitor will be using our app. They returned our cold intro email within 8 mins.”
This is an interesting approach too, though I’m not entirely comfortable with this because it seems alarmist:
“Your competitor is going to have a leg-up on you, what are you going to do about it?!
Of course, if you phrase it differently, it might be more ethical. But I suspect you shouldn’t mention that a competitor is involved at all.
I see nothing wrong with telling the prospectives that the app is “in development” even though you haven’t written any code. I consider spending lots of time getting the whole user experience right to be equivalent to throwing together a prototype that’s nothing more than a demo of your app. Prototypes are meant to be scrapped and rewritten. I guess you could still argue that you should be writing real, production code from the start. So hey, if you enjoy backtracking and reworking things repeatedly as requirements change, go ahead.
Quoting the article:
“Right now, the app itself is pretty ugly, a bit buggy and slow — and doesn’t even do a lot. It is borderline embarrassing. Don’t get me wrong, it does the few necessary things. BUT it definitely does NOT have the super-duper-hyper-ultra-cool Web 2.0 spit and polish about it. Interestingly enough, our ratio of positive comments to negative comments from actual users is about 10 to 1.”
This speaks to the success that can be had from getting customer feedback early on and I assume it also says they implemented the “requirements” correctly.
Another quote:
“The LOI was designed to give us hard, non-bullshit-able feedback instantly. Too often people will affirm your idea so that you (or they) can save face, which BTW is a form of well-intentioned and socially acceptable deception. This is why, IMHO, friends, wives, and significant others are probably not good people to talk to about your idea. At the end of the day, no one knows if the idea is any good. The market will tell you.”
Unfortunately, nothing is 100% non-bullshit-able. But it seems you could get close to 100% with the tactics they used. Not just the LOI, but:
- Three meetings
- The showing of continuous progress/refinement
- Making customers feel like they have a say
- Making sure you’re building something that benefits them
- Making sure they’re aware that it will.
Are there any other missing pieces?
This is a question posed on Hacker News regarding the article:
“If I were one of your prospects, I would never sign a letter of intent based on drawings only. I’d make you come back later with something, anything I could play with … Come back when you have something real to show. Until then you’re no different from any other poser.”
This is no doubt something a programmer would be concerned about. But this seems irrational to me. A programmer should know the value of good up-front design, even if that’s not their preferred method of development. I wouldn’t hide the fact that you’re dealing with screenshots from this type of lead. But if they’re still turned off, place this person in your second-wave lead list, and contact them once they can be convinced of legitimacy.