Minimum Viable Product: Validate Your Startup Idea for Less than $1,000

1. Introduction: Hi, my name is Michael, and I'm the CEO and co-founder of Skillshare. Today, we're going to learn how to launch your startup idea for less than $1,000. Most people think MVP stands for most valuable player, which usually goes to LeBron James, but in this class, we'll go over what it means in the business world, which is minimal viable product. Just to give you an idea, the short definition of that is what's the least amount of work that you could do for the lowest cost to find out if your idea is good or not? No matter what your idea is, whether it's starting a restaurant, or building a tech startup, or just starting a company, or building anything, all students should be able to walk out this class with an MVP, and actual steps, and really finding out in the next two to four weeks, whether their idea will work, or whether it will fail. This class holds a very special place in my heart because we launched Skillshare for a couple of thousand dollars, and two years later, here we are. 2. Skillshare as MVP: Welcome to the class on how to launch your startup idea for less than a $1,000. My name is Michael and I'm the CEO and co-founder of Skillshare. To start, I just want to share a really quick quote that really will apply to the entire class and to the entire skill that you're about to learn. Inspired Steve Blank, that starts with the biggest cost of startup is time and not money. Most startups fail not because the technology doesn't work but because they're building and creating the wrong product for the wrong market. I would attribute most failures, most ideas not working is because they're building a product or a service or an idea that no one really wants, no one really cares about. So, what we're going to do in this class is come up with a very simple framework and methodology on how you can de-risk your ideas so that things like that won't happen. Next, I just want to share two different approaches how you could build a business. The first is what I call the waterfall approach. To give you some background on myself is, I used to work at a startup called Behance and we launched a website called Action Method. That actually took nine months to build and launch. What we noticed when we launched it, is that we could have actually launched in the first month because the only feature that anyone ever used was sending the action step to another person. We spent the remaining seven months building all these other features that barely any user ended up using. The reason I'm sharing that story is because that's one approach of how you can build your business or your idea and launch it to the world. You could spend years and years and years developing it and realizing that people will only use it for a certain portion. Based on my experience at Behance on how we build the product there, I decided to not follow that same path at Skillshare. So, what we did is we essentially launched MVP. It stands for a minimal viable product is launching with a minimal set of features. So, if you're building a website, it's figuring out what's the most minimal thing you could do, if you're opening up a restaurant, it doesn't mean that you need to open up a full scale restaurant but rather where you can start. The way we actually launched Skillshare was really, really easy. So, I had a co-founder and we went back and forth about the idea. We would just kind of flesh it out and what it could be and what it looked like. Then, we started asking our friends, what do you think of Skillshare, what do you think of this idea? I think even at the time we didn't have a name for it. While we're thinking of this idea where anyone could teach a class to anyone else. So, after we got a bunch feedback and everything was really positive, we decided to change it, change it around, and the way we decided change it around was we would go back out to the same people we would ask them, why would this idea work, why does this idea suck? Just be brutally honest with us. Then the answers that those same people gave were completely different. We started hearing things like people can't teach, you need to go to school to be a teacher. Nobody wants to learn after they graduate. Schools are really boring. The list went on and on and on and on. The biggest problem we found that was consistent with everyone that we talked to was that people couldn't teach, like it's really hard to teach. I've had a lot of bad teachers. You know, it's a really terrible experience if the teacher is not engaged, if they don't really know the material. A lot of the teachers I had really don't know what they're talking about. So, we wrote that down as the biggest problem and then what we decided to do after that, we started asking ourselves how can we test this idea, how do we know if this is going to work? We decided to create a game and the game had levels and for us each level had a multiple of 10. So, the first part of the game was to get one teacher and 10 students and then the second level of the game was to get 10 teachers and 100 students, and we kept going on and on. Then we created simple rules and we said, "We're going to dedicate three months to this game to see if it's going to work and $5,000." I think we could actually launch it for a thousand dollars or less. We said, "How do we derisk this problem around teaching?" So, I told Malcolm that I would teach the first class. So, I taught the first class on Poker, and how to play Poker. The first Skillshare class was on Event Brite. So, rather than building this intricate ticketing system, we didn't really care about the technology because we really want to know what people were going to have a great learning experience. So, if you go to skillshare1.eventbrite.com you could still see the first Skillshare class that ever launched, and we just linked to it on the website. That was the first Skillshare class. We put up the website and I emailed all my friends and they emailed their friends and I think we got about six students and they all had a great experience. I worked with every single teacher, every single student that bought a ticket to a class. We talked to them either before during and after to get feedback on it, and what that ended up doing is you know revealing other holes and other problems and Malcom and I would kind of hit the drawing board and then we'll come out the other solutions to figure out how to solve those and the cycle just repeats over and over and over. I would say today, we're in tens of thousands of students, hundreds of thousands and we're just literally repeat the process all the way till today. 3. Keep Your Idea Concise: So, the first step in everything is really figure out how to communicate your idea. I think, one of the challenges is trying to figure out how do you take this idea in your head and trim it down to one sentence that everyone can understand. In the early days, we would have this lengthy explanation, we would talk about, ''Hey, did you like your college experience?'' Then, we talk about that. Then, we would say like ''Tell us about the best learning experience.'' Then we talk about that. Then, we would say, ''Hey, we have this idea.'' and this idea was all around teaching people. Thirty minutes later after explaining the idea, we realize that the people we talked to still have no idea what we're doing. So, that's when we started thinking about like how do we communicate our idea and make it really compact and simple? In the early days, we would say, ''Skillshare is a website where you can take classes from other people.'' We use so many different iterations and versions, but that was our one sentence, like really concise pitch, that we would always have something that juxtaposed or drew an analogy. So, we would say, ''Skillshare is a website, so you could take classes from other people in your city, It's kind of like meet up, but with education twists.'' Then people were ''Oh, I get it.'' So, it's kind of like classes that you take in real life from other people in your city. I'm like,'' Yeah, yeah.'' Or we'll say something like, ''Skillshare is a website you can take classes from other people, it's kind of like Eventbrite, but for education.'' We just keep using those over and over and over again. The way we think about is it's kind of an x for y. So, we always have one sentence that really got down to the root of what the idea was and we would say it was x for y. The reason this is really really important because what I find is, the longer it takes for you to explain the idea, the more questions people have. The more questions people have, the longer it takes for you explain the idea. You don't really get the feedback that you need. The other approach we take is we always say, "Skillshare is a website you can take classes. It's like Eventbrite, but for learning." Then, they'll say something like, ''Oh cool. What type of classes?'' That's, when we'll kind of go deeper and say, ''Oh, you can take classes on how to cook, or how to program, or how to build a website, or how to design a T-shirt from this awesome designer.'' We could go and tailor our responses according to the questions they asked us. But, we would never, ever spend more than 15, 30 minutes explaining our idea because we really wanted to get feedback on our idea. So, try to trim it down to one sentence. Think of your x for y and definitely respond to people if they have questions. That's how you should communicate your idea. 4. The Importance of Customer Interviews: Before, we talked about communicating your idea in 10, 15 seconds, and then from there, you just kind of want to ask them, "Why won't my idea work?" You'll just get tons and tons of answers. What I notice from working with a lot of my students, the first thing they want to do is what I call rebuttals. It's like, "Well, I thought about that, and I thought I'm going to do this instead." What happens is you're really cutting off the other person from giving you really, really constructive feedback. The rule of thumb you should have is think of your idol creatively or professionally. Imagine if I was in a room with Jeff Bezos for five minutes, only have five minutes. Do you want Jeff Bezos to give you feedback in your idea for four minutes and 50 seconds? Or do you want him to spend a lot of time listening to you, and giving you feedback for 10 seconds? If we think of it like that, you really don't want to talk too much. You just want to ask him questions, listen, and write down what they're saying, and really allows you to eliminate a lot of risk and uncertainty. So, when you're doing these customer reviews, you don't want to spend too much time rebutting and talking. You want to ask a lot of questions. You want to listen, and that's how you actually learn. The other thing you want to think about when you're doing these customer reviews is to not fall into the Steve Jobs trap. So, I call this a Steve Job's trap because I think everyone falls in love with their idea, and there's nothing wrong with that. It's extremely awesomely passionate, but you don't want to fall into the Steve Jobs trap and basically be an asshole, and assume the other person doesn't know what they're talking about, or you're so visionary that they don't understand what you're talking about. When they're giving you feedback and then poking holes, and 10 to 15 people say the same thing, that's a major red flag in your idea that you should address it. Like I said in the story of how we launch Skillshare, when we started telling people about the idea we would say, we will always start off with, "Skillshare is a website where you can take classes." Blunt to the point. It's like Eventbrite but for learning or education. People are like, "Oh, I get it." Then I would always follow up with just a very basic questions like, "Why wouldn't this idea work? What are some holes you think about it?" I like to get right to the point. If you're not really don't want to get punched in the face like 10 to 15 times, you can always start off with, "Dude, what do you think this idea? Isn't awesome?" They're like, "Oh dude, I love that idea. I always want to take a class on painting, whatever." Go down the positive route, then start moving into, I wouldn't want to say the negative route, I would call it more of the feedback routes. They'll just come out with a lot of different answers. "I don't think your idea work because I don't think the market is that big," or "I don't think anyone really wants to buy that shoe," or if you're starting a restaurant, "I don't think people really want to eat that food or you're not really a good chef. I really didn't want to tell you this before but your food is not that good." You'll get so many different answers, and what you really want to do is just write them down. Find common themes, but one last thing I want to mention is a quick tip. As you're going through this process, you'll always hear the, "Well is that similar to what that company is doing?" Or, "Is that similar to what Johnny's building?" Or, "Is that similar to Facebook?" You'll just hear a lot of those. What I would say about that and quick tip is don't freak out because wherever you're thinking, it's already been built, and there are already 10 other people launching it right now, or thinking about it. One great advice they got for competition is you really never have to worry about it until you're like Facebook size, and you have to compete with MySpace. We're talking hundreds of millions of users, hundreds of millions dollars in revenue. That doesn't mean you shouldn't think about your competition or something is similar because you really want to think about, what makes your product or your idea different. But I wouldn't freak out about it, I wouldn't get too discouraged if someone tells you that your idea is so much another idea. So, just as a recap for how you do these interviews, start for the really short explanation of your idea. Maybe you can lead into it of being really positive, then you want to find out and ask them why their idea won't work and start finding common themes. A couple tips: Don't be an asshole. Don't think you're Steve Jobs. Spend more time listening and asking questions versus rebutting. Then, don't freak out if someone told you your ideas someone to someone else's idea because I'm a firm believer. Everything has been created. The only original things that exists are people, and teams, and companies, so don't freak out. 5. How to Build Your MVP: Now comes the fun part. After you figure out what your idea is, how to communicate it, you talk to a lot of users or customers, now you got to figure out, how do you actually build it? If you want to open up a restaurant, what most people would do is they'll say like, ''Cool, let me put together a business plan, it's going to be 50 pages long. I'm going to have to raise like five million dollars. I'm going have to go find a space." Five years later, the restaurant launches and then five days later they'll like, ''Oh my gosh, nobody likes this concept. I'm going to go out of business and I wasted five years of my life and five million dollars to launch this." Another approach you can do is follow this process, you can find out, ''Hey I want to launch a Cuban, Korean, Asian restaurant fusion.'' You want to talk to maybe 20 people that are huge foodies, they're your friends or you can just go and Yelp and message people that leave a lot of reviews. Take them out for lunch. You want to find out what the biggest problems are, so people will say like, "Korean and Cuban, Asian fusion food, I don't know if that's really that good. I don't think anyone wants to eat this type of food. Opening up a restaurant in New York City or San Francisco is really hard, and it goes on and on and on." What do you want to do is you start finding the common themes and let's say for the sake of this example we'll say, ''Nobody likes Latin, Asian fusion food. It just doesn't taste good, it's new. People have a hard time grasping concepts of these different cuisines." The next thing you do after that which is the fun part is coming off the list of hundreds and hundreds of solutions how you would solve that. Then from there, you could say like, ''What's the least amount of work that I can do in the shortest period of time that doesn't take a lot of money? '' So some ideas, I'm just kind of, these are just off the top of my head. You can say one, I'm going to on the menu. I'm going to go into my kitchen, I'm going to taste them, and taste them, and taste them. Let's say you've figured out three dishes that you think are amazing. Step two, you can say like, ''Well, I need people to try this out, and what I'm going to do is I'm going to say, if I get 10 people over to my apartment tonight, and say they really love this, that's a huge success, and that's level two for me." So Level one is finding the recipes. Level two would be other people telling me these recipes are good. Then afterwards, you just ask them, ''Did you like it, did you not? Just please be honest,'' and let's say everyone hated it like, "Ooh men." They could say like, I like this dish, but I don't like these other two dishes. Then we can go from there, you can say like, ''Let me go back to step one, find some new dishes and experiment.'' The next stage for you and the next level can be you know what, I'm going to go to rent out a restaurant or I'm going to rent out a vacant events space, or I'm going to go to a restaurant that's really dead on Monday and just see if I could rent the whole place out and invite 100 people or 50 people, whatever it is. So basically what you're doing is you're basically playing a game where you kind of go up the levels, as soon as you know that whatever the biggest problems are or the biggest risks were solved and the biggest risks were de-risked essentially. So before we spent five million dollars building a restaurant, you want to make sure that you get the dishes right and then you want to make sure 10 people like it, and you want to make sure 100 people like it. Then the next thing you know when you open up a restaurant, you know that the day you launch there's going to be a line down the street. That's the approach you want to take when you start building and defining your MVP is and asking the question, what's the least amount of work you could do in the shortest period of time? That really hits those big problems right in the butt. Always use something that exists. So you don't really want to build anything from scratch. So if you think about the restaurant example, you don't really want to build the restaurant, you could use a restaurant that already exists. You don't want to really build that event space, you could just use your apartment. Then for tech website thinking of the same thing, to say like, ''I don't want to build a ticking service, let me just use this news event pri, or I don't want to build XYZ, let me just use the other thing." Another great resource for all ideas is Kickstarter. So I think that's a great way to test your idea and see if people really like it or not, but what I would really recommend is for you to go through those steps before you even put your Kickstarter project up. What you really want to figure out is, what are the biggest problems and how can I solve those, and how can I do those in the fastest, the shortest, the cheapest, and one that's definitely not the riskiest? Hopefully, what you'll find out is one, your idea will working. You can go up those levels and two, if your idea doesn't work that's totally fine. You could throw that idea in the trash and move onto the next one, or the idea evolves into a better idea that might be completely different. The basic premise is execute execute execute as much as you can. Move up that ladder and next thing you know, you'd be the owner of a really successful business idea or startup. 6. Iterate and Test Your MVP: The last thing you guys have to do as you start building your MVP and launching your idea to the world, is you got to really figure out how do you test it, and how do you iterate, and how do you improve upon what you just launched. One thing and one tip that I want to give everyone, in the early days, it's totally okay to roll your sleeves up and do things that are unsustainable and unscalable, totally fine. To give you a quick story in the early days of Skillshare, I reached out to every single teacher one by one. I worked with them on each syllabus one by one, every single student, I went to every single class, I opened the door for them, I took attendance, I talked to every single user one by one. Because what I was really trying to understand at that stage was how does a class work? Do people really want to learn? Can an average person become a teacher? Will the average person that's not in school pull out their wallet and buy a ticket to a class? I taught the class, I invited 10 my friends and when we went up the next level and we said, ''Oh! Let's get 10 teachers. Now, we are still a lot to do that, we can still teach and reach out to every single teacher and work with them one by one. Then once we got to 100 and 1,000 and 10,000 teachers, we were like, ''Well, well you can't really do that anymore.'' So, the ways you move up those levels change. But in the early days, it's totally okay to do unscalable things that are unsustainable. So, I wouldn't worry too much about. What's really important is for you to define these levels. There stages, and the goals that you want to attach to each of them because that's how you know your idea will really work. So, I always encourage everyone to get their first user, their first customer, their first fan, or their first whatever. Then from there, just use a basic rule of thumb in terms of by 10s. So flag your first 10, then your first 100, then your first 1,000, then your first 10,000, and 100,000 and a 1,000,000 it goes on and on and on. Moving up the ladder you just repeat this process over and over again. Find out what the biggest problems are, come up with a bunch of solutions, launch those ideas really, really quickly, find out what works, what doesn't, iterate. What you'll notice that at every 10 solutions, nine of them won't work, and one of them will. But over time, each solution adds up into becoming 10 solutions that do work. That starts creating this machine, that starts working together, and that's how you start scaling. What we did to get our first 100 students and our first 1,000 is we did a couple of ideas around marketing. We threw a lot of events because we said, "If we could get 1,000 email addresses, we knew that people really loved our idea, and it would work." We also decided to write an article about our mission because we said, ''If people really like the idea and they really love our mission, this is really going to work.'' So we wrote a very controversial article that Good magazine published about, why college is overrated? That got us like two to three email addresses in itself. Then near the end of that three month period, we said, ''Why not launch a kickstarter project to fund a video about this mission of this article, we just wrote.'' So we needed up raising I think around $3,000 to create this video. Basically, what we did is we just kept coming up different solutions and different ideas and kept climbing up those ladders. Today, in order for us to get 10, 100, 1,000,000 students, it's completely different. Now, this is where a lot of our product comes into play. This is really like branding, and positioning, and running ads on Google and a bunch of other tactics come into play. But in the early days, you should only focus on getting your first user, your first 10, and then first 100. I want to wrap up this class and say, all of this really depends on you as a student taking initiative. You don't want to follow on that idea, idea syndrome or the idea, idea trap, where you're always thinking about ideas, and when it gets really hard when you start executing, you move on to another idea. For most of you unfortunately, your idea is not going to work. But the benefit is at least you know, at least you can move on to another idea that should work. For the few of you that find those gems at work, that's really, really amazing. It's an awesome experience like, and you could start moving up this ladder and moving up this ladder. So whether you want to build the next Facebook, whether you want to launch a new restaurant, whether you want to create a seven minute shot, it almost doesn't matter because your idea is your idea. No one else is going to tell you whether it's going to work or not unless you go on to execute. So, with that said, hopefully you've learned how to launch your idea for less than a $1,000 and hopefully, I'll see a lot of successful projects coming out of this class.