Concept projects can help startup software companies uncover clues to more distant futures. Once you have the idea and decide on what is possible, it’s time to pull out the camera and start filming – not the whole movie, because that would be expensive and you don’t know the complete story yet. Instead, start with just a movie trailer.

You’ve seen hundreds of trailers. Everybody loves them. Little one-to-two minute teasers. It’s a great way to capture the essence, the core of the emotional experience that you are seeking in your software product. The goal is a visual prototype.

Try writing the print advertisement as you are developing your product. This forces you to crystallize your unique selling proposition. The movie trailer helps you focus your team in a way no design or marketing plan can ever manage to. The other advantage to making the trailer before making the real thing is that if you can’t make a compelling trailer, may be it’s better to back to the drawing board. Use the popular ‘T-shirt Test’: If you can’t make a T-shirt about it, may be you don’t have a compelling story yet.

MVP is a state of mind that is all about acting before you have all the answers, about taking chances, stumbling a bit, getting up and running. Consider Jeff Bezos’s story about how he launched internet’s first multi-billion dollar business literally on the run.

In 1994, he came across a startling statistic that the annual growth rate of web would ramp up to 2300%. To tap such an explosive growth, he hurriedly made a list of things he could sell online – from music to clothing before settling on books. Within weeks, he quit his Wall Street job, and had his things packed in a van without knowing where exactly he was going. He had Boulder, Portland, and Lake Tahoe in mind. Unable to decide, he instructed the moving van to simply head west. He called the driver next day and asked him to go to Seattle.

Bezos was doing exactly what innovators do: breaking a problem down into parts, taking on-the-fly decisions in parallel. How could a moving van begin its journey without knowing a state, let alone an address? The reasonable thing to do would have been to first decide the destination. But Bezos gained a day of internet time by launching his ship before he had charted his New World. As his moving van traveled westward from New York, Bezos flew to Texas from where his wife drove the family to Seattle while he sat in the passenger seat carving out a business plan.

Think about it: nothing on paper, no fixed place to start his imagined company, yet he was already moving firmly towards his destiny. While on the way, he even took a detour through North California to interview potential vice presidents of development.

Once he started operations, the same principles continued to apply – get it up, get it out was the motto. Function preceded style and editorial content. Low on graphics and animation, the site loaded fast and excelled at the basics – making it easy to search and buy books.

Fact 2: When Jeff Bezos started operations at Amazon.com, ‘get it up and get it out’ was the motto. Function preceded style and editorial content. Low on graphics and animation, the site loaded fast and excelled at the basics – making it easy to search and buy books.

What can we learn about building software successfully, from the above seemingly straight-forward facts? Quite a few things actually.

A decade ago, many software startups would be in stealth mode for ages, building the perfect product, burning huge amounts of cash – without actually getting users involved. The “build it and they will come” mentality was all too prevalent.

Today, the concept of MVP or Minimum Viable Product is gaining importance. (MVP is not a very new concept – in fact, it’s a core tenet of modern product marketing) Many software companies have started to realize that building software without customer validation and feedback can be a complete waste of resources. Tech start-ups, especially, can really benefit from building ‘just enough’ features that (a) make the software functional (b) enable early adopters to sign-up and pay (c) help bring real feedback from the market.

Most ideas don’t play out the way they were envisioned. Very rarely can you get the right product out the first time you try. By scoping right, startups not only burn less cash but increase their chances of success by being able to take their products to actual customers, fail fast and continue to iterate quickly based on regular feedback.

NOTE to regular readers: We’ve been dormant for a while on the forum now – our apologies – but we’re back, along with a minor update to the forum and we hope to keep the momentum going! Come join the discussion!

Image credit: liftarn

The Panel discussion hosted by Aspire Systems on “Bootstrapping a Technology start-up” evoked a very good response from software startups across the globe and a few consultants/ecosystem partners as well. We had 3 eminent panelists participating (Prakash Narayan, co-founder and CTO of MiCello; Ted Finch, Owner and CEO of Chanimal and R S Ramkumar, Managing Director and founder of MangoDVM) and Bhoovarahan Thirumalai, Board member and co-founder of Aspire Systems, moderated the panel.

It was an interesting & lively session – we had four broad themes, around which each of the panelists shared their views.

Perfect Vs Quick and Dirty Product

The first theme was on the conundrum of getting a perfect product out Vs a quick and dirty product. One view was that if you’re an engineer, you want a perfect product but from a marketing perspective, you want to show something to your customers as soon as possible. As users are much more ready to give you feedback nowadays, you need to get your product to the market as soon as possible.

The importance of iterating early and iterating often was also stressed upon. Another good point brought up was the use of analytics – measuring how your customers are using your product, which part of your product they are using the most etc.

On the question of who is your first best customer – one of the panelists mentioned that if you are a startup, and if you have a customer, you should embrace that customer – whether it’s a marquee customer or someone (who may not be big) but believes in your product. The point was that when you do approach professional investors, they certainly want to know who believes in the product apart from you & it adds a lot of value to have a MoU with a company willing to use your product.

Another panelist was of the view that a customer who requests your product to be custom-built is your first best customer, as your product is paid for. While this product may not meet all the market needs, it could possibly meet 70% of the needs and can get you started.

Time, Budget and Scope

The question of where does one start when developing the product idea evoked different responses from each of the panelists. Prakash’s view was that it was a good thing to have some protection (read: patent) around your core idea and to use existing frameworks and tools to reduce the time-to-market. Making crucial decisions in terms of the trade-off between features and time/budget are also extremely important.

Read the full summary here or register to view the Recorded Version of the Panel Discussion

In software development, we have seen how the waterfall model is gradually drying up; how agile/xp/scrum has already made huge inroads; and now we are also witnessing how kanban is heralding the ‘lean’ software development. I infer that similar shifts are happening in market/customer development for software products.

A start-up that builds the software and waits for the customers to find the product will possibly remain an up-start. More often that not, start-ups fail from lack of customers, not from lack of product development methodologies. But the reality is that most companies spend more energy on building products instead of setting up a structured (and repeatable) process for customer development. It is in this context that Steve and Eric recommend a 4-step customer discovery, validation, creation and expansion process. More details are available in their blogs and so I am not going to elaborate more here. Suffice to say that within the context of this customer development model, software development needs to be executed. At least, both should happen in parallel.

PS: Doesn’t this sound like THE thing to do? Why should smart entrepreneurs need such reminders about such basics? My hunch is that entrepreneurs (romantically and rightfully) see an Apple in their companies. Ain’t a software that is good enough for them, good enough for the market???

Entrepreneurs who bootstrap typically go through trying times. Yet, bootstrapping your software business – being frugal and resource-constrained – has its own advantages. It can help you focus and prioritize, and get your product validated by customers before you consider other funding options.

However, bootstrapping comes with its own set of challenges that need to be understood and addressed early in the business cycle. Come join a Panel of experts, including Vijay Anand (Serial entrepreneur, Founder of Proto.in and Incubation manager at RTBI), Ted Finch (Hi-tech marketing expert & Owner of Chanimal.com) and Prakash Narayanan (Co-founder and CTO of MiCello, a startup in the mobile content delivery space) for a discussion on what is takes to bootstrap. Some of the themes to be discussed include:

• The importance of getting a working product out quickly
• Are customer insights a part of the product development process?
• Identifying when you need to bring in professional investors
• Engaging with external consultants for business planning, market development and sales from an early stage

Bhoovarahan Thirumalai, co-founder and Board member of Aspire Systems, will be moderating the discussion.

Since it is a telephonic panel discussion, all you need to do is call in. To ask questions, you can login to the live online meeting, your questions will be taken up for discussion (time-permitting) during the event.

Date: September 30th, 2009; Time: 11 AM ET/8 AM PT/8.30 PM IST

Entrepreneurs bootstrapping or planning to bootstrap your software venture, do join us for a thought-provoking session!

The Roundtable was a very well organized and involved session. Quite a few startups pitched their ideas in this session and Sramana shared her views on their ideas/pitches.

Sramana was basically looking at three different aspects for a product idea:

1) Is the idea any different compared to what is available in the market? What is the value proposition?

2) Is the product and business sustainable?

3) Who are the target customers?

Many of the startups asked one common question: Is the product/idea fundable?

Sramana referred to various chapters of her series of books, “Entrepreneur Journeys”, when responding to this question and giving several pointers to budding entrepreneurs. Here are some of the things that Sramana stressed on:

• Focus on monetization – how are you going to make money using your product? Consumer oriented products need to think about this a lot more. It is not easy to get consumers to pay for a service as they are spoilt with several free offers on the web. Conversion rate from Free to Premium users is generally low and one should be conscious of this conversion rate. If it is advertisement-supported business model, what is the viability in the long run?
• A B2B / SaaS model (with enterprise customers) could be a better business model as there will be paying customers.
• Work on your go-to-market strategy
• Understand the ecosystem on which you can build your business
• When you go for partnerships, having a win-win relationship is very important.
• Personalization is the biggest unleveraged opportunity today
• Identify the risks of the business early on
• It is very important to do Total Available Market Analysis. Don’t go by gut feeling. Get real numbers. Do your homework.
• Even the name of the company is important: try to choose the right name. Make sure that it is easy to pronounce and write.

I would recommend entrepreneurs-in-the-making or those who have just started your technology ventures to visit http://www.sramanamitra.com and also register yourselves for one of her upcoming positioning roundtable. The experience will be worth it.