Groupon is one of the fastest-growing companies of all time. Its name comes from "group coupons," an ingenious idea that has spawned an entire industry of social commerce imitators. However, it didn't start out successful. When customers took Groupon up on its first deal, a whopping twenty people bought two-for-one pizza in a restaurant on the first floor of the company's Chicago offices-hardly a world-changing event. In fact, Groupon wasn't originally meant to be about commerce at all. The founder, Andrew Mason, intended his company to become a "collective activism platform" called The Point. Its goal was to bring people together to solve problems they couldn't solve on their own, such as fund-raising for a cause or boycotting a certain retailer. The Point's early results were disappointing, however, and at the end of 2008 the founders decided to try something new.
Although they still had grand ambitions, they were determined to keep the new product simple. They built a minimum viable product." Does this sound like a billion-dollar company to you? Mason tells the story: "We took a Word Press Blog and we skinned it to say Groupon and then every day we would do a new post. It was totally ghetto. We would sell T-shirts on the first version of Groupon. We'd say in the write-up, "This T-shirt will come in the colour red, size large. If you want a different colour or size, e-mail that to us." We didn't have a form to add that stuff. It was just so cobbled together. It was enough to prove the concept and show that it was. something that people really liked. The actual coupon generation that we were doing was all FileMaker. We would run a script that would e-mail the coupon PDF to people. It got to the point where we'd sell 500 sushi coupons in a day, and we'd send 500 PDFs to people with Apple Mail at the same time. Really until July of the first year it was just a scrambling to grab the tiger by the tail. It was trying to catch up and reasonably piece together a product."
Handmade PDFs, a pizza coupon, and a simple blog were enough to launch Groupon into record breaking success; it is on pace to become the fastest company in history to achieve $ 1 billion in sales.
It is revolutionizing the way local businesses find new customers, offering special deals to consumers in more than 375 cities worldwide. A minimum viable product (MVP) helps entrepreneurs start the process of learning as quickly as possible." It is not necessarily the smallest product imaginable, though; it is simply the fastest way to get through the Build-Measure-Learn feedback loop with the minimum amount of effort. Contrary to traditional product development, which usually involves a long, thoughtful incubation period and strives for product perfection, the goal of the MVP is to begin the process of learning, not end it.
Unlike a prototype or concept test, an MVP is designed not just to answer product design or technical questions. Its goal is to test fundamental business hypotheses. Early adopters use their imagination to fill in what a product is missing. They prefer that state of affairs, because what they care about above all is being the first to use or adopt a new product or technology. In consumer products, it's often the thrill of being the first one on the block to show off a new basketball shoe, music player, or cool phone. In enterprise products, it's often about : gaining a competitive advantage by taking a risk with something new that competitors don't have yet. Early adopters are suspicious of something that is too polished if it's ready for everyone to adopt, how much advantage cart one get by being early? As a result, additional features or polish Beyond what early adopters demand is a form of wasted resources and time. This is a hard truth for many entrepreneurs to accept. After all, the vision entrepreneurs keep in their heads is of a high-quality mainstream product that will change the world, not one used by a small niche of people who are willing to give it a shot before it's ready. That world-changing product is polished, slick, and ready for prime time.
It wins awards at trade shows and, most of all, is something you can proudly show Mom and Dad. An early, buggy, incomplete product feels like an unacceptable compromise. How many of us were raised with the expectation that we would put our best work forward? As one manager put it to me recently, "I know for me, the MVP feels a little dangerous-in a good way-since I have always been such a perfectionist." Minimum viable products range in complexity from extremely simple smoke tests (little more than an advertisement) to actual early prototypes complete with problems and missing features. Deciding exactly how complex an MVP needs to be cannot be done formulaically. It requires judgment. Luckily, this judgment is not difficult to develop; most entrepreneurs and product development people dramatically over estimate how many features are needed in an MVP. When in doubt simplify. For example, consider a service sold with a one-month free trial.
Before a customer can use the service, he or she has to sign up for the trial. One obvious assumption, then, of the business model is that customers will sign up for a free trial once they have a certain amount of information about the service. A critical question to consider is whether customers will in fact signup for the free trial given a certain number of promised features (the value hypothesis). Somewhere in the business model, probably buried in a single cell in a spreadsheet, it specifies the "percentage of customers who see the free trial offer who then sign up." Maybe in our projections we say that this number should be 10 percent. If you think about it, this is a leap-of-faith question. It really should be represented in giant letters in a bold red font: WE ASSUME 10 PERCENT OF CUSTOMERS WILL SIGN UP.
Most entrepreneurs approach a question like this by building the product and then checking to see how customers react to it. I consider this to be exactly backward because it can lead to a lot of waste. First, if it turns out that we're building something nobody wants, the whole exercise will be an avoidable expense of time and money. If customers won't sign up for the free trial, they'll never get to experience the amazing features that await them. Even if they do sign up, there are many other opportunities for waste. For example, how many features do we really need to include to appeal to early adopters? Every extra feature is a form of waste, and if we delay the test for these extra features, it comes with a tremendous potential cost in terms of learning and cycle time. The lesson of the MVP is that any additional work beyond what was required to start learning is waste, no matter how important it might have seemed at the time.
1. What is the central idea of the passage?
- Entrepreneurs should strive to make complete polished products ready for everyone to adopt
- Entrepreneurs should start with a simple idea or product to avoid wastage, learn from user experience and build on it
- Entrepreneurs should concentrate on saving cost and not spend time and energy oh quality
- Entrepreneurs should make world changing products that users want and which have many features
2. According to the Author, what do early adopters want?
- Early adopters want products that are readily available at low cost and high visibility
- Early adopters want high quality, polished products that are ready to use
- Early adopters want products with free trials with certain number of promised features
- Early adopters want products that are new, incomplete and offer competitive advantage
3. What does the author seek to imply by quoting "I know for me, the MVP feels a little dangerous in a good way-since I have always been such a perfectionist."?
- It implies more value for people as the entrepreneur works towards perfecting the quality of products which reduces the danger for the consumer
- It implies that there is a risk associated with the product which enables entrepreneurs to achieve perfection in the product
- It implies that the incomplete nature is associated with a certain amount of risk drawing entrepreneurs out of their comfort zone
- It implies that if entrepreneurs make products that are less than perfect it is dangerous for the consumer
4. What is the function of MVP?
- To enable entrepreneurs to reach out to as many consumers as possible in the fastest possible time with their product
- To enable entrepreneurs to continuously improve their product in the fastest time with least amount of time and cost
- To enable entrepreneurs to develop products that are of high quality and have many features
- To enable entrepreneurs to create world changing products that can win awards in trade shows
1. Refer to the last paragraph of the given passage.
2. Refer to the first few lines of the first para of the passage.
3. Refer to the lines ‘how many of us……formulaically.’
4. Refer to the last few lines of the last para of the passage.