In response to my recent article about how product managers can learn from the way Starbucks opens its stores while still under construction, several colleagues rightly pointed out that not all companies have the brand recognition and loyal customer base that Starbucks has when launching a new product or service. While I still think it’s true that the “coffee and cash register” approach that Dave Pickett summarized so well represents the “core revenue-generating loop” for a minimally viable product (MVP), basic functionality is not always enough to ensure success.
In addition to defining a well-constrained MVP that will enable you to get into the market and begin earning revenue, learning, and iterating to further improve the product, startups facing entrenched competition must fundamentally differentiate themselves rather than merely shipping a product with a subset of the competitors’ or alternatives’ features.
Now, bear with me as I stick to food & beverage analogies for a quick bowl of noodles…
I was born and raised in Japan, and I recently returned to visit friends and family there. Traveling from Tokyo to Matsumoto via Nagano, I had about 30 minutes between the bullet train from Tokyo and the express to Matsumoto, right around lunch time. As I stepped off the bullet train, the first thing that caught my eye was a small shop built on the train platform announcing “soba” (buckwheat noodles) on its blue curtains. Mountainous Nagano, where the Winter Olympics were held in 1998, is famous all over Japan for its soba, so I wasn’t about to pass up the opportunity.
An automated kiosk took my order for a 500-yen (less than USD 5.00) bowl of sansai or mountain vegetable soba, served cold in the mid-June heat. The kiosk issued a voucher, which I simply handed to the lone attendant inside the shop. She cooked up the fresh soba, chilled the noodles briefly in ice water, and then grabbed plastic containers full of mountain vegetables — such as fiddlehead fern shoots and other edible plants foraged from the nearby woodlands. Garnished with green onions, I had my meal within about three minutes and, standing at the counter, I’d slurped it down in another five, leaving plenty of time to do some gift shopping before my next train.
There are undoubtedly much nicer traditional Japanese restaurants right outside the train station in Nagano, with wonderful hospitality, a larger menu (including drinks), and a comfortable ambiance — perfect for spending a liesurely lunch or an evening with friends or colleagues. But these train platform noodle shops all over Japan differentiate themselves from their competition through important attributes like location, convenience, and speciality. And by automating order-taking while creating a compact, highly optimized work station for the attendant, the business is also able to keep costs incredibly low without sacrificing quality — aside from 7-Eleven onigiri (rice balls), this was by far the least expensive meal I had in Japan, and yet it was also one of the tastiest bowls of noodles I had during my two-week trip.
I could also argue that this noodle shop meets the definition of a good MVP — core features that generate revenue without unnecessary frills — while also successfully differentiating from restaurants that serve similar noodles. With a location primed to serve rushed travelers, this train station platform noodle shop provides a unique local delicacy at very low cost. And with the revenue and loyalty of frequent diners at a small shop like this, a wise business owner could potentially expand to other locations and even take over that upscale soba restaurant across the street from the train station.
It’s far too easy for product managers to fall into a comfortable trap of focusing merely on a feature set (or worse, interesting or “fun” technology), losing sight of the bigger picture that includes the fundamental problem you’re trying to solve, the competitive landscape, industry focus, user segmentation, and so on. For those of us who’ve survived failed startups, I know we’ve learned these lessons and that all of this feels very basic. But, so often rushed to deliver something functional for investors or stakeholders, I believe failure to differentiate is one reason why so many V1 products defined as overly narrow MVPs fail — they lack the differentiation necessary to make the product attractive or desirable. In an age when many users can quietly use SaaS alternatives to corporate-mandated systems (how many enterprise-wide instances of Slack start from the quiet frustrations of a handful of employees?), I believe this is true for internal corporate IT projects as much as it is for the hottest new app. I’m certainly not advocating the polar opposite of a narrowly focused MVP or V1 product — merely suggesting that MVPs can be too small as well as much too large.
So, the next time I’m defining a minimally viable product, I won’t just be thinking about my latest morning coffee here in Seattle, I’ll be thinking back to that wonderful bowl of buckwheat noodles in Nagano, considering how to differentiate my product rather than meet minimum functionality.