Minimum Viable Product · Angel investing

Building a demo vs. MVP?

Steven Corn CEO at Metis Advantage

May 11th, 2016

I am nearly done creating my business plan and presentation deck. My idea centers around building a powerfully interactive web app. I am in the process of finding a designer to create mock-ups for me. The next big decision is whether or not to build a demo or a MVP. I would need to find some early stage Angels to fund the building of the demo. Immediately afterwards, I will need to go back into fund raising mode to secure the funds to build the MVP.

So my thinking is why not simply jump into the deep end and seek enough funds to build my MVP right away? It seems that building the demo will delay that process. Hopefully with my presentation, biz plan financials, and mock ups, I can make a compelling case.

I suspect that there are many differing opinions on this pro and con. I'd like to get some advice. Thanks.

Kate Hiscox

May 11th, 2016

But why even build a demo and spend time and money on this? Have a conversation, run some polls.. draw on napkins. Find your first customer and let them design their version of your good idea and then build the screens and interactive prototype. 

Sam McAfee Building Popup Incubators for Corporate Innovation Programs

May 11th, 2016

Steven, it depends on what your business model is.

An MVP is a learning instrument, a minimal version of your product that provides some amount of real value for real customers. If you plan to raise money, you will almost certainly need to show traction. It's unlikely you will get funding, even angels, without a demonstrable revenue or growth display. An MVP will help illustrate that model.

But of course you're going to have to get it built somehow. You can't really start with zero upfront cash investment of your own.

Have you validated that your idea targets a real pain in a sizable reachable market? Have you done customer interviews? Do you really know what to build? That's what I'd be wondering before making an MVP at all.

Brian Anderson

May 11th, 2016

Steven- I'm at a very similar point as you are in the process -- the inflection point of needing funding to move forward. I did soft pitches to accelerators, angel investors, and startup CEOs this week, and the feedback was consistent... "great idea, but show us what you mean - don't juts tell us." There are cheap ways to do that, and there are expensive ways. The recommendation I received was that even though I don't know how to code, I can use a combo of some type of photo software (like Pixelmator for mac,~$30), InvisionApp (free), and a few hours of tutorials on YouTube to get to a still level where I can make a demo that functions nearly identically to how my MVP will (for my specific instance). And the costs are minimal. Digging deeper into their recommendations, they wanted to see me take it as far as I reasonably can before seeking the first round of funding. I'm sure others have great perspective - just my two cents. Side note - not sure what you're using as a framework on the business plan, but the "Business Model Canvas" has been very helpful. The questions I get when pitching are usually addressed by specific things I've thought through using that framework. Again, YouTube is a zero-cost gold mine. Good luck!! Brian

Kate Hiscox

May 11th, 2016

Sam is right. Don't build an MVP until you have customer validation. You don't need an MVP to prove the demand for a product. Tools like Invision and other prototype tools will do a fine job. Find a customer, find five and show them what you're thinking and let them shape that. Start with a conversation and if you have an idea with a set of first customer driven features, go to an MVP and demo it to customers.  

James Allen Co-founder & CCO at Passport Scholars

May 11th, 2016

+1 on what Brian said. I'm working on a B2B SaaS product right now. Since I'm a graphic designer by trade (that's what I studied in school, anyway), I jumped right in and began designing it myself. I've been exporting my designs to .jpg files from Photoshop and importing them into Invision to build a clickable, interactive prototype.

My partner/developer is now using what I've built in Invision to code the actual fully functioning end product.

Feel free to connect with me on LinkedIn - I'd be more than happy to talk more about the process I've gone through to design and build the prototype.

Kate Hiscox

May 11th, 2016

I have to say I don't agree with Muralidharan. Don't let anyone fund your ideas. Validate them first with discussions and sketches if needs be and be sure before you take someone's money. 

A. Andrew Chyne

May 11th, 2016

For an MVP, I would suggest to bootstrap by yourself so that you won't have any liability if it doesn't have a sustainable business model. An MVP is a medium for studying consumers' behavior and response towards your product. It is the right medium for getting primary data so that one can make changes if the situation demands. Take an MVP as a lab for experimenting ideas, whereby you don't need to seek investors and unnecessarily become a liability. If Tech founders could work on an idea-stage product, without any seed funding; I am sure that they would have more liquidity for further acquisition of other companies.
Good Luck.

Bill Lennan Red Rope Social - everyone is an influencer.

May 11th, 2016

I've built clickable prototypes multiple times. 
They were ugly but they got the functionality across ( James Allen's work is likely much better ). 
Doing the clickable prototype helps explain how it works but more important it showed me flaws in my mental design and gave me space to improve before I spec'd something and then spent real $$ on developer hours. 

I agree with all the "sell it first to a real customer" perspectives. You may even get an initial customer to fund the development. 

You haven't mentioned a revenue model - what's in it for the VC??

Murali Neelameghan creating hethi-digital business process platforms & RPA

May 11th, 2016

Steven

Wish you good journey.
In 2016 the Mantra is "no unicorn" startups

- bring your friends and family to seed invest on your ideas. You will see first level of trust in your ideas.
-build a first key POC (you believe thats key and fir others it may sound just theory
- create wire frame preso along withave this POC

That gains confidence

- Business plan
- working tiny poc
- wire frame

This will take you far in next to 3 months max (30-60-90 days plan)

Get angels to Invest. Seed funders will push angels as well as they want to be rich

David Albert Founder & Principal at GreyGoo

May 11th, 2016

I don't disagree with you Kate--but that's assuming Steven hasn't done this to any degree, which he really didn't disclose. He stated, "I am in the process of finding a designer to create mock-ups for me."

You're right--if you haven't spoken to any potential customers or validated the idea at all, then UI designs are premature. But if you already have some level of validation, people do respond better when you can clearly articulate the concept through representative visuals. Also, he framed the question as if he was at the stage of seeking investment.