1. Jan 25th, 2010

    Is Apple a counter-example to Customer Development and MVP?

    I heard this question (in different form) from various people:

    Isn’t Apple a massive counterexample to the Minimum Viable Product movement/theory?

    Let’s put Customer Development in context. If you’re a startup entering a new market in today’s economy (read: non-bubblical times), your biggest risk is most likely not new technology.

    Your biggest risk is running out of money before you find customers for your product (or a product for your customers). Customer Development and (Minimal Viable Product and such) help you mitigate this risk.

    Now, what if you’re an rich company that can throw millions on a hobby project, operates in established markets, and have customers lining up months in advance to buy a product you’ve yet to announce? You’ve got bigger chips to fry.

    $APPL is a strawman, contrasting it with Customer Development will teach you nothing new or important. You should be looking instead at how successful startups operate in new markets, with unproven products. Take, for example, the story of Apple:

    The Apple I and Apple II computers were shown off every two weeks at the club meeting. “Here’s the latest little feature,” we’d say. We’d get some positive feedback going and turn people on. It’s very motivating for a creator to be able to show what’s being created as it goes on. It’s unusual for one of the most successful products of all time, like the Apple II, to be demonstrated throughout its development.

    Selling motherboards to enthusiasts is a classic Minimum Viable Product, and so is the Customer Development process that followed:

    To Jobs’ utter amazement, Terrell agreed to buy 50 computers for $500 each, cash on delivery. There was only one catch to the $25,000 order: Terrell wanted fully assembled computers.

    The trio had originally planned to produce bare circuit boards for $25 each and sell them for $50 to hobbyists who would populate them with the necessary chips and other parts.

    I guess, when you look at the full picture and put things in the right context, Apple does come out as a shining example for the Customer Development story.

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