When we have the idea of a venture or a business, we regularly put together the entire structure, the concept, we invest in infrastructure, in raw materials, in the constitution of the company, in hiring personnel, and we proceed to go to market with what we believe, it will be a successful product or service. But most of the time it does not turn out that way, or in the best of cases, not in the expected time.
While in Europe 80 percent of start-ups survive the first two years, on our continent only 45 percent manage to survive during that period. The art of entrepreneurship every day requires strategies, processes and actions on the part of entrepreneurs, and much more so when we are receiving the blows of the damage that the Covid-19 pandemic has left on a human, social, health and economic level, the which, coupled with the war between Russia and Ukraine that has accelerated the shortage of some products and raw materials worldwide.
That is why, in her recent speech at the World Economic Forum held in Davos, the Director of the International Monetary Fund (IMF) Kristalina Georgieva, stated that: “We are experiencing one crisis after another. First the pandemic, now the war in Ukraine. And that is a big setback for the recovery of the world economy.”. Furthermore, he indicated that: “As a result, we have had to lower the growth prospects of 143 countries for 2022 and take global growth from 4.9, where we projected it in October last year, to 3.6 where it is today. And, in addition, we see a very significant acceleration of inflation in many countries “.
For his part, Jamie Dimon, president and CEO of JPMorgan Chase, referring to the global economic outlook, pointed out that “Right now, the weather is sunny, things are going well. Everybody thinks the Fed can handle this. That hurricane is out there, coming our way. We just don’t know if it’s a small one or Super Storm Sandy.”.
According to a Fortune survey released in late May, 75 percent of businesses expect a recession. The firms that make up the Fortune 500 list participated in it, including Apple, Walmart, Amazon or Exxon Mobil. First of all, in this global scenario, and in the face of the looming economic crisis and the so-often-announced “economic recession”, how can entrepreneurs make better use of the resources available to them and be more efficient when starting a business? ?
Let’s talk about the Minimum Viable Product (MVP), a tool that large companies use every time they are going to start a new project, and that is nothing more than developing a prototype of our product or service with basic or minimum functions that allow those potential clients evaluate them, and thus, check their interest and how much they would pay for it.
What is the MVP for? According to ESERP Business School, firstly, to find out if the product or service is really necessary and if there is a consumer base willing to pay for it; to refine product design and functionality so you can focus on what you really like and add value to; minimize development costs and save by not having to invest in features or functionality that customers do not care about; reduce the risk of failure and the uncertainty associated with the launch of new products, allowing you to create a product or service with a greater probability of success; and lastly, start building a loyal customer base through the early adopters. And how do we create an MVP?
Identify market needs: Ask yourself what problem it solves and why a person would buy it, just as you should analyze the competition or those similar options, as well as unattended needs.
Profile your ideal customer: Assessing consumer preferences and habits will allow you to create a product or service with features and functionality that they appreciate.
Prepare the PMV: With the data collected you will be able to create the prototype of your product or service and submit it for the consideration of potential buyers.
Evaluate the results: Seek feedback, interview customers, take surveys to help you choose the product features that work best.
The most important thing about the elaboration and implementation of the PMV is that at a low cost it will allow you, if the data is positive, to go ahead with your idea, but if the results are not what we expected, we will be able to modify or discard the project, without having incurred significant costs and having already traveled a path regarding the potential of our product or service.
Finally, I leave a phrase from the Director of the IMF, which I think is very appropriate for us entrepreneurs, “If we look to the future, we have to learn a very important lesson from the globalization of the past. It didn’t work for everyone and so the future has to be about localizing the benefits to communities and being much more aware that it’s not about global profits, but about local benefits.”.