New features won’t save you
At Mixtable we started with an MVP to get initial customer feedback, and subsequently were able to gather the first KPIs regarding registration, activation, retention and referral. If you don’t see a product-market fit, don’t expect additional features helping you.
You have thought about your product and built out your business model (which obviously can change in the future). With your next steps you want to validate your assumptions with a MVP. Assumptions will be qualitative and high-level like “Users will register/book on my website” but it also makes sense to cross-check first KPIs with your business model. For us, the actual conversion to Mixtables initially was not in the same ballpark as the conversion we used for forecasting the business model. As a result, it seemed we couldn’t operate profitably even after scaling up. We hoped to significantly increase our conversion by implementing or optimizing features, however, this turned out to be wishful thinking. Optimizing won’t change the game.
How many signup options do you need?
Ok, it’s a German thing that Facebook signup is famous like Putin in the USA. A lot of people are skeptical or simply don’t use it because they are afraid of what happens to their data. Taking that into account, we built an option to signup with the user’s email address in hopes this would increase our signup conversion. Assuming you have a signup conversion of 10% just using Facebook, what do you think you will have after implementing signup with email? Well, it’s most likely not going to be 20% or even 15% for that matter. If you end up with an 11-12% conversation you will have done a good job and optimized your business. But unfortunately this didn’t change the rules of the game.
Another example is payment. In the very first version of Mixtable you could book a Mixtable but had to pay for your friends too, so a total of 45€ (Mixtable was 15€ per Person for a group of three). The hurdle for someone spending 45€ vs. 15€ is a big difference. So one could assume an improvement in the conversion could take place by offering a split-payment solution. In which case, you are optimizing your business, but again, haven’t changed the game.
To see if you have found a product-market fit and to determine whether you’re working on a viable product, you don’t need to start with optimizing your business model. Your MVP must give you a clear signal if you are on the right track or not. So don’t have to high hopes for new features!