Minted by SyncDev CEO Frank Robinson in 2001, the term “minimum viable product” gained popularity largely because of Eric Ries’ 2011 book, The Lean Startup. Its mantra was simple: build, deliver, get feedback, refine, and reap customer success.
Given the pace of evolution and expansion in the global marketplace, it’s unsurprising that many businesses wholeheartedly embrace the minimum viable product in their development process. It helps maintain a laser-like focus on continually developing and refining their product offerings.
If the enemy of good is perfection, focusing on basic quality over excellence also gets products to market much faster. This, in turn, opens up revenue channels more quickly, meaning companies (theoretically) start seeing an ROI on their development efforts sooner.
But a product is not a company. It may convert members of your target audience to purchase, but without fully understanding the kind of experience customers have with your product, it becomes infinitely more difficult to keep those customers.
The answer? Shifting your focus to creating a minimum viable outcome.
A rose by any other name may be as sweet, but if we’re talking minimum viability, focusing on product and outcomes are two different things. heard the terms minimum viable product and minimum viable outcome.
Conversations about “product” vary dramatically from industry to industry. Generally speaking, though, it’s the deliverable provided to your customer or user. A developer’s product might look like an app. For a media outlet, it’s its content and where it lives. Professionals like attorneys and accountants deliver a service. But no matter the shape, size, or delivery method, the value provided is the product.
And that’s the simple goal of product development: deliver value. How we measure our progress toward the goal depends on the framework for development.
If it’s about delivering a minimum viable product, we focus on basic utility – does the product do what we say? When pursuing a minimum viable outcome, we focus on how the product delivers – the quality of the outcome, the user’s experience with the product, and their perception of the value provided.
But for either framework to succeed, you need to understand what, exactly, the customer needs. That’s harder than it sounds. Sometimes your customers themselves don’t even know what they need. They know what they want. That want is based on the current offerings in the market. Defining your bare minimum by what is instead of what could be constrains creative and critical thinking to the point that your minimum viable product fails to generate exceptional returns.
The most successful business leaders of our time understand this. As master and pioneer of the outcome-driven innovation model Tony Ulwick explains:
It is often argued…that, ‘A customer would have never asked for the microwave oven.’ That is true, but the microwave oven is not a need—it is a solution. While customers may not know what solutions they want, they most certainly know their needs related to getting a job done. In this case, they know they want to prepare a meal (the job-to-be-done) that is not overcooked or undercooked, and they want to do it more quickly without having to clean up. The problem isn’t that customers don’t know their needs. The problem is that there is confusion and lack of agreement as to what a “need” even is.
When you approach product development in terms of known desires, you get short-term solutions. By actively looking for a better answer to the question than what the customer could know, you get innovation capable of durable impact. Think of it like the difference between a better frying pan and a microwave.
How often have you heard some variation of “the customer comes first” or “the customer is always right”? How often have you seen companies actually walk that talk?
Effective leaders know the value in soliciting and incorporating customer and employee feedback. The product development cycle, however, demands it. More importantly, it requires actually putting the customer first – well before your product is built, let alone hits the market.
To this end, driving toward a minimum viable outcome puts Steven Covey’s timeless advice into practice: seek first to understand, then to be understood.
The way businesses interact with feedback when the goal is creating a minimum viable product falls flat. Initial testing and quality assurance efforts take a look at customer pain points in their initial interaction with the product. This roots value measurements in micro evaluations instead of looking at the big picture.
Put another way, it puts your business at risk of missing the forest for the trees. You get stuck in “risk management” mode – trying to avoid or minimize any negatives before going to market – to the point of limiting upside potential.
When you look at a minimum viable outcome, you see how individual utility points add up to the overarching value generated. Consumer insights shift from being an output of product development to an input, thereby handing you a predictive tool for forecasting results.
This boils down to dollars and sense. Why sink money into a bandaid of a product when you could cure what ails the customer altogether? By reordering the importance of the customer, you end up with a product well above an identified minimum – and get it right faster.
Let’s say you focused on putting the customer first in your product development cycle and went to market. That’s a great start. But if you stop there, your ability to continue generating value by refining your offering gets hamstrung. The feedback cycle that got prioritized during initial development has to persist.
Refinement is a part of product development. If you want to maintain market share and compete with imitators, your product must continue to improve. If your focus shifts from outcomes to product after your initial iteration, creativity goes back to its prior constraints. Your thinking once again gets boxed into what can be done within a known universe.
When your thinking revolves around outcomes, refinement starts grounded in the answer to the question that launched development in the first place: which outcome am I helping my customer achieve?
This makes it easier to contemplate opportunities for improvement. By identifying the goal first, your filtering of customer feedback, competitive analyses, and proposed changes yields productive direction.
They say that steel sharpens steel. Unfortunately, traditional company structures result in a drawer of dull knives that do little to improve products or outcomes.
There are many potential cooks in the product development kitchen. Heads of business development, engineering, operations, and more all have valuable perspectives to offer. When the focus is on a minimum viable product, though, the product development team shoulders much of the responsibility for the end result.
There is no single party responsible for delivering value using an outcome-driven development process. It leverages the input of different departments to improve the experience of the customer, which in turn generates more value from the product.
This also improves organizational engagement. Those who feel heard and valued by organizational leadership report feeling more engaged in and committed to their companies. In turn, these companies tend to outperform their competitors and enjoy greater talent retention.
Outcome-driven innovation is not limited to product development. You can implement and utilize this strategy across your organization. It can both inform and sustain effective strategies in areas like marketing.
At the end of the day, marketing is just communicating value. You demonstrate an understanding of the customer’s pain/needs and explain why your product is the solution. This equation only adds up to success when the explanation is tied to the identified pain.
A product focus in marketing communicates the what. Outcome-focused thinking explains the how. It illustrates an experience and how they will feel. With 95% of consumer decisions driven by emotion, that illustration has far more power than a product description.
Though a focus on outcomes can improve the effectiveness of departments like marketing, it generates an even greater impact as an overarching company objective. Why? It keeps everyone on the same page. As Ulwick points out:
[Outcome-driven innovation provides]all the [company] functions with a single set of customer inputs, all revolving around the main purpose the organization is there for in the first place – to help customers get a job done. A single set of job-based customer inputs drives and aligns strategies for messaging, positioning, purpose branding and sales, along with strategies for beating the competition, pipeline prioritization, concept creation and evaluation, patent portfolio development, acquisition assessment, research and development and other related activities.
When considered in this light, a minimum viable outcome framework always delivers more value than the tunnel vision involved with building a minimum viable product. It not only gets you a better product in the long run but improves the effectiveness of the operations supporting it.
You might be thinking to yourself, “Ok, ok – that sounds great, but what does working toward a minimum viable outcome even look like?”
We’re glad you asked. Let’s start by directly comparing what we’ve learned about minimum viable product and minimum viable outcome thinking.
To understand what that means in practice, let’s use the example of a company focused on making it easier to parse customer reviews for shoppers.
Those focused on product assume pain stems from a lack of centralized reviews. Outcome-oriented businesses know the pain stems from the feelings of frustration because that centralization doesn’t exist.
Minimum viable product proponents zero in on how x = y, or how their product fills a gap. Companies prioritizing outcomes will let feedback guide development, ensuring their solution is experienced in a way that addresses the source of pain.
Product-driven companies rely on product teams to design solutions, limiting the scope of perspectives considered. If the customer outcome matters most, the required teamwork gives you a better result while strengthening your team overall.
When value is defined by product, utility and specs form the message. If value gets defined by outcome, companies make a more complete argument to the customer, with value framed by both utility and experience.
Businesses focused on a minimum viable product limit creativity and room for improvement to the framework of the existing product. By keeping the customer experience front and center, leveraging early and ongoing feedback loops, and empowering teams to work cross-functionally, minimum viable outcome thinking ensures long-term value generation.
Bottom line? Comparing the two approaches in a theoretical makes the differences between them clear. This is what we mean when we say that minimum viable outcome thinking always wins the day.
Companies of all shapes and sizes use minimum viable product and outcome thinking to guide their planning and operations with varied success. Selecting the best approach may depend on the individual company and where it is, but if outcomes are tied to product success, putting the customer first is a solid bet.
Of course, no one gets into or succeeds at business to accomplish the bare minimum. We want to excel. By focusing on outcomes, excellence is more easily attained.
And what business executive doesn’t like the sound of that?
Selecting the framework to guide product development is just one part of bringing an idea to market. You have to develop the organizational infrastructure and strategy to back it up. In our on-demand webinar Turning an Idea or Product into a Business, we dive into all that entails, including:
For more information about our other on-demand webinar series, click here.
This is an updated version of an article from 2020. ©2023. DailyDACTM, LLC d/b/a/ Financial PoiseTM. This article is subject to the disclaimers found here.
Tom Kirby is the founder of Chicago-based file sharing service PrepDD. Before that he was Vice President of Business Strategy and Director of Finance and Operation for VIN-specific auto marketing technology company LotLinx, also of Chicago.
Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.