We look at how Zappos, in the early days of the internet started with a Minimum Viable Product, which continues to inspire Product Teams with its Lean, No Frills approach to validate Demand!
Below the video is a lightly edited transcript of the video.
Recently I was talking to someone at a Unicorn, which offers home maintenance services in cities. The conversation was about how they go about adding new categories.
It turns out that when they add a new category, they use a combination of Google Forms and Google Sheets to publish the category on their website. The orders are captured in the Google Sheets, which are then manually scheduled by people in the backend. And once they validate there is demand for this service, they build the tech stack for it to and integrate into their main application.
This practice of a very "Lean MVP" was something that was first tried by Zappos back in 1999, in the early days of the Internet.
For those of you who are not familiar with Zappos, they are an online shoe retailer which started operations in 1999. And to give it a bit of context, those were the early days of the Internet and we used to use dialup modems to connect to the Internet and pay for connectivity by the minute! The primary use of the Internet at that time was email, chatting (using either chat rooms or apps like Yahoo Chat and ICQ), and also some browsing and some basic commerce.
To put things in perspective, at that time, Amazon was primarily selling books and they were just diversifying into music CDs, toys and basic electronics.
The story goes that Nick Swinmurn, who was the founder of Zappos, was looking for a pair of shoes that he couldn't find in his city, and he came up with the idea of an online shoe store.
And when he was evaluating this idea, he had a very interesting statistic with him, that the
shoe market in the US was worth 40 billion US$ and that 5% of that market (US$ 2 billion) was already buying shoes without seeing them using mail catalogs. So he felt that selling shoes online was a possibility.
What he did for his MVP, was that he registered a domain and he got into an agreement with this neighbourhood shoe store that he would
click pictures of whatever shoes were available there,
post it online
and whenever someone place an order online, he would go to the shop, buy that shoe at full price and ship it to the customer.
The shopkeeper didn't have any issues with the agreement; he wasn't losing anything, and if
anything, you know he would get additional business.
So Nick started off like that and he started getting orders, which helped prove that people were indeed willing to buy shoes online. In addition to that, he also got rich insights into what kind of people bought shoes online, where they were based out of, what kind of shoes they were buying, what colours and sizes sold more online.
Using the data, Zappos build out a business including inventory, warehouses, manufacturer tie ups and so on. And this business really took off!
So well that in 2009 Amazon acquired Zappos for 1.2 billion dollars!!!
And to this day you see businesses adopting a very lean tech approach when they think about their MVPs. Like the Unicorn, I was referring to at the beginning.
The key thing to keep in mind when building out your MVP is that it should offer an end to end solution and it should reach your early adopters.But it need not involve a fully built out
technology solution, and wherever possible you should use faster and cheaper alternatives such as Google Sheets or Forms so that actually you can get your product out to market sooner.
In the next few posts we will be looking at, a story around early adopters and we also the
concept of an end to end solution from a customer perspective. So do keep an
eye out for those!
If you want to bounce off creative ideas for developing an effective and quick MVP ...