What is ‘The Minimum Marketable Product’?

The minimum viable product (MVP) is a powerful concept that allows you to test your ideas. It is not to be confused with the minimal marketable product (MMP), the product with the smallest feature set that still addresses the user needs and creates the right user experience. The MVP helps you acquire the relevant knowledge and address key risks; the MMP reduces time-to-market and enables you to launch your product faster. This post discusses both concepts, and it shows how you can use the minimum viable product to create a minimal marketable one. 

You have heard of the minimum viable product(MVP) no doubt, well product managers have what is called the minimum marketable product (MMP). MMP is a product or service that meets the selected customer’s needs.

The minimum viable product (MVP) is a powerful concept that allows you to test your ideas. It is not to be confused with the minimal marketable product (MMP), the product with the smallest feature set that still addresses the user needs and creates the right user experience. The MVP helps you acquire the relevant knowledge and address key risks; the MMP reduces time-to-market and enables you to launch your product faster. This post discusses both concepts, and it shows how you can use the minimum viable product to create a minimal marketable one. (Source: Roman Pitchler)

Take the Apple Watch for example, it’s marketable customer needs are indeed narrow, and rather than being a device for the masses, it satisfies a particular niche market. As opposed to regular watches, Apple’s smart watch provides the ability to receive notifications from your iPhone, an extension that notifies the user through a vibration, when a text message, or phone call is coming in, or an in-app push notification is happening.

Whilst limited, the users can also use their smart-watch to send pre-baked text messages back, as well, and whilst it has an app ecosystem, the apps are meant to be a mere extension rather than replacement to one’s phone.

The obvious benefits of an MPP is that it speeds up development-time-to-market, with lower development effort and larger return on investment. An even greater benefit, is the quick time-to-market means product owners can listen to their users quickly. Even if in the case of Apple they are mostly early-adopters, that vital early and rapid feedback especially in a new category of products means the company is able to respond, adjust and pivot more rapidly.

The least rigid the future roadmap of the product, the better it is, because your roadmap should pivot and adjust dynamically, based on user feedback and reactions, and a minimal product as far as functionality means precise and targeted feedback is more readily available, more focused with the allowance for each individual features and components to be individually validated.

MMP is more focused on less is more, smallest feature-set. That addresses the users needs, with the right level of simplistic UI t hat can be sold and marketed successfully.

The key to creating a successful MMP is to “develop the product for the few, not the many,” as Steve Blank puts it, and to focus on those features that make a real difference to the users. To discover the right features, the MVP is a fantastic tool. (Cited in Roman Pitchler)

Understanding Lifetime Customer Value (or LTV)

Lifetime Customer Value or LTV is a crucial concept in analytics, a metric that simply express what the customer is worth (value), from the time she signs up, throughout her lifetime of interactions with your app, in the future. Through a general formula of value of same x number of repeated transactions x projected length of customer retention, you are able to reconcile how much money you spend on each user, the acquisition and retention costs, versus how much value the customer brings back over a period of time.

LTV also goes by the names of Customer Lifetime Value (CLV) or Lifetime Customer Value (LCV).

Let’s say you spend $8 procuring a customer, based on marketing and other efforts, once at the start, you ideally need to get something back in return, in a sustainable model. In return, your user subscribes to your service for $9.99 a month, for 8 months, the total LTV of $79.92.

Bare in mind that there are variables in here, which makes this an estimate rather than anything more concrete. The projected length of a customer retention is an estimate, as is number of repeated transactions, as past history isn’t always an accurate indicator of future behavior, and if any of the variables are way off the mark, LTV becomes useless. Therefore, use this tool diligently and in conjunction with other metrics, rather than as a sole metric.

LTV is also a long-term game, not a short one, and even if the cost of acquiring a user (Customer Acquisition Cost or CAC) is higher than the initial value, you should aim to have a longer projected length of customer retention, as value increases intangibly for your users, so longevity is key here. Often times, a happy customer over a longer retentative period means their value can increase through upgrades and other cross-selling measures.

Speaking of intangibles, last but not least, you cannot measure the viral value of customers as easily. Word of mouth, social media spreading and customer advocacy of your product through being a satisfied customer yields increase brand awareness and more users, thereby reducing customer acquisition costs for other customers. So, in conclusion, LTV is a strong tool, great in venture pitches, and works better with other metrics, for correlative purposes, rather than alone.

3 Trends Marketers Need to Know About Location-based Advertising |

An excellent article by Steven Jacobs of StreetFight on the 3 Trends Marketers Need to Know About Location-based Advertising.

Location-based advertising has exploded in recent years as brick-and-mortar brands shift digital and traditional budgets to mobile.  The result has fueled the growth of one of the quickest moving sectors in an already chaotic ad tech industry where tactics, strategies and capabilities are changing as fast as the companies offering them.

These changes have implications for a host of stakeholders in the local marketing industry. Tectonic shifts in the way the advertising industry operates — namely, the growth of programmatic advertising — will alter the way advertising spending flows. Meanwhile, the development of more refined technology will alter the tactics used by companies to across the industry run campaigns.

At the Local Search Association’s Conference in Los Angeles Wednesday, executives from a handful of mobile marketing firms discussed some of the key shifts in location-based advertising and outlined the implications for publishers, brand marketers and small businesses.

The machines are taking over the advertising industry. Within a few years, a majority of desktop inventory will be bought through software, according to eMarketer, and programmatic already dominates mobile — the fastest growing category of the ad industry.

But the shift to programmatic isn’t just about creating efficiencies for large brands — it could materially change the way small businesses buy media, says Victor Wong, chief executive at PaperG, which sells dynamic creative software. Wong says that the ability to buy inventory through software effectively reduces the cost floors typically required by premium publishers, allowing a small business to potentially advertise on ESPN.

“The fact that transaction costs are so much lower, [the advertiser] can get just what he or she wants instead of buying wholesale,” said Wong during a panel Wednesday. “It has allowed small businesses to have the same technology as the big guys, but to pay only what they can afford.”

That shift — the ability to buy an ad without a formal relationship between advertiser and publisher — is starting to “democratize” the media business, says Wong.

Points to polygons
There’s an often-overlooked difference between location and place. A location is a point on a map — a latitude-and-longitude that often comes down to a nine digit number. But to understand what is at that location — say a mall or stadium — technology companies need to understand where one place ends and another begins. That’s a much more difficult, and time-consuming process.

Over the past few years, location technology companies have identified millions of places, creating zillions of polygons that represent everything from Best Buys to book stores. The ability to attribute a person to a place — not just location — has opened doors for technology companies to begin to flesh out a clear picture of the people behind the data.

“You create a gradual image of broad behaviors rather than making a massive assumption from a single data point,” said Tyler Bell, director of product at Factual, one of the largest location data startups. “All of these observed activities, where people are moving from one point to polygon, give you a holistic broad-based view of the user.”

Better creative
“When you can blur that line when consumers no longer realize that they are seeing a templated ad — that’s when things start to take off,” said Greg Crockart, CEO of North America at WPP-owned creative agency Candyspace. He was talking about the need for marketers to continue to push the creative used by firms on mobile.

Crockart says his agency has started to invest increasingly in mobile campaigns that tie into other forms of media as a way to buttress both experiences. For instance, the company ran a campaign for the the film Hot Tub Time Machine last year where it allowed users to digitally throw a beach ball from a mobile phone to a digital-out-of-home ad placed in Times Square.

We’re getting that double impact of hitting on both screens,” said Crockart. That’s another form of retargeting for us, and the data proves that if you hit people across multiple screens you will increase engagement.”

Be sure to subscript to StreetFight, to get your fix (pun intended) of location-based marketing journals. 

Assess your market size with OMSAT, for Free

The Ornicept Market Size Assessment Tool, or OMSAT for short, is a simply excel spreadsheet, but has the power to provide insight for entrepreneurs and investors to access statistics from the U.S bureau of Labor Statistics, to 

This tool was graciously released under the Creative Commons (CC) license, to help startups have access to information only larger corporations can afford to pay to research, in getting the market size, which will allow for a more scientific interpolation of number of users that may be interested in certain goods or services, allowing for better assumptions. The spreadsheet is capable of using formulas to work out expected value per user per year, and over life-time. 

With the information you can generate, you can present to investors a stronger case for market need, and portray a more accurate assessment of the market-space, answering an important question that a lot of investors might have. 

Once you have built a case for your expected value per user per year, the workbook will calculate a bottom-up market size valuation.

— Russell Conard

 The tool uses employment data from 2012 as well as projections for 2022. You can download the tool by clicking here.

Review of Lean Customer Development

In following suit with the other Lean books in the series, Lean Customer Developmentby Cindy Alvarez  gives companies a tangible and pragmatic approach to develop and validate product ideas through iterative and targeted customer development research. The premise of this book lies in providing a fast and flexible research methodology to understanding one’s customers, their behaviours, and most importantly, how to build insights that can give you more accurate assumptions.

Developing your product, whilst adding and augmenting your feature list, you want to be sure to have a valid hypothesis, and concurrently re-validating your hypothesis as you iterate your product, providing a layer of assurance that you are progressing in the right direction. This book is full of interviewing techniques, the types of questions to ask, mapping your customers (and how to even find your customers before the product is built, which the author goes into great detail in), what to ask the customers, what responses and subtexts to look for, and even maintaining a healthy skepticism.

The author in the later chapters guides you in building an audience-driven MVP (minimum valuable product), with chapter 7 outlining various case studies, which I found to be an excellent boilerplate that assisted me in conceptualising how to maintain a customer-focus whilst building the 1.0 features I wanted for my product.

Along with another of my favourite books, Lean Analytics, I highly recommend this book for anyone who is looking to create a new product, or even work on a major revision for an existing product, and rather rely on their own biased assertions, get valuable customer involvement and input earlier on in the researching stages. This book is easy to read, and for me I will tend to re-read this book a few times, and use it as a reference guid as well.

Concise: 5

Level: 2

Prior Knowledge: None. Made for marketing strategists and entrepreneurs.

My rating: 4.5

AuthorCindy Alvarez
TitleLean Customer Development
Publisher: O’Reilly Media
Date: May 2014