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The concept and use of the Minimal Viable Product in the Product Development Lifecycle, and the Capstone Project

What is a “Wizard of Oz” MVP

A Wizard of Oz MVP is a type of minimum viable product (MVP) that creates the illusion of a fully functional product, but secretly depends on manpower to deliver the solution

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. The user is unaware that backend functions are done by humans

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. On the front end, the impression of a completely functional product is delivered, but on the back end, all orders are executed manually

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. This approach allows for quick creation of effective prototypes and testing of market response to a service or product without actually creating anything

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A classic example of the Wizard of Oz MVP is Zappos, an online shoe retailer that Amazon acquired for $1.2 billion in 2009

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. Another example is Aardvark and Cardmunch

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. The most famous success story of this MVP approach is Amazon itself

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. When Jeff Bezos founded Amazon, his goal was to turn it into the biggest bookstore in the world. He achieved that goal partly through bootstrapping and the Wizard of Oz MVP approach

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How does the Wizard of Oz MVP differ from other MVP approaches

The Wizard of Oz MVP differs from other MVP approaches in that it creates the illusion of a fully functional product, but secretly depends on manpower to deliver the solution

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. The user is unaware that backend functions are done by humans

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. On the front end, the impression of a completely functional product is delivered, but on the back end, all orders are executed manually

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. This approach allows for quick creation of effective prototypes and testing of market response to a service or product without actually creating anything

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Compared to other MVP approaches, the Wizard of Oz MVP is easier and cheaper to implement and helps to achieve the goal of MVP, which is to collect customer feedback

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The Concierge MVP is another type of MVP that is similar to the Wizard of Oz MVP in that backend functions are done by humans, but the difference is that the user is aware of it

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. The Concierge MVP is great for generating ideas in the face of uncertainty about the solution and for better understanding market problems and for uncovering new ones

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The Wizard of Oz MVP more accurately reflects what the final user experience will be when you eventually build the product

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. The customer doesn’t really care whether the back-end of your service is run by a human or an algorithm - they only care about the end result

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. However, the success of a Wizard of Oz MVP relies on the human behind the screen knowing their job and doing it well, making it more open to human error than other MVP types

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How does the Wizard of Oz MVP compare to the Lean Startup approach

The Wizard of Oz MVP and the Lean Startup approach are both methods for creating and testing a minimum viable product (MVP), but they differ in their approach.

Here are some key differences between the two:

Wizard of Oz MVP:

Creates the illusion of a fully functional product, but secretly depends on manpower to deliver the solution.

The user is unaware that backend functions are done by humans.

On the front end, the impression of a completely functional product is delivered, but on the back end, all orders are executed manually.

Allows for quick creation of effective prototypes and testing of market response to a service or product without actually creating anything.

The success of a Wizard of Oz MVP relies on the human behind the screen knowing their job and doing it well, making it more open to human error than other MVP types.

More accurately reflects what the final user experience will be when you eventually build the product.

Easier and cheaper to implement.

Lean Startup approach:

Focuses on reducing wasteful practices and improving value-producing practices during product development.

Aims to increase the chance of succeeding with a new product in the market.

Involves creating an MVP with only the core features that are essential to solving an existing problem for prospective customers.

Involves analyzing feedback to make informed product decisions around what should be discarded, what should stay, and what needs to be improved.

Customers who try out the MVP should have genuine interest in trying out the new tech/idea and an understanding that MVP will have flaws as it is just a sample and not the final product.

Calls such customers the ‘early adopters’.

During the early stages of a startup, there is ambiguity around who the core customers would be, what their needs are, and how to solve their problems.

In summary, the Wizard of Oz MVP is a method for creating an MVP that creates the illusion of a fully functional product, but secretly depends on manpower to deliver the solution, while the Lean Startup approach focuses on reducing wasteful practices and improving value-producing practices during product development and involves creating an MVP with only the core features that are essential to solving an existing problem for prospective customers.

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A table of the different MVP formats commonly used in product development and capstone projects:

Table 1

Table 1

MVP Format

Description

Landing Page MVP

A single page that describes the product or service and collects user sign-ups or feedback.

Concierge MVP

A manual version of the product or service that simulates the experience of using it.

Wizard of Oz MVP

A prototype that is operated by a human behind the scenes, giving the illusion that the product is functioning.

Piecemeal MVP

A minimal version of the product or service that only includes a portion of the final functionality.

Crowdfunding MVP

A campaign that tests the market demand and collects pre-orders or investment before building the product.

Smoke Test MVP

A fake version of the product or service that measures user interest or demand.

Prototype MVP

A simple version of the product or service that tests the core functionality and user experience.

Hybrid MVP

A combination of two or more of the above MVP formats to test multiple hypotheses or assumptions.

There are no rows in this table

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These MVP formats can be used in various stages of the product development lifecycle, including the capstone project, to validate assumptions, test the market, and gather feedback from potential users. It's important to choose the right MVP format based on the project's goals, resources, and constraints.

The Lean Startup methodology is a product development paradigm which aims to create and launch products or services in a way that maximizes efficiency and minimizes wasted resources. The approach is centered around the idea of creating a minimum viable product (MVP), which is a basic version of the product or service that can be tested with early adopters. By gathering feedback from these early users, the product can be refined and improved before a full launch. The Lean Startup methodology emphasizes the importance of constant experimentation, customer feedback, and agile development. This approach has been adopted by many successful startups, including Dropbox, Airbnb, and Uber.

“As a Shark Tank angel investor, I would advise students to embrace the Lean Startup Methodology as they venture into the world of entrepreneurship. Like Agile Software engineering, this approach prioritizes experimentation and iteration over traditional planning and development processes, which can help reduce the risk of building products that do not meet customer needs or have little market demand. By focusing on putting the customer first, entrepreneurs can gain insights into how customers want the product to feel, look, and act, and how it can be integrated into their lifestyle, business processes, and daily activities.”.

Here are five inspirational case studies of building the minimal viable product and positioning it to customers with a Lean startup approach:

Dropbox: Drew Houston, the founder of Dropbox, started by creating a video demonstrating the product's features and sharing it on Hacker News, a popular news aggregator for developers. This led to a waiting list of 75,000 people eager to try the product. Dropbox's MVP was a simple video that demonstrated its core features, and the feedback from customers helped the company refine and improve the product.

Airbnb: The founders of Airbnb, Brian Chesky and Joe Gebbia, started by renting out air mattresses in their apartment to attendees of a design conference in San Francisco. This inspired them to create a platform that allowed anyone to rent out their spare room or entire home to travelers. The MVP for Airbnb was a simple website that allowed people to post pictures of their space and set their own price. The feedback from early adopters helped the founders refine the product and expand the platform. They were able to differentiate themselves from their competitors by focusing on providing a unique experience for their users. products that do not meet customer needs or have little market demand.

Instagram: Kevin Systrom and Mike Krieger created Instagram as a location-based social network for sharing photos. The MVP was a simple app that allowed users to take photos, apply filters, and share them on various social networks. The feedback from early users helped the founders refine the product and focus on the photo-sharing aspect, which eventually led to Instagram becoming one of the most popular social media platforms in the world.

Zappos: Tony Hsieh, the founder of Zappos, started by creating a simple website that aggregated shoe inventory from various retailers. The MVP allowed customers to search for shoes, order them online, and have them delivered to their door. The feedback from early customers helped Hsieh refine the product and eventually led to Zappos becoming one of the most successful online shoe retailers in the world.

Square: Jack Dorsey, the founder of Square, started by creating a simple mobile payment system that allowed anyone to accept credit card payments using their smartphone or tablet. The MVP was a simple card reader that plugged into the audio jack of a smartphone or tablet. The feedback from early adopters helped Dorsey refine the product and eventually led to Square becoming one of the most popular mobile payment systems in the world.

To become first movers in their industries, students should focus on building work and thinking frameworks that prioritize experimentation and iteration over traditional planning and development processes. This means starting with a minimum viable product (MVP) that allows them to gather feedback from early adopters and refine the product based on their input. In addition, students should focus on putting the customer first by getting MVPs into their hands for free, early on in the cycle, to gather feedback and refine the product.

By embracing the Lean Startup Methodology, students can gain significant benefits and improve their chances of success.

The approach is based on three principles:

untested hypotheses

experimentation over planning

learning from customers

This allows entrepreneurs to fail fast, iterate design, and pivot when necessary, which can help reduce the risk of As a Shark Tank angel investor, I have had the opportunity to invest in numerous innovative startups.

From my experience, I have realized that building a work and thinking framework is crucial for students who want to become first movers in their industries.

Now I will outline some tips on how to do this, to build the minimal viable product and position it to customers with a Lean startup approach.

Tip 1: Encourage creativity and innovation

To become a first mover in your industry, you need to be creative and innovative. You can achieve this by exposing yourself to programming that encourages creativity and innovation. This will help you to think outside the box and come up with unique ideas.

Case Study: Giggles

Giggles is a startup that was founded by three students who wanted to create a social media platform for sharing funny videos. They used their creativity and innovation to create a platform that was different from other social media platforms. They focused on providing a positive and fun experience for users, which helped them to gain a lot of traction.

Tip 2: Use positive encouragement

Positive encouragement is important when you are building a startup. It can help you to celebrate achievements along the way and keep you motivated. However, it is important to ensure that the encouragement is not empty but constructive.

Case Study: Spill

Spill is a startup that was founded by two students who wanted to create a platform for anonymous mental health support. They used positive encouragement to create a safe space for people to share their thoughts and feelings. This helped them to gain a lot of support and funding.

Tip 3: Show that entrepreneurs come in all shapes, sizes, and industries

Entrepreneurs come in all shapes, sizes, and industries. It is important to show students that entrepreneurship is not limited to a specific industry or demographic. Anyone can become an entrepreneur if they have the right mindset and skills.

Tip 4: Understand complex financial issues

Understanding complex financial issues is important when you are building a startup. You need to be able to manage your finances effectively and make informed decisions.

Case Study: Robinhood

Robinhood is a startup that was founded by two students who wanted to create a commission-free trading platform. They understood complex financial issues and were able to create a platform that disrupted the trading industry.

Tip 5: Be prepared to answer hard questions about competitors

When you are building a startup, you need to be prepared to answer hard questions about your competitors. You need to understand your competitors and be able to differentiate yourself from them.

In conclusion, building a work and thinking framework is crucial for students who want to become first movers in their industries.

By following the tips outlined here and learning from the case studies provided, students can develop the skills and mindset needed to succeed as entrepreneurs.

Remember to be creative and innovative, use positive encouragement, show that entrepreneurs come in all shapes, sizes, and industries, understand complex financial issues, and do the research and prep-work to answer hard questions about competitors.

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