5 Successful Businesses That Got Huge By Starting Small

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Will this idea germinate into a success?

CC Image Courtesy of Ritesh Man Tamrakar on Flickr

Susan Feldman, cofounder of shopping site One Kings Lane, attributes the company’s success to not aiming to build the next big thing — she recommends “that if you have an idea and you want to do something, starting small is okay.”

Feldman’s advice mirrors the wisdom many companies follow when introducing their product or service to the market: begin by testing interest and enthusiasm with an MVP, or minimum viable product. This “barebones” product has just the necessary features to receive money and feedback from early adopters. Not only will this provide you with constructive criticism from your core audience, but a strong user reception validates moving forward with a product. Look to these five success stories to see how companies have used their MVPs to float their product to the marketplace.

1. Dropbox’s MVP was a video showing how to use the application

Before this near-indispensable file-sharing service was built, Dropbox cofounder and CEO Drew Houston knew there were already tons of cloud storage start-ups, and while Dropbox would offer something different and more effective, development wouldn’t be easy, since a product that works across platforms and operating systems is innately tricky. If Dropbox created the application, would users sign up?

To find out, Houston posted a three-minute video on Hacker News in April, 2007, showing users how to use the product on his desktop. The video played to the right audience: users had lots of helpful comments and feedback, and as well as pointing out potential problems, Houston collected 70,000 email addresses in one day. The green light was given from users — not developers, investors, or consultants — that the product was desired.

2. Twitter launched internally

Initially conceived of as a way to share status updates with friends through SMS messages, Twitter was launched internally within Odeo — where Business Insider reports that “employees obsessed with Twitter were racking up monthly SMS bills totaling hundreds of dollars.” It’s one thing to get employees to volunteer to test another product; it’s something else entirely when their attachment extends to spending their own money to use a company product.

Twitter changed greatly from the original internal product, morphing from a social tool to a source of news, information, and conversation with both friends and strangers. As Evan Williams, cofounder of Twitter comments, “Any time you’re building a product, there are a million things you want to add to make it better, but the fact is the vast majority of them will not impact your success.” Starting with a simple, barebones product allowed Twitter to integrate feedback, and grow and develop the service through iteration.

3. Groupon used very basic existing technology

Before Groupon, there was The Point, a product aimed at bringing people together to solve problems. In an interview on Mixergy, Andrew Mason remember that he spent eleven months working on The Point to “get everything just right and make sure that it aligned with my complete vision of what I wanted this platform to be.” The Point flopped, and Mason learned a valuable lesson. Groupon was built in a month, using a WordPress blog, with daily deals posted as blogposts. Instead of developing software, Business Insider reports, “customer support head Joe Harrow would spend three hours every afternoon personally emailing all the customers who bought Groupon vouchers whenever a deal closed.”

But it doesn’t matter how Groupon looked, or the hours of grunt work required after a sale: unlike the elaborately conceived and created prior product, Groupon was a hit. As it turns out, we are all very interested in getting a bargain. And while this method of testing the audience before getting the back-end in place made for a very hectic first year, it also was a very profitable time.

4. Zappos gauged user interest with a dummy site

Groupon is not the only commerce company to have launched with a site held together with the technology-equivalent of duct tape: Zappos, the still-reigning royalty of online shoe sales, launched sans customer service, inventory, factories, or a shipping system. On a failed quest at the mall for a particular pair of shoes, founder Nick Swinmurn had discovered an opportunity in the market: there was no major online destination to purchase footwear. As Swinmurn told Business Insider, he “went to a couple of stores, took some pictures of the shoes, made a website, put them up and told the shoe store, if I sell anything, I’ll come here and pay full price.”

Compared to the shoe-selling juggernaut Zappos has become, the MVP was decidedly low-tech. But as it turns out, for Zappos’ MVP, design and technology was less important in the MVP stage than answering the question: will people buy shoes online?

5. Fifty Shades of Grey started as fan fiction

For a broader example of an MVP, consider Fifty Shades of Grey, which began as fan fiction, and had its rights snapped up by Random House only after its proven success as a self-published phenomenon. Or the Smitten Kitchen Cookbook, written by Deb Perlman after years of steady traffic to her blog, SmittenKitchen.com. Or Julie & Julia, the movie born from the book, which itself was developed from her blog. What do these projects have in common? From erotica to cooking, the writers started by sharing their words with readers. Book deals — and, in the case of Fifty Shades and Julie & Julia, movie deals — came only after the writer’s success and ability to capture readers with their stories was already established. As Thomas Wolfe said, “Writing is easy. Just put a sheet of paper in the typewriter and start bleeding.” So while providing words for free is not the easiest of options, it is, for publishing companies at least, a great way to get a sense of reader response.

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