How to build high fidelity and low cost MVP?
In my last post I wrote about why you should start independent with your startup. Now I would like to show you how I did it in one of my projects.
When I was studying at University of Gdańsk I met really cool guys. We were a good working group and we helped each other in many projects. Over 3 years ago one of those friends called me to say that he had an idea. „Let’s do an e-bay for a secondary raw materials market” he said. I thought that could be a really interesting project.
My programming skills were poor just like my friend. We decided to invite another of our colleague to the team. After a short talk he joined us. Our first step was to make some market research. Wiesław, who was the inventor, knew the market really well. We tried to search some more information about existing solutions but we just couldn’t find anything just like our idea. After some time we realized that our market research was a really big mistake but it was too late to stop the whole project.
After that we started a search for some scripts that could help us in development. First solution costed 20k PLN. We didn’t have that money so we had to search for something else. Our second discovery was over 50% cheaper but it still was over our budget. We’re a type of people who did not give up so easily so we continued our search. And finally we found a working script for 399 PLN. It had many interesting functions but we needed more possibilities. B2B market has its own rules and the script was made for B2C so we had to make some changes. The script with new functions costed us 1300 PLN.
We instaled it on our server and connected the domain. At the same time we started to collect information about companies that might be interested to try our product. We chose some companies profiles from an online database and we launched our search script. Its role was to find companies contact information like an e-mail, address, business profile or telephone number. After one week we got over 25000 companies in our database.
Not every of those companies was of our interest. We excluded some of them and at the end of that project phase we had contacts to almost 12500. We couldn’t just send the information to the companies without their permission so we decided to order an e-mail send in one local company that specialized in such things. The company made a campaign and get permissions that we could use in the next step.
We decided to ask the companies about our idea. We made a simple survey about their needs and we sent it to the first group. After that we measured the results and optimized length of our survey and we worked on a call to action message. We did it after each dispatch and at the end we got over 2 times better results than we had in our first group.
Over 50 companies left their e-mail adresses. Our script was ready to test but it was really poorly designed. We decided to ask one of my freinds, who is the best layout designer that I had ever met. We could give him shares in our project but my co-founders wouldn’t agree so we paid 1700 PLN for the new layout, and 500 PLN for its implementation to my other friend.
To that moment our cost was as far below:
- 4 domains: 100 PLN
- script with new functions – 1309,70 PLN
- searching script – 50 PLN
- e-mail campaign – 200 PLN
- new layout – 1700 PLN
- html implementation – 500 PLN
Overall: 3859,70 PLN
We didn’t count our time and work. Just the money that we spent. The website was ready so we decided to send the invitations to companies. Some of them signed in our websites and ohters didn’t. We had a lot of information about the companies so we called to each of them and asked if they needed any help. We also promoted each company for the invitation of their contacts to our website. We paid in cash for that but used a little trick. The money that we paid was to use only on our website. So it costed us nothing. After 2 days of calling we had 10 company profiles in our system and 2 of them were invited by other companies.
Unfortunately our project stopped. There were many different problems, but we learned a lot. Our MVP costed us overall 3859,70 PLN and it could have been even cheaper. As you can see building a new company with little budget is not so hard.
photo: CC flickr.com by Simon Cunningham