Monday, April 16, 2012
I have been using the Lean Startup and Business Model Generation tools in my MBA capstone. One of the ideas we have been using is to create a minimum viable product ("MVP"), and then test it with potential customers. It seems to be working quite well in the class.
But since these books are pretty new, and there aren't so many examples out there, we have also had several hundred students searching for examples.
Today, one of my students, Abhishek, sent me this example, with the following comment: "To test their MVP Pebble used Kickstarter.com where they put a video for the watch with the intention of raising $100,000 to manufacture this watch. They met their target funding in less than 2 hours and currently have raised more than $2 million due to the huge interest in the product."
He sent me this email at 9:30 am this morning. By 4 pm, they were at $3.2 million.
Several years ago, Paul Graham and others started pointing to how the cost of starting a startup was dropping, and that this was, perhaps an existential threat to venture capital. For a while, Kickstarter probably just looked cute to the VCs... non-threatening. But in the past few weeks, first Congress passed a crowdfunding bill, and now a startup has raised over $3 million on Kickstarter in a matter of days.
Wonder if VCs still think that's cute? Or are they starting to feel nervous?
This looks like a whole new way of bootstrapping...and it will be interesting to watch how it develops, as well as what other types of products and services begin to hit larger numbers on these platforms.
For an interesting podcast on how Kickstarter got started, as well as concerns about where products like this fit (compared to projects like documentaries) check out this From Scratch interview.
-May 7 update: interesting analysis from Robert Fabricant at Frog Design.