We are in the midst of a B2C innovation revolution. It has never been easier to launch a new product or service thanks to falling costs of development and deployment. And the market opportunity is limitless, as 7 billion people are increasingly within reach of digital technology. Several fast-growing, billion-dollar businesses like Facebook, Groupon, and Yelp are the result. No wonder VC funding of consumer information services was up 3x from Q4 ’10 to Q4 ’11 (Venture Beat).
But consumer innovation is new ground for most entrepreneurs and investors. Many investors have a history of creating and funding B2B and corporate technology startups, which is far from the general consumer marketplace. And entrepreneurs often rush a Minimum Viable Product to market to find only a trickle of early users.
As a result, many mistakes are being made. The actual cost of failed ideas and opportunity cost of wasted time is tragic. There is less and less VC money available (near a 10-year low today), and last year the average VC return was negative 4.6%. Founders and investors need better customer development feedback, earlier, in order to make better diligence and development decisions.
Research tools are out there, but few are designed for startups’ use. Large companies have used concept testing services to improve the odds of success for years, but they are built for traditional products and services rather than digital innovation. Online survey tools are available, but they leave entrepreneurs to create questions and interpret results on their own.
We longed for a better way to make investment decisions and assist entrepreneurs, so we created the Minimum Viable Concept Test to bring smart customer development research with a price, speed and understanding that matches startups’ needs.