The 99,9% Trap: When MVPs stop working
Sometimes, clarifying a client’s needs is just the first step toward uncovering their true motives.
If you’ve ever launched a product you pinned high hopes on, only to watch it plummet—heavy and hopeless, like a downed bomber—you might be making the same mistake as the founder in this story.
Digital Cosmetics: A Strategic Blunder
In the summer of 2020, when almost the entire world was working from home, I got a call from an investor friend. He asked me to sit in on a pitch for a startup that was seeking funding.
‘On the surface, the idea looks very interesting,’ my friend said, ‘but something feels off. I want to hear your opinion.’
The founder—a young guy with product development experience—showed us a stripped-down pitch deck. The logic behind it was straightforward:
1. The entire world is using video calls now.
2. We all want to look our best on screen.
3. Humans are lazy.
4. So, let’s build virtual makeup for women and digital fashion for men and women alike. The app would overlay brows, lashes, lipstick, and hairstyles, while allowing men to ‘put on’ virtual suits over their pajamas.
Even if you rolled out of bed two minutes before the call, you’d show up on screen looking like a movie star—or a finance minister briefing the President.
True to the fashion of the time, the young guy proposed funding an MVP first, and only then opening the checkbook for full-scale development, which wouldn’t come cheap.
‘So, what do you think?’ the investor asked, calling me back after the pitch.
‘I wouldn’t invest,’ I replied. ‘It’s complex, expensive, and risky. And he can’t build an MVP for this.’
The Deceptive Magic of the MVP
Cast your mind back about 15 years. You see a prototype of a mobile banking app that has just two functions: checking balances and transferring funds.
If it works flawlessly, that is a textbook MVP. Gradually, you can layer on a lot of new features—bill payments, stock trading, opening new accounts, and much more.
You can start building a fully featured app from an MVP like this for two reasons:
1. Seeing those two functions in action allows the user to imagine how the others would work. That is why this MVP is effective for validating hypotheses.
2. In the event of a failure, the downside for the user is real, but not fatal. They can simply use web banking or walk into a branch.
However, the MVP approach for digital cosmetics or fashion is unlikely to work:
1. You are unlikely to get meaningful feedback from female users if you show them just one way to virtually fill in an eyebrow—and only the left one at that. They will want to see the full functionality first.
2. The stakes of a malfunction are simply too high. No one wants to look like a zombie from a B-movie because the app started mixing up the makeup layers. Just as no one wants their virtual suit to suddenly vanish, leaving everyone on the call to admire their hippo pajamas.
There are products whose viability can only be validated by offering customers a fully finished solution that performs flawlessly 99.9% of the time.
Examples include:
- Luxury cars
- Pharmaceuticals
- Fine jewelry
- Shopping malls
- Self-driving cars
- AI-agents
Launching such products is a venture taken entirely at your own risk. You can operate like Amazon or other companies with bottomless pockets—you can launch every new product you like and ‘see what sticks.’ But if your pockets aren’t quite that deep, you can take a different approach.
Customers need it, but…
Most product launch failures stem from an overly simplistic understanding of ‘customer needs.’
That founder was right about one thing: people did want to look good on Zoom.
But that wasn’t all they wanted. They wanted variety—not to look like guys who own just one tie. They expected the app to work seamlessly in any lighting, offer a wide range of settings, allow deep customization of their virtual look, and so on.
Given that a simple MVP was off the table, this made the task astronomically complex, expensive, and time-consuming. Meanwhile, the risk of failure remained high.
When an innovative product is at the core of the strategy, my clients and I always begin with in-depth customer research. We don’t just identify which of the 16 basic needs are present in future customers; we also ask other critical questions:
1. What fears do customers associate with potential solutions?
2. How do they envision the ideal solution (we never base development on these fantasies, but listening to them is incredibly valuable)?
3. What barriers to purchase might stand in the way of sales?”
If you have the luxury of moving incrementally—starting with a $100 MVP, then a $1,000 version, followed by a $10,000 iteration, and only then committing to the $500,000 product—by all means, do exactly that.
But if your future product is ‘non-MVP-able,’ devote a month or two to in-depth customer research. And a word of advice: do not outsource this task to marketing agencies.
But there is a catch. To do this research right, you need to step back from the daily grind and stop hallucinating about your ‘great idea’—something the founder in our story failed to do.
You need to maintain a helicopter view, which is incredibly hard when you are deep in the weeds. That is exactly what we practice in my program, ‘Stay Strategic: A 7-Week Focus Challenge for CEOs.’
It represents a tiny fraction of the cost of a failed launch, but it gives you the clarity to prevent one. Start sharpening your focus here.
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Read also: What Would Socrates Ask You About Your Business Strategy?
Check out my book: Red and Yellow Strategies: Flip Your Strategic Thinking and Overcome Short-termism
P.S. The digital cosmetics startup could burn through millions because they didn’t see reality. My 7-Week Challenge costs less than a business dinner, but it could save you a fortune in lost dev time. Check it out here.