Product Viability and Profitability: Bigcommerce

PRODUCT VIABILITY AND
PROFITABILITY
LEAN STARTUP METHODOLOGY, FASTSPRING.COM AND
BIGCOMMERCE
Define Define Product viability and profitability.
LEARNING Determine the process of product/service

Determine
OBJECTIVES: viability and profitability.
Analyze the process on how to conduct and test

Analyze product/service viability and profitability.
WHAT IS MINIMUM VIABLE PRODUCT (MVP)
• A SCIENTIFIC APPROACH TO CREATING AND MANAGING

START-UP BUSINESSES AND GETTING PRODUCTS THAT
CUSTOMERS DESIRE INTO THEIR HANDS QUICKER AND
MORE EFFICIENTLY THAN EVER BEFORE.
• ERIC RIES, PIONEER OF THE LEAN STARTUP MOVEMENT,
DESCRIBES A MINIMUM VIABLE PRODUCT AS: “THE VERSION
OF A NEW PRODUCT WHICH ALLOWS A TEAM TO
COLLECT THE MAXIMUM AMOUNT OF VALIDATED
LEARNING ABOUT CUSTOMERS WITH THE LEAST EFFORT”.
• BY EXPOSING THE EARLIEST FORM OF A PRODUCT IDEA
TO CONSUMERS YOU CAN MAXIMIZE YOUR LEARNINGS
OF THE PRODUCT AND ITS POTENTIAL WITHOUT
INVESTING YOUR MAXIMUM TIME AND EFFORT.
• AS A RESULT, MINIMUM VIABLE PRODUCTS ARE
CONSIDERED A RISK REDUCTION TOOL, THAT EXIST TO
HELP START-UPS TEST THE WATER WITHOUT PRODUCING
SOMETHING THAT’S NOT ECONOMICALLY VIABLE.
• WHILE A MINIMUM VIABLE PRODUCT IS DESIGNED
TO TAKE LITTLE TIME AND EFFORT TO CREATE IT, IT
DOES NOT NECESSARILY NEED TO BE SOMETHING
THAT’S ROUGH AROUND THE EDGES.
• ULTIMATELY ITS FEATURES SHOULD REFLECT THE
DEMANDS OF THE PRODUCT AND MARKET.
• THINK OF IT AS A PROTOTYPE – KEEP THE FEATURE
SET AS SIMPLE AS POSSIBLE TO TEST THE WATER
AND COLLECT THE MAXIMUM AMOUNT OF
VALIDATED LEARNING FROM CONSUMERS WITH
THE LEAST EFFORT AND COST.
6 STEP FRAMEWORK WILL HELP YOU
DETERMINE THE FEASIBILITY OF YOUR IDEA.
• STEP 1: DETERMINE YOUR TARGET

CUSTOMER
• STEP 2: UNDERSTANDING THE NEEDS
OF YOUR CUSTOMERS
• STEP 3: DEFINE YOUR VALUE
PROPOSITION
• STEP 4: OFFER UP A CORE SET OF
FEATURES FOR YOUR MINIMUM
VIABLE PRODUCT (MVP)
• STEP 5: BUILD THE MVP PROTOTYPE
• STEP 6: GET YOUR MVP IN FRONT OF
CUSTOMERS
TO START, YOU’LL NEED TO ASK YOURSELF SOME SERIOUS
STRATEGIC QUESTIONS ABOUT YOUR PRODUCT’S VIABILITY.
• IS THE IDEA PRACTICAL?
THINGS TO CONSIDER • WHAT OBSTACLES LIE AHEAD?

DURING A PRODUCT • WILL IT NEED SUPPORT SERVICES OF SOME KIND TO
VIABILITY ANALYSIS
ENSURE CUSTOMER SATISFACTION?
AFTER YOU ANSWER THOSE QUESTIONS, IT’S TIME TO
CONSIDER THE MORE TACTICAL ASPECTS OF YOUR PRODUCT
AND BUSINESS.
• THE SIZE AND WEIGHT OF YOUR PRODUCT WILL HAVE AN
IMPACT ON HOW MUCH YOU SELL.
1.
• IF THE PRODUCT YOU’RE CONSIDERING IS LARGE,
CONSIDER AWKWARDLY SHAPED OR HEAVY, YOU’RE GOING TO HAVE
PRODUCT SIZE SOME HIGH SHIPPING COSTS.
AND WEIGHT. • COURIERS' RATES AND PRICES FLUCTUATE, WHICH COULD
FURTHER IMPACT YOUR COSTS.
• SHIPPING COST IS A TOP REASON FOR CART ABANDONMENT.
THINK YOU CAN • ONLINE RETAILERS THAT OFFER FREE SHIPPING HAVE INCREASED
PASS THE COST OF CONVERSION, AND FREE SHIPPING IS NOW EVEN CONSIDERED
SHIPPING ON TO THE NORM BY MANY IN THE INDUSTRY.
YOUR CUSTOMERS? • FREE SHIPPING HOWEVER IS TIGHTENING PROFIT MARGINS
ACROSS ALL INDUSTRIES. IN ORDER TO STAY COMPETITIVE WHILE
GENERATING REVENUE, YOUR BEST BET IS TO KEEP YOUR
PRODUCT SMALL AND MINIMIZE SHIPPING COSTS.
• FRAGILE PRODUCTS NEED EXTRA ATTENTION WHEN SHIPPING
TO ENSURE THEY ARRIVE IN PERFECT CONDITION.
• TYPICALLY, DURABLE PRODUCTS COST LESS TO SHIP AND
2. LIGHTEN YOUR CUSTOMER SERVICE AND REPARATION BURDEN
CONSIDER FOR PRODUCTS THAT BREAK EN ROUTE TO THE CONSUMER.
PRODUCT • THEY ALSO USUALLY COST LESS TO STORE.

FRAGILITY. • FRAGILITY SHOULDN’T COMPLETELY DISSUADE YOU FROM
OFFERING A CERTAIN PRODUCT, BUT JUST KEEP IN MIND THAT
OPTING TO SELL FRAGILE GOODS WILL INCREASE COSTS FOR
SHIPPING, INVENTORY AND CUSTOMER SERVICE.
THE DRYER TEST
I always tell first time entrepreneurs to test

out their shipping by putting their most
fragile product in a box and packaging it
correctly. Mindy Regnell, Product Marketing
Specialist, BigCommerce.
• MANY ENTREPRENEURS FORGET THAT A SINGLE ITEM CAN
OFTEN CONTAIN MULTIPLE SKUS.
3. • A SKU, STOCK KEEPING UNIT, TYPICALLY REFERS TO
CONSIDER COLOR, SIZE AND OTHER VARIATIONS OF A SINGLE
SKUS. PRODUCT.
STOCK • IN GENERAL, THE MORE SKUS YOU HAVE, THE MORE

KEEPING UNIT ATTENTION, TIME AND MONEY YOU WILL NEED TO SPEND
IN TRACKING AND MAINTAINING INVENTORY.
• DON’T LET SKUS
DISCOURAGE YOU BUT BE
AWARE OF THE ADDITIONAL
COSTS AND REPARATIONS
FOR PRODUCT MIX UPS
DURING FULFILLMENT.
• ALSO BE AWARE THAT THERE
ARE PLENTY OF TOOLS AND
RESOURCES TO HELP YOU
WITH INVENTORY
MANAGEMENT TO
STREAMLINE THIS PROCESS.
• HAVING A CONSUMABLE OR DISPOSABLE PRODUCT IS
GREAT FROM A BUSINESS PERSPECTIVE, BECAUSE IT
PROVIDES YOU A BETTER OPPORTUNITY TO EARN
4. CONSUMER TRUST AND BUILD YOUR BUSINESS FROM
CONSIDER REPEAT SALES.
PRODUCT • THINK RECURRING, IF POSSIBLE, WHEN CONSIDERING

YOUR PRODUCT OFFERING. OVERALL, THIS CAN HELP
LIFESPAN.
LOWER YOUR MARKETING COSTS AND INCREASE YOUR
AVERAGE CUSTOMER LIFETIME VALUE.
IS THERE A DOWNSIDE OF PURSUING PERISHABLE
PRODUCTS?
• THERE ARE MANY SUCCESSFUL BUSINESSES OUT
THERE THAT SELL PERISHABLE PRODUCTS.
• HOWEVER, THERE ARE SOME OBSTACLES TO
OVERCOME WITH THIS TYPE OF PRODUCT,
INCLUDING STORAGE, SHIPPING AND PRODUCTION.
SEASONALITY MEANS THAT THERE ARE DIFFERENT LEVELS OF DEMAND
FOR A PRODUCT THROUGHOUT THE YEAR.
• DO YOU BUY SUNSCREEN IN WINTER?
• HOW ABOUT HOLIDAY DECORATIONS IN THE SUMMER?
OF COURSE, THERE ARE DIFFERENT ASPECTS TO CONSIDER, INCLUDING
5. WHERE YOUR TARGET AUDIENCE IS LOCATED (YOUR WINTER COULD BE
THEIR SUMMER).
CONSIDER
SEASONALITY IS NOT AT ALL AN EXACT SCIENCE AND THERE ARE
SEASONALITY. MULTIPLE SOLUTIONS TO THE ISSUE, INCLUDING RUNNING TIMELY
PROMOTIONS AND SHIPPING INTERNATIONALLY.
YOU’LL NEED TO DETERMINE YOUR OWN BUSINESS DOWNTIME, AND
WORK TO OFF-SET EXPECTATIONS AND COSTS DURING THOSE
PERIODS.
IT IS AN OPPORTUNITY FOR BOTH CUSTOMER AND SELLER
• IF YOUR ITEMS ARE SOLD LOCALLY AND READILY AVAILABLE
IN MAJOR RETAIL STORES LIKE TARGET, SM SUPERMARKET
6. OR OTHER ONLINE OUTLETS, YOUR ECOMMERCE JOURNEY
CONSIDER JUST BECAME AN UPHILL, SNOW-COVERED JOURNEY
COMPETITION. FROM THE GET-GO.
• DON’T LET THIS DETER YOU – AFTER ALL, COMPETITION
CAN BE A GOOD THING – JUST BE SURE TO LET IT INFORM
YOUR MARKET VIABILITY RESEARCH.
on top of choosing a product that’s viable in
the market, you should select one that you
7. actually enjoy yourself.
CONSIDER
YOURSELF. Building a successful business often requires
long hours, and those can either fly by or drag
on endlessly depending on how passionate you
are about what you’re selling.
BE PASSIONATE, FIND YOURSELF A NICHE AND START SELLING TO
OTHER PASSIONATE PEOPLE JUST LIKE YOU.
REFERENCES:
• LEAN STARTUP METHODOLOGY

• FASTSPRING.COM
• AND BIGCOMMERCE

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PRODUCT VIABILITY AND

LEARNING Determine the process of product/service

Analyze the process on how to conduct and test

• A SCIENTIFIC APPROACH TO CREATING AND MANAGING

• STEP 1: DETERMINE YOUR TARGET

THINGS TO CONSIDER • WHAT OBSTACLES LIE AHEAD?

PRODUCT • THEY ALSO USUALLY COST LESS TO STORE.

I always tell first time entrepreneurs to test

STOCK • IN GENERAL, THE MORE SKUS YOU HAVE, THE MORE

PRODUCT • THINK RECURRING, IF POSSIBLE, WHEN CONSIDERING

• LEAN STARTUP METHODOLOGY

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