The Changing Standard of the MVP Part 1: Designing for the Enterprise

by Eric Tobias - Partner

We spend a lot of our time thinking about design — more than just within our products, but our processes. Almost everything we do has design as part of the influence. Design as a practice has grown immensely over the past few years and has become the biggest differentiator in software. Products which reduce clutter and empower users through simple and intuitive workflows — products that go to extreme lengths to hide complexity — are today’s winners.

When I first started building web-based software (20 years ago) the ability to solve a functional problem was the most important criteria for adoption. For example, when sales reps could report their activity digitally versus tracking everything on paper, the time savings was so significant that the actual user experience wasn’t the driving factor. So what if it took 16 clicks? It was so much better than the old way, users were willing to put up with it.

Fast forward 20 years, and things have really changed. Since we all use technology on a daily (if not minute-by-minute) basis, we expect more from technology than ever before. And our tolerance for a bad experience is so much lower because we now know what great looks like.

Some of our best products at High Alpha are ones that seem almost obvious at first glance. They are simple, easy to use, and well understood almost immediately. While this is great from a end-user perspective, I’ve noticed an interesting response from executive sponsors, especially those who work in larger enterprises.

Many of the enterprise customers we work with have deep and complicated systems that were specifically tailored for them. This creates an expectation that nuanced and “advanced” (and therefore more powerful and valuable) products are inherently more complicated. I’m concerned some of today’s more senior executives have a negative bias towards products that appear to be “simple”. There’s a natural assumption that the product has little nuance in it. As Edsger Dijkstra puts it:

“Simplicity is a great virtue but it requires hard work to achieve it and education to appreciate it. And to make matters worse: complexity sells better.”

A great example of this at High Alpha is our portfolio company, Quantifi. While there is a ton of analysis and nuance in the product, with true Artificial Intelligence running in the background, the user experience is an amazing set of concise coaching insights for today’s marketer. It’s so dead simple that customers hardly believe it’s real. But it is. And this is where great design really pays dividends. It makes the experience immediately approachable. This is in direct opposition to my experience working at Salesforce, where our products were so advanced and so complicated that we would literally spend months showing demos to prospects of configuration screens in order to elucidate the potential complications our products were designed to solve.

Great products can convey the value of their products while not burdening the customer/user for extracting that value. A great example of this is Google Search. Most people would inherently understand that the technical underpinnings for indexing and sorting hundreds of billions of websites can get pretty complex, but using Google Search is incredibly simple. Just type in what you are looking for and Google figures out how to display what is relevant.

As a startup, you want to receive credit for the value of the software that you provide —especially as you attempt to serve larger, more enterprise customers. In watching what occurs with some of our companies and their enterprise customers, I often see a desire to build more and more screens. There is a natural draw to making the software seem bulkier and more sophisticated (and therefore more valuable). While this may help close deals to senior executives, it hinders the experience of the end-user. As we continue to see the end-user become the buyer, software companies need to be wary of these design decisions.

This speaks to an interesting trend with software buyers in general. Yesterday’s enterprise buyer was largely someone making a decision on behalf of a division, if not the entire company. Tomorrow’s enterprise buyer will be the end-user, buying on behalf of an individual, group or department. Companies like Slack have certainly made in-roads here. As this trend continues, I believe individual buyers will continue to prioritize great design, simplicity, and usability.

This creates an interesting balancing act for many businesses, especially young startups. We will need to figure out how to prioritize design and simplicity within their products, without sacrificing the technical complexity required to create value in today’s marketplace. Great design will continue to be the secret weapon for startups to leap frog their larger incumbent competitors.

In 2011, Eric Reis published, his now famous book, “Lean Startup” and entrepreneurs everywhere began to attempt to solve problems with the least amount of functionality possible, in an effort to prevent building things that customers didn’t want. The first output of this “lean” approach is commonly referred to as the MVP (Minimally Viable Product). We think about the MVP concept a lot at High Alpha. We’ve now built 9 new software companies in the past 3 years and the definition of an acceptable MVP has changed a lot in those 3 years. As user expectations for what software should do continue to rise, there is enormous pressure on the requirements that go into the MVP. In short, users expect more today than they did a year ago. And I believe they’ll expect more a year from now than they do today. Others are also taking notice of this trend. Our friends over at OpenView have discussed this in their 2018 SaaS trends, discussing the rise of the anti-lean product. With the market saturated with hundreds of simple products, there is sense that these type of products won’t cut it anymore.

This is a massive challenge (and opportunity) for the next wave of startups, both at High Alpha and beyond and one we will keep attempting to master as we continue to build new products and companies. Stay tuned.