How Starbucks, Nike and Apple build low-cost test products

For Successful Innovation, Sell Imperfect Products

Read Larry Popelka’s new Bloomberg BusinessWeek article on MVP Test Products:

How Companies use Early Stage Test Products for Better Innovation
If you had tasted the very first PowerBar, you probably would have gagged.

It was a chewy, tasteless mass of goo: barley malt, nuts, brown rice, molasses, and nutrients blended into a taffy-like bar, packed in a metallic wrapper with a crude logo.

Created by Brian Maxwell in 1986 for a few thousand dollars, PowerBar received mixed initial results. Serious athletes liked it because it met an important need—quick energy during competition—but the taste and consistency needed work.

Maxwell knew his product wasn’t optimal. But by getting feedback on an early version, he was able to modify it, changing the package and marketing strategy to build a following among athletes and weekend warriors. PowerBar eventually became a $150 million business, creating the $1 billion energy bar category. In 2000, Nestlé (NESN:VX) bought the brand for about $350 million.

Maxwell’s approach of purposely launching an imperfect product has been adopted by many well-heeled organizations recently as a new innovation tactic. Rather than making big upfront research and development investments in new ideas, these companies instead start with an MVP, or minimum viable product, a term coined by Eric Ries, author of The Lean Startup.

The concept behind the MVP is to find the fastest, most cost-effective way to build a salable product that delivers on your basic idea and induces a reaction from prospective buyers. Even if many don’t buy, this approach generates specific feedback on individual features, providing a blueprint for the ultimate design…