The “Concierge MVP” – An Example: GoodApril’s Tax Checkup

8 Jan

Do you want to know if customers really want what you’re building? Try selling it to them before you’ve built it, and you’ll know for sure. That’s the idea behind the “Concierge MVP” or “Wizard of Oz MVP.” Unlike a simple “Click Test,” however, you actually deliver the value you’re promising to your customer, just not in the way you intend to when you build your full-scale software solution.

It’s one of the most powerful ways I’ve learned to test a product hypothesis and gain real customer insights quickly. I’ve used it in startups, like GoodApril, and even at a big company like TurboTax.

I’ll share two specific examples to help you learn how to create your own Concierge MVP test. You can also check out other examples of MVPs.

Background: What is a Concierge MVP?

An MVP is a “Minimum Viable Product”. It’s a fundamental concept in Product Management and software development. Build only the bare essential elements of a solution, otherwise you’re likely wasting development effort or worse, making your product harder to use by overloading it with functionality. There are two flavors of Concierge MVP:

Example of Wizard of Oz MVP: The GoodApril Tax Checkup

Wouldn’t it be amazing if your tax software would tell you if you could be paying less in taxes, or warn you if you were going to owe the IRS next April? My Co-Founder and I were pretty sure it was possible to build, and that people would pay for it if we could, but before we tried to raise investment in our startup, GoodApril, we needed to be sure. So we built a test to find out: The Tax Checkup.

The thesis behind the Tax Checkup was that if people actually cared about finding ways to pay less in taxes, they would be willing to pay to find out how. Rather than actually charge users, our currency would be asking them to provide us with a copy of their most sensitive financial document: their tax return. Not charging money also allowed us to avoid building any payments tools, a big time savings since we were just a two-man startup at the time.

Here’s how it worked: We generated some traffic to our site using traditional Growth Hacking approaches. One example was that I would find tax questions people asked on Quora, and link to our website in my answer as a way to find other savings tips. Our website:

mvp-home-cropped

Testing the value we would deliver: save money on your taxes

We would then lead them through a short online process of creating an account (so they could login and securely see their report later), and then uploading their tax return. To get users to create an account, we provided a quick demonstration the kind of analysis we could provide using three simple questions.

mvp-signup-complete-cropped

Providing value before asking for an email address or tax return

After someone had created an account, we asked for their tax return. While we did say that it could take up to 48 hours to get your report back, we never implied GoodApril wasn’t a fully software-based solution.

mvp-upload-cropped

Asking for a user’s tax return

And that’s where the software stopped, and the people began.

Since we wanted to make sure it would actually be possible to build repeatable tax advice with software, we went ahead and built the logic and UI around a few savings opportunities for the Tax Checkup. We didn’t, however, invest in building the OCR technology that would be necessary to actually extract the data from the user’s tax return, to generate their report, or any kind of transactional email system notifying people when their reports were ready. That’s where the “Concierge” part really came in: my co-founder and I would read the necessary input values from the customer’s tax return, manually input it into our internal analysis tool, publish the report, and then email them that the report was ready. The user could then login and see the report we generated for them:

GoodApril Tax Checkup - Cropped.jpg

The GoodApril Tax Checkup – Example for a family earning $306K

Each report took us almost 10 minutes to generate, and that was only after we got into the rhythm of it. We were OK with that, however, because spending a few hours of manual work allowed us to launch many weeks earlier than we could have otherwise.

We ran the Tax Checkup for a few weeks, and received hundreds of tax returns. We shut it down once we felt we had the evidence we needed to prove to ourselves and to investors that there was real demand for the kind of service GoodApril would ultimately offer.

So, a quick summary of why this Concierge MVP test was so helpful for us:

  • It helped us prove demand for tax advice without building a fully functional site
  • It allowed us to test demand much faster than we could have otherwise
  • We gathered evidence of customer demand using real customer behavior (sign ups and uploads of tax returns), not just self-reported interest from a survey or interviews
  • We learned some of the challenges in building the ultimate solution we aimed to provide: for instance, how a tax return alone didn’t give us as much information as we needed to give many kinds of advice
  • We learned what it would take to acquire customers. Our growth hacking helped us drive a few thousand visitors to our site, and we got to start testing approaches to see what would work for us down the road

Do you have examples of how you’ve built a Concierge MVP to test a new software offering before launch? I’d love to learn about it!

 

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One Response to “The “Concierge MVP” – An Example: GoodApril’s Tax Checkup”

Trackbacks/Pingbacks

  1. Another “Concierge MVP” Example, from TurboTax | Mitchapalooza - January 17, 2017

    […] GoodApril Tax Checkup was actually a form of “Wizard of Oz” MVP, where the user didn’t know that my […]

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