Minimal Referable Product

Since Eric Ries coined the term “Minimum Viable Product” in 2011, it’s been a popular concept in the startup world. The idea is that you build something that is just good enough to get feedback from real users and avoid building something that no one wants.

The concept is sexy and simple. Build something, get feedback. Keep doing over and over again. I absolutely agree that establishing a feedback cycle with customers and potential customers is one of the most important things you can do as a founder.

Just know that there’s no standard metric for “viability” out there. You’re shining a light and looking for the path. If you’re not sure on what to build, this is a great place to start.

But, once you start looking for more concrete validation, you need to go a step and measure signs of commitment from your customers.

Building the Minimal Referable Product

There’s three ways that I like to measure commitment: retention rates, purchases, and referrals. Each of them give us the cold hard facts that tell us if we’re going to be successful or not.

Not keeping new users? Better find a different audience or figure out what you should be building for the audience you’ve found.

Not getting any purchases? Better turn off those CPA ads on TikTok.

But, the highest signal of all is referrals. If you’re getting referrals, then people are willing to use their reputation to vouch for your product. Referrals are the ultimate flywheel for organic growth.

Where do we start?

Let’s take a look back at the idea of the MVP. We’re talking about minimal functionality and quick iterations. For our MRP, we’re just taking it a step further and asking people to tell their friends about our minimally viable product. It’s not a completely different methodology at this stage.

Luckily, there’s a few services that can help out with this. A quick search will give you a few potential solutions, but we’ll focus on one in particular: Viral Loops.

Viral Loops has done a great job at packaging up some of the tried and tested method for getting referrals. If you’re building a newsletter or looking for attention, they have an out of the box solution. Not sponsored, just using this as an example so you know of at least one decent option out there.

Easy peasy, you have a basic referral program for your app.

Great, more people are coming in! But how does this help me get better feedback?

You’re going to take your referred users and compare their behavior to the non-referred users.

If I tell you about a great band, it’s because we have similar tastes in music and I think you’ll like the band. So, what’s the first song a referred user would listen to? I bet that song is the favorite song of the person that referred them.

To get this data from our product, we need to be tracking user behavior somehow. I’d suggest plugging in Mixpanel to your app and just using generic screen tracking. It should be granular enough without requiring a ton of work as long as you’re not cramming a bunch of different features into one screen (hopefully not yet since we’re talking about minimal products).

Once you can track which screens or features people are using, you’ll want to set up three different reports.

• Compare the most used features between the referred users and non-referred users. If they’re different, then you need to make sure that the people that haven’t yet referred anyone know about the great features that the referred users are using. If you’re not seeing any difference, try looking at the data by referral source, location, or device. There’s a good chance that there’s some type of insight hidden in between the pivots.

• Single out the referrers that are inviting users that have high retention rates. Those people are the highest signal users you could find. Not only do they know people that might want to use the app, they’ve been able to find the ones that love our product, too. Do whatever you can to make them feel special (swag, discounts, more referrals, advice, retweets on their product, etc.) and build a marketing persona around their behavior in and out of the app.

• Flag the people that are gaming your referral systems. These people might be great users, but the people they’ve referred most likely have no connection to them, especially if there’s some type of incentive involved. Linking your referral system to your in-app analytics might take a little bit of work, but you’ll want to be sure that you’re able to ignore them in your reports. The goal isn’t to get the most referrals, it’s to get the most valuable referrals. The caveat to this advice is that you shouldn’t need to do this unless you’ve got a bunch of referrals or you’re seeing weird patterns of behavior in your referrals. If you’re seeing a high percentage of bad referrals, I’d guess you are over-incentivizing your users and need to dial it back.

And then what?

Because you now understand the impact referrals can have and know a few things to look for, you’re going to get a much more honest picture of what’s working and what’s not.

Unfortunately, when you ask people for feedback, they’ll tell you what you want to hear or just say everything is great. But if they refer people to your product, give you money, or stick around for a while, you’re know that they’re the real deal and you should do everything you can to take in their feedback.

Building the MRP is basically the same as the MVP, except you’ve prioritized implementing a referral program and tracking user behavior. Also, you’ve made an implicit decision to put in the time to analyze the data you’ve collected.

If you’re still not yet sure on what you’re working on, then stick to the MVP and collecting whatever feedback you can. The biggest risk for early stage products is worth an entire write up: don’t over analyze. You’re looking for major discrepancies or trends that are obvious. All you need to figure out is your next step.