Why Your Next MVP Should Be a Physical Good

There’s no doubt that the past decade or so has been a historic era for small, web-based entrepreneurs. Companies shoring up the stock market started out as simple web apps, and a horde of others found previously unprecedented success.

What this means for today’s entrepreneur is just as exciting: The pattern is happening again. But instead of intangible software, tangible goods are set to boom.

How did it all begin — and how will it happen again? The key concept is technological democratization.

Prior to the most recent surge of internet technology, creating a company serving millions of customers required serious resources: server farms, a large employee base, and a great deal of tech overhead to deploy and maintain it all. Often, the development was entirely in-house and nothing like plug-and-play. Everything had to be built from the bottom up.

But all that changed quickly. Tools like AJAX and Ruby on Rails lowered the barrier of entry for web applications, and platforms like Amazon Web Services or WordPress meant all the off-site concerns were theirs — not the little guy’s. So for a few years at least, web-based businesses could focus on growing their customer bases and raking in profits.

That got harder, though, as the same democratization that lowered the barrier to entry began to limit the viable marketplace. Now, because almost anyone could jump in with at least simple web apps, the competition for those limited offerings became overwhelming, and it was harder to make a profit.

Naturally, those that remained attempted to compete with the bigger companies, which offered more sophisticated user experiences. But doing that required far more resources. It was costly, and many of the smaller startups were unable to compete. In the end, the process has reached something more like equilibrium.

The Torrent of Tangible Goods

But this doesn’t mean the first part of this pattern — the gold rush — can’t repeat itself in another domain. I’ve felt an unmistakable atmosphere of excitement from many physical product entrepreneurs here on the East Coast. It’s clear that the same democratization is opening up a compelling channel for success, and it’s happening at every stage of the process.

Take prototyping. Everything starts with an idea, but for an idea to truly become a product, it must at some point start life as a prototype. In the past, getting a prototype made for even a simple product was not cheap, and it limited smaller startups right from the beginning. But now, with 3D printing, prototypes can often be created cheaply and easily in your garage — even in ways that allow for experimentation.

Manufacturing and storing the product was traditionally the most expensive and complicated proposition. Concerns like leasing factory space and assembling an R&D team were just part of the old game. That, too, has benefited from the new ecosystem of tech-savvy providers; Alibaba has revolutionized the production of goods, essentially allowing anyone with an idea to jump into the marketplace.

Finally, there’s advertising. Without that, even the most efficiently crafted goods will just linger on a shelf. Until recently, if you wanted to compete with other manufacturers nationally, huge outlays of cash (think Super Bowl commercials) were a necessary part of business. Now, with just a $50 Facebook ad, you can reach your market — and in a better-targeted way.

Put it all together, and you get today’s new success stories like Casper in the mattress space and Harry’s for razors. But this is only the tip of a disruptive iceberg for almost any product that you can find in the shopping aisles.

Avoiding Disaster Through Differentiation

Getting your company on this wave starts with a basic question: “How do we differentiate our product?” That is based on carving out a robust client relationship from the start, because the messaging you transmit to customers shapes their perceptions. This alone can distinguish your offering from others in the field, as we found in the early days at Barkbox.

Companies are catching on to this point, realizing that a new standard in customer service is a crucial factor in maintaining those advantages. Technology can assist the process, such as with customer lists that feed into targeted audience advertising strategies on Facebook.

Of course, a web browser is how customers find you in the first place, so it’s important to consider your strategy. For instance, is there a way your product can be earlier in the decision-making process for customers? That’s critical, because once consumers begin searching for general products in your space, many will be lost to competition, particularly on Amazon or Google.

But those and other giant platforms — such as YouTube, Instagram, Snapchat, and Facebook — also have positive roles to play for a physical goods startup. They provide wide coverage for your web presence, which is great for product search but doesn’t preclude you from having your own direct sales channel. So a dispersed strategy of these services — in conjunction with your own site — seems like the winning combination.

The good news is that, however you get your product out in front of buyers, people today are putting their trust in the web as a shopping portal. It used to be unheard of to purchase a mattress without at least lying on it in a showroom. But now it’s considered commonplace to buy a $700 mattress without ever having even seen it in person, let alone tested it.

That same trust in the web-buying process is fueling a revolution in how people buy physical goods. While brick-and-mortar retailers are feeling the pinch — and many have been driven out of the market — web retailers are rejoicing.

Because all these factors are common to anyone competing in the tangible goods marketplace, smart founders have to find ways to stay relevant and give their companies every chance for long-term viability.

My advice? Never forget your company’s story. Customers don’t just buy razors from Harry’s because they’re cheap — even though bypassing retail stores allows for exactly those savings. Customers buy the products just as much because they resonate with the lifestyle those companies are championing, the compelling obsession of the founder, the hip attitude of the project, or other intangible factors like great service. That’s the story, and it makes all the difference.

Keep in mind that stories go along with companies, not just their products. Google started off as just a search engine but grew in organic ways, given its story of innovation, connection, and rapid access to information. Maps, email, video, geography, finance, and other data all fell under its winning story. That same approach works for tangible goods startups, whether in personal grooming, food and beverage, gadgets, pet needs, or any other domain.

Now’s the time to take advantage of all these tailwinds and take your tangible goods startup to the next level. The next few years should see a growing revolution in this area, and the smart money is on those who can take advantage of this trend. Know your story, leverage the web tech, and jump in!