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Bill Gates’ Minimal Viable Product

Inspired by the recent post on Atari as the original Lean Startup — I thought I would point out a great anecdote about Minimal Viable Products.  So, in case you were wondering, Bill Gates knows exactly what a Minimal Viable Product is.

He started Microsoft based on one.

Via Tim Ferris and Rick Smith:

In the fall of 1973, Gates left Seattle to begin his freshman year at Harvard, part of his preprogrammed life plan. [Paul] Allen, who almost certainly could have been admitted to Harvard along with his pal, chose a different route. He wanted hands-on experience, but the two remained in close contact, often discussing the potential of one day starting a company, and at the end of Gates’s first year at Harvard, Allen moved closer to Boston so they could continue to pursue the still-vague possibilities. Then, in December of Gates’s sophomore year, the vague future began to take on a more exact face.

On a visit to Harvard, Allen stopped at a convenience store and noticed the current issue of Popular Electronics magazine. On the cover, under the title “World’s First Microcomputer Kit to Rival Commercial Models,” was a picture of the Altair 8800.

Energized as he had never been, Allen showed the magazine to Gates, and within a few days Gates had called the maker of the computer, Micro Instrumentation Telemetry Systems (MITS), and told them that he had written a BASIC computer program that could be used on the Altair.

This was a lie. Gates and Allen were just trying to gauge interest from the company.

As Brant and I write in the CustDev book, “Think of an MVP as requiring a trade of some scarce resource (time, money, attention) for the use of the product, such that the transaction demonstrates the product might be useful or even successful, i.e., viable.

In this case, Bill Gates’ MVP is a phone call.  But this story gets even better:

But MITS was deep in its own deception: the computer shown on the cover had not been developed yet, and even the prototype had been lost in shipping. Still, the magazine article had generated interest far exceeding expectations,

Dueling MVPs?!  :)

so MITS asked Gates and Allen to come in and demonstrate what they were thinking. Only then did the two set out to write the code. Gates focused on programming while Allen worked on simulating how it would work on an Altair 8800, which they didn’t have.  At the meeting eight weeks later, the program worked perfectly, and MITS arranged a deal to purchase the rights to Gates’s BASIC. Gates would later say that it was at this moment he knew the software market had been born.

This led to the development of Microsoft’s first product:  Altair BASIC.

PS  I believe this anecdote about the origins of Microsoft supports Eric Ries’ idea that:

That’s why entrepreneurship in a lean startup is really a series of MVP’s, each designed to answer a specific question (hypothesis).

demand, however, is important
to ensure you are measuring something that
matters. Think of an MVP
as requiring a trade of some
scarce resource (time, money, attention) for
the use of the product, such that the transaction
demonstrates the product might be
useful or even successful, i.e., viable. For
non-paying milestones, you must define