The MVP Trap: Why You Need a New Approach to Modernization with Joseph Misemer

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1:33All right, we got a good one for you today, folks. Today, we got Hatchworks very own Joseph Meisemer. He runs our solution consulting practice and has about 20 years experience building teams that build and deliver custom software solutions. And he's one of the few people that I give the tag of Agile Guru to. Every time I talk to him, I'm learning something new. You know, I keep the notepad handy whenever I'm chatting with Joseph. He's just a wealth of knowledge within everything Agile, everything building software in general. But welcome to the show, Joseph. Thanks for having me, Matt. Yeah, excited to start chatting with you on an interesting topic today.

2:11And today we got a bit of a hot take with a bit of a contrarian view of what most everyone in our industry holds near and dear to their hearts. And that's the beloved MVP approach to software development. You know, everyone's heard of the MVP, the minimal viable product popularized by Aircrease. It's become the sole de facto way of building software full stop. Like it's just it just is. Everybody knows the MVP. If you're talking about waterfall, you kind of get shunned out of the room. And if you try and speak against MVP, you're sure to attract an angry mob with pitchforks. But luckily, Joseph, for us today, we're in the safety of our homes.

2:52This is recorded. Nobody's coming after us after the show airs, maybe. But we're going there today. And don't get me wrong, MVPs have their place. If you're trying to test a market hypothesis, build a proof of concept, test the technical feasibility of a solution, MVPs are a great way to go. We use MVPs for those approaches when you're building something new. But you can't apply this blanket approach to everything and just assume it'll work. And this is especially true when you're modernizing or redesigning a software solution. So Joseph, take us off the top. Why does an MVP approach not work when you're modernizing software or redesigning software?

3:34Yeah, sure thing, Matt. And I want to start with a little bit of a metaphor. We're all familiar, I think, with the MVP metaphor. We're going to start with a skateboard, move to a bicycle, move to a car. And I think that's a great metaphor for MVP software development. But if we think about maybe an experience of driving a car on a highway, right? Because that's the point that you're going to be at when you finish that MVP project. Your customers have that car. They're zooming along. In Atlanta, people move pretty quickly on the highways. So let's think about what would happen if somebody already has a car that you gave them, and now you want to tell them you're going to start them back over on a skateboard with no warning on the highway.

4:17What's going to happen? They're going to be terrified, right? They're going to be zooming along at 65, 75 miles an hour, and then they're going to find themselves standing on a skateboard. And that's probably pretty dangerous, right? So we can't, if we're taking an existing solution, we can't start people over from zero. We have to meet them where they are now. And that's using your existing software. Yeah, I was going to say, that's what so many people do, right? They take this MVP approach. You hand your customer this shiny new object. It seems great, but it's not meeting the needs that they have, right?

4:48And you get some upset customers if you take that approach. Yeah, I mean, it's such a big risk. people get used to things, right? Every time, you know, Microsoft changes the location of a button or a color of a highlight, you'll have coworkers that are flipping out. You know, we all have our experiences when somebody changes the behavior of something inside our email client, right? We're so used to it. And if it gets moved, even if it's good in the long run, it's still such a shock in that intermediate phase. Yeah. And so if we're looking at MVP, building something new versus NVR, let's baseline on a few differences, a few points of difference.

5:34So kind of thinking we have this checklist of things, right? If you have an MVP, a new thing, you're testing a new solution versus NVR, you're trying to replace something existing. Primary goal of an MVP, you want to validate a market, validate a product. In VR or modernization, you want to migrate users to a new solution with little churn. User base, none on the new thing, an existing base on the existing thing. Target users, you're trying to attract new. Modernization, you want to retain existing. Competition's a whole other side of it. Are you competing with existing behaviors with a new thing or your own solution with MVP.

6:17So there's a whole litany of differences here. And that's not even getting into the workflows and the technology and the culture and all those other pieces. So there's kind of a dividing line between an MVP, something new versus modernizing something existing. Quick break in the pod. If you're listening to this podcast, chances are you've been thinking about how to actually use AI inside your business. And that's exactly why we built the AI Opportunity Finder. It's a free tool that helps you uncover high impact, tailored AI use cases based on your business, your goals, your pain points, and your industry.

6:53No fluff, no generic use cases, just real ideas that fit your business and the ranked by ROI potential. It takes about three minutes to run and it's like having your own personal AI strategist for free. If you wanna try it for free, check out the link in the show notes or go to hatchworks.com backslash AI-opportunity-finder. Yeah. And I think that that you touched briefly on it, but one of the ones that I think is really worth considering a lot is the question of whether you're starting from nothing or starting from your existing solution. Right. You may have already won over a bunch of people to doing whatever they're going to be doing on the platform that you've built for them, which is great.

7:35It's such a powerful place to begin. But you can't pretend they don't have that experience. You can't pretend they're not used to something. You can't pretend that they're not comfortable maybe with the workflows that they've built around it. And if you try to take that away without making a really strong argument in return, you're going to end up with a bunch of people who are unhappy and who might walk. Yeah, definitely. And people are attached to their existing processes, right? But let's get into the six or so principles of MVR. So there's kind of like some core tenets that really start to mold this approach and this methodology.

8:13So I'll kind of hit one. Let's hear the rationale and the details behind it. But the first one being with an NVR, you're competing against your existing product. Yeah. So, you know, we talked a little bit about this just a minute ago, but hopefully people are already using the system that you're trying to modernize. And in that case, you're not just competing against people from the outside, you're competing against your existing experience. And so there's a possibility of scaring people away. And, you know, this is a place where there's actually been a lot of study done on people's openness and willingness to accept change.

8:50And there's a couple of things that we found are really powerful drivers of maybe sticking with older experiences rather than making a switch to the new one. And one of them is something called the endowment effect. And this is where people are really almost always value what they already have more than something new that they can get. And they've got that strong grip on the current piece. And you really have to pry that out from them. And the other one is this idea of loss aversion, right? You know, we think that it might be the same. We might be just as happy if we win$5 and if we lose$5. But studies have pretty consistently shown that people feel two to four times as bad when they're encountering a negative experience than a positive experience.

9:41And this, I think, touches on one of the big risks you have to be aware of, right? You might be able to keep something, but if you give somebody a bad experience where they lose a tool they're used to, they're going to be way more upset than if you give them a new tool that they didn't have before. So this is something you really need to consider carefully when looking at your modernization plans, because that idea of loss aversion, making sure you don't take something away that people value, is way more important to your users than giving them a shiny new bobble. Yeah. And it's like that bird in the hands worth too in the bush.

10:14And it's not just like you can't supply a bad experience. You got to supply something that's better than what they have. Like something the same just isn't going to cut it. Right. It's almost a level, a higher bar when you're modernizing or redesigning something existing in a lot of ways. And, you know, you mentioned the endowment effect. It makes me think of my brother-in-law. He's got a dog, sweet dog. you know great great animal you give him his treat and he turns into this like you know Jekyll Hyde type of thing protects it he you know if you even get close to it you're losing a finger and it's the same kind of thing people are protective of what they know it's like humans are are weird animals I guess dogs are too uh but you know people are protective of what they have yeah there go ahead no I was I was just gonna say that that's something that that's that's incredibly true.

11:07And it's, it's so important to keep in mind is that the way people are going to fight to keep their workflows the same and, and not have to give, give something up when they make a change. Yeah. And so the next one, prioritize your most valuable users. I think this is a super interesting one. And it's a big kind of differing point when you think of MVP versus MBR. It's like, who are your key users you're prioritizing? Oh, yeah, because in MVP, you're not even sure. When you go in with that blank page, you're able to draw all over it. You're able to make whatever decisions you want and draw whatever conclusions you'd like because there's nobody there to tell you you're wrong.

11:49And when you're doing a modernization, you're going to have people that are valuable, whether they're the folks that are paying the most, the folks that are doing the most use, whether they're people that you're leveraging to speak for you and do word of mouth marketing. However you define it, there's going to be people that are going to be adding that extra bonus level to your user experience. And you kind of have to cater to them. I mean, don't don't bend over backwards, but you have to be particularly concerned with how they're going to react to changes. And you can't just kind of go in and assume that everyone is going to be reacting the same way and that the impact of everyone's reaction is going to be the same.

12:31Yeah. And those users that use your system the most that are driving the most revenue, and we'll get into this as another principle as well. They have some of the craziest workflows and ways of using your product too. But the example I like to think of is it's like you're building a condominium, right? Floors one through 20, exactly the same, you know, two grand in rent, they're all the same, same ceiling height, same amenities, all that. But you get to the penthouse and they're paying, let's say, I don't know,$20 ,000 a month, something crazy. And they want swimming pool. They want their own elevator.

13:10They want a helipad. They want 30-foot ceilings. They want all these crazy amenities. If you're not considering that up front, you're out of luck by the time you need to start building that penthouse and you haven't established a sound foundation before you got there. Yeah. And I think along with that, too, you can think about, well, you know, maybe people are using your system in ways you don't anticipate. And so that needs to be part of your conversation as well when you're talking to these high value users. You know, you put in a closet that you expect people to use for coats and they end up using it for some other kind of storage or something.

13:46And be prepared to respond to people finding that new exciting way to do something. You know, maybe you've got people who are used to having an elevator big enough to move a piano in. You know, you can't replace that with a tiny little elevator if you don't talk to them and find out how they're using it. And to be aware and be particularly aware of your power users, right? Because they're going to be the ones who are going to dream up ways to take full advantage of everything that you give them. Yes. Everybody picture that in your head. Your customers trying to hoist a piano up the side of a building and how pissed off that's going to make them.

14:22So just visualize that in your head when you're modernizing something in the approach you've taken. But you segue perfectly into the next one, which is understanding how customers use your product. And I think every customer or client we've engaged with, they're always surprised at how current users are using their system, that they just were not aware of. And as we're doing the research, these new interesting ways of how they use the solution become unveiled. But talk through that a bit. And also that leads to potential opportunities, right? Once you start to learn these things. 100%. And I think that's one of the things that's so great is that people use whatever tools they're given to achieve their goals.

15:06And so if we're making a tool for maybe our in-house staff to use, they're going to find the ways to do as many pieces of their job with that tool as they can. And if that means that when you're starting to talk about how to replace it, you discover that people have been using your free text fields, you know, for really weird things, or that people have been tracking assignments in ways that you hadn't ever anticipated, you both have to be prepared to support that. But it also gives you a great visibility into some of the valuable pieces you can do as part of the modernization process. You know, if people have been using a notes field to track who owns a task, maybe grant people in the future the ability to assign tasks.

15:49And that opens up a whole space of ability to drive value for your organization as you find some of those places. You know, so you can automate on top of those pieces as you as you find these other non-traditional, non-intended ways of using the software as you go forward. And then there's always the tool that will be around. I think it's like a cockroach. It's never going to die. And that's Excel. People are still, I promise you, using Excel somewhere in their process that you don't know about that you could automate and put into your solution. We've seen that a ton of times as well. Yeah. Yeah.

16:24And I think it's always informative. Every time I've worked on a modernization project, there's always been somebody that's come up to me after a discussion of a workflow and been like, I can't tell you this. Well, my manager was on the call, but here's all the steps that we do that nobody knows about. And there's always something in there that you can capture and improve upon because people are having to cut corners. And if you can give them the tool as part of that modernization, it's going to be better for everybody. Improve visibility, less opportunity for mistakes. All of those pieces come into play.

16:59But being able to have those open and honest conversations about how people are using the tool and about how people are using other tools because the current one doesn't meet their needs, those are going to drive the ability to get really, really successful modernization projects. Yeah, that's powerful. That almost gets back to the discussion we've had with Andy Silvestri on another episode where being able to get under that user experience, knowing how to ask the right questions. Like you mentioned, like when mom and dad aren't in the room, I'll tell you how this really works. Right. But it's real.

17:31I mean, people figure out the best way to use things and it may not be the instructed way to do things. and getting into the next one. So this, this segues into now identifying the most critical workflow. I think with MVP, the idea is let's keep it simple. Let's keep it end to end. Let's start with an easy workflow, modernization, redesign. You can't always go that route. Yeah. Well, and if, particularly if you've been stacking MVPs for a while, you know, you, you might've accumulated three, four, five individual pieces. But much like when we were talking about the critical users, when we started with MVP, we had a blank page, we were able to pick a path, and we were able to see if it stuck with people, and try another path and try another path.

18:16Now we've got people who have worn those tracks into the ground. And we're not going to be able to pretend that we don't know what's coming. So we need to look for those spots where people are doing those high value workflows. And hopefully, by this point, you've got an understanding of where the value is in your product. But if you can understand that and look at the things that are driving it, that's going to help you make the selection on the places where you're going to get the most bang for your buck when you're looking at going forward. And this really starts to kind of frame up your roadmap in a lot of ways.

18:49Once you identify, okay, who's our most valuable user? What's the ways of using the product? Identifying the most critical workflows. Then it starts to frame up, okay, how do we sequence this thing out? And that gets to the next principle, which is, and this actually does connect back to an MVP type of approach, but you've got to prioritize incremental enhancement over big banks. So I think that's one thing with NBR. This is not an approach saying build everything, launch it all at once and pray that it works well. That's not it. Talk us through that. Yeah, and I think it's important to recognize here we're not trying to throw away the entire idea of MVP, right?

19:35The idea of take a small slice and get people using it so you're not sitting on value continues to be in play. And you can see a lot of that as you get an understanding of your workflows. There's going to be places where you don't have to tear down and completely rebuild. Take advantage of that, right? Get people using the new technologies. If you've got customer facing and internal facing, you can make choices about where you want to do your first UI update. If you've got process pieces, you can pick a place and update a slice of the process and get yourself so that you're seeing some of that value.

20:15But I think when you look at these, too, these are all tied together. Your most critical workflow might depend on which type of user you're looking at. your incremental steps may depend on what your critical workflow is. And all of these are going to depend on, you know, who's already using your system and how it's already being used and how you're going to try to, to, to support that. So that might drive like, Oh yeah. The most important incremental enhancement is to make sure that we don't delete any functionality, but we modernize it and we get it working better. Cool. Right. That's a, that's a, that's a good informed choice that you can make sometimes.

20:52Yeah, it's almost like the way to think about it. MBR is a combination of all the MVPs required to migrate your existing customers to your new solution with minimal churn. That's kind of another way to think about it. It's like, how do you chunk this thing up in a lot of ways? And the last one being, you know, focus on improving the function, the experience and the technology. A lot of times you'll have people kind of sway too much one way or the other where it's, you know, solely it's just technology. That's all we're focusing on. let's lift and shift this thing to the cloud and not worry about anything else.

21:24Or let's focus too much on the UI, but your technology's old as dirt, right? But it's all of those things that you got to think through and prioritize when you get this opportunity to actually modernize something. Yeah. Yeah. And I think the big piece with this is we don't want to do something for no reason. Like let's understand why we're doing things. You know, we don't want to just pick up and drop something into the cloud. We better have a reason for it. It's not free to pick up something and drop it into the cloud. It's not free to completely redo our UI. It's not free to change our workflows.

21:58So let's understand. Let's make sure we understand why are we cleaning this up? Are we cleaning it up because we're finding that our team members can't do their tasks without making mistakes and we've now learned a better flow to put in place? Great. Are we finding spots where we're not collecting the right information? And so we can't do the reporting we need to be successful as a business. Awesome. Let's collect that information. Let's do a project to collect that information. Are we finding that we're not able to scale and so we're having performance issues because we have our application running on a single server in the closet in back?

22:34Awesome. Let's move to the cloud and give ourselves the ability to be responsive to our loads. But all of these are a reason, and it's making sure that we understand why we're doing it so that we're not just like, hey, I've heard of the cloud. Let's do the cloud. No, let's do it for a reason. Let's do it for a reason. And that reason is scalability or flexibility or a new technology, not just because we want to. And I think that's so important for all of these is that, you know, if we understand why we're doing something, we'll be able to position to tell our users what the value is going to be and offset that endowment effect.

23:08We're going to be able to make the right selection of which users we need to support first. We're going to be able to make the selection of which workflows we need to support first. We're going to be able to pick which incremental change we make because we know why we're doing it. And we're not just throwing a dart at the board. Yeah, exactly. And hopefully by this point, you know, you kind of jive in thinking, OK, I understand why MVP may not be the best thing for everything. I now understand the why. But Joseph, how the hell do you do this? How does this work in practice? And you hit on some of it, too.

23:40And that's one of the most important things to consider. And so I see some of our solution consultings work through this. You've got to be intentional about how you're releasing out functionality, how you're communicating it to your users. Because the last thing you want is unnecessary churn, which relates into either unhappy users or lost revenue or inefficiencies. And there's several ways you can approach this. We've got three favorite ones kind of at a high level we like to talk about. Take us through the different approaches, kind of get down to that how layer. Yeah. So when we look at it, there's kind of three ways that we can approach doing a modernization, an MVR project.

24:25And we don't always pick just one of these. These play very well together, either between or within each other. But there's kind of three approaches that we look at most often. And one of them is called the functional approach. And this basically is where we look at a function that somebody does. And we can try to upgrade one slice of your function. And we can pick another function. We can follow that all the way through. And this is maybe a spot where you've got different users. And they're very siloed in how they use the system. And if there's no overlap in how people are going to use it, we can take a look at this functional approach.

25:01We can upgrade or update the flow for all of one type and then all of another type and then all of another type. And this is great if it's super siloed. But if it's not super siloed, maybe we'll need to take a look at another approach. And there we might look at the process approach. And this is a case where maybe we're cutting across different user types, but we're able to follow a single flow all the way through and it sits by itself. And so we're able to track maybe an entire deposit flow from nose to tail. And then we can follow an entire audit flow from nose to tail. And this may have different people using the system at each step, but everyone is going to be self-contained inside that process.