There Is No MVP in AEC

There Is No MVP in AEC

I was a serial entrepreneur up until my last exit in 2011. It was a grueling end, navigating the GFC and somehow surviving long enough to exit my startup. In my mind, and for my investors, it was a failure—but compared to most, from a balanced vantage point, it was a success. After taking time off to write, What You Know About Startups - is Wrong, I went to work at Georgia Tech’s incubator ATDC (I ended up running it). They were teaching startup classes using terms like customer discovery and MVP. I had no idea what this language was or where it came from.

With a healthy attitude, I jumped in and started learning, then teaching, and then doing. It was very fascinating. It was the industrialization of startups. It was also the app economy, and a lot of startups were solving less obvious problems—and in many cases, not really solving any actual problems.

After a stint as the CEO of a robotics company and other endeavors far from AEC, I begrudgingly jumped back in. When I started Shadow Ventures, I saw a steady pipeline of entrepreneurs who were using the startup factory language: MVP, etc., etc. Many were gaining some traction, but in hindsight, most were just digitizing existing processes and not much more.

Fast forward to today. AI and robotics are now the focal point of what is happening in technology, leaving everything else in the dust. For AEC, it’s very fragmented, and solving a “customer’s” problem may be fine—but it may actually represent a very small segment. The concept of MVP may no longer apply. This is an industry of risk and large opportunities. How does an MVP not just become a feature in an industry already experiencing app fatigue? The MVP may not apply to AEC.

The shift may instead be to solve an industry or market problem, rather than a customer problem. Obviously, there needs to be a paying customer—but that customer may not be obvious.

MVPs are dead, and R&D is back. To solve a market problem, there is likely a technical problem that is holding it back. The interesting thing about large market problems is that they are easy to define but hard to solve. Think like the life sciences industry: we know there is a market for the cure for cancer—we just don’t technically know how to cure it.

And before you get mad at me for using cancer as an example, let’s not forget that the AEC industry shapes society in a way like no other. You can’t find the cure for cancer in a shed—you need a high-performance lab to do so.

My advice to EVERY startup founder is this: if you aren’t already at $5M in ARR with high growth, you may want to consider a pause and contemplate attacking a market problem vs. a customer problem. If you are an AI-as-a-feature company, especially, rethink your strategy and how to become AI-first.

I’ve always said: if you don’t know who you are going to beat, you won’t know what winning looks like. Beating an incumbent software company may be the wrong idea. Beating an entire industry may actually be more interesting—and that can’t be done with an MVP.

It could be that the bootstrap, capital-light startup is dead in AEC.