Learn how to avoid product development risks in the zero-to-one phase.
The zero-to-one phase of product development, where an idea turns into a functional minimum viable product (MVP), is filled with uncertainties. This is the stage where startups must make quick yet precise decisions to ensure that development does not become a waste of time and money.
The big challenge is finding the balance between validation and execution. How much time should be spent researching the market before starting to build? How can you avoid the common mistakes that lead to failure even before launch?
In this blog post, we will explore strategies to mitigate risks and delve into the key principles of The Lean Startup by Eric Ries and Customer Development by Steve Blank to help you make better decisions for your business.
Risks are not enemies, if you know how to control them
Every aspect of a startup’s early journey—from market assumptions to product decisions and execution strategy—comes with inherent risks. Minimizing these risks means continuously refining assumptions, iterating based on concrete insights, and strategically using available capital to move towards a viable product.
According to Customer Development by Steve Blank, startups should not assume they already know what customers need. Instead, they must engage in continuous discovery, collecting feedback from the start. Meanwhile, Eric Ries’ Lean Startup methodology emphasizes Build-Measure-Learn cycles, prioritizing iterative validation over large upfront development investments.
One of the biggest challenges for startups is determining how much validation is needed before committing to building an MVP. While in-depth research can provide valuable insights, launching a low-cost MVP is often the most effective way to learn quickly by testing real user behavior instead of relying solely on interviews or assumptions.
The decision to continue researching or proceed with development largely depends on the cost of creating and iterating the MVP. When development costs are low, launching a simple version earlier can provide more meaningful insights than prolonged research.
Building an internal team or outsourcing?
This is one of the most critical decisions for startups in the zero-to-one phase. Each approach has its advantages and challenges, and the right choice can determine the speed, efficiency, and sustainability of your MVP.
Option 1: Building with an Internal Team
Startups that form an in-house team from the beginning can benefit from:
- Cultural alignment, as employees develop a deep understanding of the company’s mission and take ownership of its success.
- More efficient communication, since team members collaborate directly.
- Continuity in product development, with team members acquiring domain expertise that supports future iterations.
However, this approach also presents challenges:
- High fixed costs, including salaries, benefits, and operational expenses, even when the product direction is still unclear.
- Lengthy hiring process, as recruiting specialists such as engineers, product managers, and designers can take months.
- Risk of misalignment, where research-driven strategy shifts may require restructuring the internal team, which can be slow and costly.
With a limited budget, an internal team can quickly consume available resources before the MVP is tested in the market, increasing the likelihood of running out of capital before gaining traction.
Option 2: Partnering with a Product Studio
A viable alternative for early-stage startups is working with a product studio, which provides on-demand expertise in research, design, development, and product management. The key advantages include:
- Efficient validation, incorporating user interviews, prototype testing, and early validation to ensure resources are effectively allocated.
- Flexible costs, avoiding the need for a fixed payroll and ensuring capital is used efficiently.
- Accelerated development cycles, using proven methodologies to move from concept to MVP quickly.
- Real-time collaboration, operating in nearby time zones for smoother communication and iterative development.
- Dynamic adaptability, allowing startups to shift focus as new insights emerge, without the restructuring challenges of an internal team.
A particularly important consideration is whether the MVP is inexpensive to build and iterate on. In some cases, launching a simple version may be a more effective way to test assumptions than relying solely on research. Practical experimentation enables direct validation with real users instead of depending only on theoretical models.
From Product Studio to in-house: the green light for transition
While the product studio model helps mitigate initial risks, there comes a time when an in-house team may be the best choice. Signs that transitioning to an internal team is necessary include:
- Achieving early traction, where the MVP has validated demand and hiring a dedicated team becomes more relevant.
- A well-defined product direction, making internal ownership of development more feasible.
- Long-term operational goals, as startups aiming to scale will eventually need a dedicated in-house team.
A hybrid approach, leveraging product studio expertise initially and gradually building an in-house team, allows startups to maximize flexibility while ensuring long-term stability.
The Path to Safe and Sustainable Product Development
Startups need to balance research, execution, and financial sustainability. There is no one-size-fits-all model, but understanding the cost of learning—whether through research or an MVP—leads to more strategic decision-making.
Working with a product studio offers clear benefits in the early stages, including on-demand expertise, lower fixed costs, and faster validation cycles. However, as the product matures, investing in an internal team may become essential to ensure continuity and sustainable growth.
By making calculated decisions at each stage, startups can minimize risks, optimize investments, and increase their chances of successfully bringing a validated product to market.
Is your startup ready to reduce risks and build a solid MVP?
Talk to our experts and find out how to prepare for the next step!
