I'm not certain where I first ran across the concept of a "Minimum Functional Unit", it was probably is a software engineering book or maybe in a biology blog. Basically, the concept for a business refers to the simplest revenue producing activity that may be sustained in a given market space.
Wherever it initially came from, I have certainly jumped on the bandwagon, at least as it relates to start-ups.
You ask, "Why is it such a great concept for start-ups?" Because most entepreneurs have ADD. Most are creative, go-getters with an abundance of energy. Unfortunately, many have a really nasty habit of starting projects, getting a feel for the major issues, then getting bored or distracted by some new project.
Getting distracted and losing focus for a start-up can mean death because there isn't enough time or money to get everything done anyway, so success depends on focusing all available resources on the highest impact activities.
Additionally, focusing on a core activity and doing it great simplifies almost everything else.
Once that minimum functional unit is operational, the goal is to continue systematizing and perfecting the unit, it is also time to consider scaling the business, which is where a small business starts toward becoming a big business.
