Why Minimum Viable Product (MVP) so crucial for Startups?

Facebook, Twitter, Dropbox, Airbnb have something in common – These company started with a Minimum Viable product (MVP). An MVP is the foundation for many successful companies. It helps you to start the learning process. Basically, it’s an initial version of developing a complete product. It’s released in the market to test – Acceptance, Viability and to solve core problems for the targeted audience.

Why Minimum Viable Product (MVP) so crucial for StartupsHow to make MVP a real caliber one?
Many startups spend months in building and perfecting a product without testing in the market. They fail to measure product feasibility, desirability and viability among its potential audiences.

It’s similar to writing a book. Several drafts are created and continuous editing brings the best version of the book.

Below are the steps for building a successful Minimum Viable Product (MVP):

  1. Build the product
  2. Launch prototype/service
  3. Take feedback from potential customers in identifying weakness, flaws, and missing features
  4. Improvise the product keeping the user feedback in mind

Let us explain with an example which made it to the list of a successful company- Airbnb (Airbed and Breakfast) company.

Brian Chesky and Joe Gebbia couldn’t afford to pay rent of their apartment in 2007. So to make their living, they decided to convert the loft into lodging space. The core values were cheap accommodation and a little more personal space. They made a simple website and uploaded the pictures of the room. They used their own apartment to test their MVP or core values. They successfully completed their test as 3 people applied for rent and become a customer. They did further market research by discussing with people to understand what they want. Thus they started pursuing their idea to make it better and bigger.

MVPs are created to test the demand and not to test too many features of the product. Test core values and check if users got the value right. The goal of MVP is not to get the product right at the first go. Basically, the motive is maximizing the learning with minimal efforts.

To increase chances of success, follow the below points:

Define your market clearly
Avoid generic idea or concentrate on a market which is facing some disadvantages with its existing offerings.

Scalability options
Your target market shouldn’t be too narrow. You should be able to reach to mass or specifically focused groups who require consistent service.

Create a compelling choice for your product
Compare your product with competitors offering. Check what makes your product unique and appealing to the customers. How your product benefit can draw audience attention toward yourself?

Create a better deal
Any buyer will compare price and benefit. People don’t buy if it’s unaffordable. So offer a competing price. You should consider that company is able to deliver profit with the competing price.  Genuinely lowering the price for product acceptance can make the company go into losses.

Focus on Market need
A product is created with many assumptions. It’s important to test assumptions and create a product that market needs. Many times, a great product fails. Design the product to make it an integral part of your customer‘s daily life and not just nice to have a solution.

Minimum Viable Product (MVP) is a not a product by itself but more of proof of concept. There is a difference between what we think will work in the market and the actual market demands. MVP is not something that is built once and the job is done. It’s a gradual process that can be repeated over again to make a worthy product.

Contact us if you are looking for support to develop your minimum viable product.

Minimum Viable Product or MVP or Prototype of a Product – Key Characteristics

Minimum Viable Product or MVP is a prototype of a product or a service developed and released in order to evaluate the customers’ response and test the product hypothesis without investing a lot of resources in its construction and implementation. This product is limited in features, and is built quickly enough to be deployed as a product which is ready for customers’ interaction.

Minimum Viable Product or MVP or Prototype of a Product - Key Characteristics
Minimum Viable Product or MVP or Prototype of a Product

The development of MVP in to a full-fledged product solely depends on the customer feedback, actual usage scenario results and validation of the general hypothesis, so it could either be entirely discarded, tried again with some new added features and modifications or could be finally accepted as a model for a new actual product design, so actual development of the product could begin. This strategy of deploying MVPs is mainly implemented by individuals or organizations, who seek to minimize the risks i.e. if by any chance the product fails, their hypothesis is proven wrong or unprofitable and the company faces huge capital losses.

Some of the key characteristics of using MVP strategy are:

  • It is built using minimum resources so it has enough value that people would be willing to use it or buy it. Mainly the company initially uses a freemium version for a MVP.
  • It shows enough future potential to retain early customers, even attract the future customers.
  • It provides a feedback loop to guide future development, so developers would know how to proceed with their ideas and have a clear vision to build what is actually required.
  • The main idea of this development strategy is that early customers can see the promise the final product has and so they provide the valuable feedback for its development, this increases the customer trust.
  • This also shows that technically orientated products used by technical users may be most appropriate for this type of development technique, as it all comes down to convenience of the product and if the product delivers the task they need.
  • Using this strategy we can also create bases for other products as user feedback, can vary and can show us new ideas, which can’t be featured into the existing product, but could give a way for another product.
  • Using MVPs we can minimize the resources needed in marketing of the future product, as the MVPs can gather a lot of customers and attract them towards the full featured final product, hence it also acts as a form of marketing.

The term “Minimum Viable Product” was first used and defined by Frank Robinson (entrepreneur and economist) which was further popularized by Eric Ries (entrepreneur and author) and Steve blank (entrepreneur and academician). Since then the strategy of using MVPs has become successful and it keeps on evolving with new ideas, it has made the survey strategies implemented by organizations redundant, as it has proven to be misleading many times. MVPs have also become the startup strategies by many successful entrepreneurs and some of the key companies who followed this strategy are Twitter, Dropbox, Airbnb, Zappos, buffer and Groupon.

Contact us if you are looking for support to develop minimum viable product.