Bring clarity to your core value proposition and reduce risk with a minimum viable product
Last Update: 10 Sep 2021
If you want to join the startup race, it’s not enough just to have a new idea. You also have to prove that your idea works and that it delivers value to your target market. Once you’re over that hurdle, people should be ready to reach into their pockets. The concept of the minimum viable product comes from the lean startup methodology, which follows the belief that entrepreneurs should develop business models and products iteratively to reduce risk and minimize unnecessary spending.
In this introductory guide, we’ll explain:
•What a minimum viable product is
•What the benefits MVPs are
•What types of MVP there are
•How to build your first MVP
Every startup and product team has a slightly different definition of what constitutes a minimum viable product (MVP). For some, it’s the first working version of a product, offering just enough functionality to be useful to the customer and for the developers to gather valuable feedback. For others, an MVP might simply be a product demonstration or even just a description.
Regardless of which type of MVP you choose to launch your startup with, the concept is the same. An MVP must carry enough value to validate the reason for its existence. In other words, it should deliver upon the core purpose of the product in the simplest possible way. That way, you can identify a market fit, while early adopters can provide valuable feedback.
Building an MVP is all about learning. More specifically, it’s part of a methodology that revolves around iterative testing, validation, and improvement. It answers the key questions of whether your solution is something your target market wants or needs, and whether they’ll be willing to pay for it. After all, there’s no point sinking money into something if you don’t have a positive answer to those two questions.
Reduce your startup costs
Every startup venture carries a degree of risk, but starting with an MVP can drastically reduce risk by keeping costs to a minimum. By contrast, investing in the development of a full-featured product before it has even been validated in the market, is an enormous and expensive risk. It’s much quicker, easier, and cheaper to test the market first, before going headlong into full-scale development.
Validate your business idea
MVPs are all about learning from the people who matter most – your intended customers. With an MVP, you gain access to validated learning in less time and for less money. You learn what your customers truly want, instead of what you think they want. To that end, many companies consider the MVP to be the first stage of a continuous feedback loop that progressively reveals deeper insights into what customers want.
Focus on core functionality
An MVP is strictly goal-driven, with a singular focus on your vision. The minimalistic nature of an MVP helps you maintain a clear focus on core functionality, rather than risk going off on a tangent before achieving validation. After all, customers normally prefer product developers to fix and perfect what they have, before they start adding new features and functions. With such a high degree of focus, everything you do is driven by your value proposition alone.
Developing an MVP is the first stage of an iterative process driven by a continuous feedback loop. In other words, you improve your product in increments, based on feedback from your target audience. This helps you reduce the need for rework and instead fine-tune your product based on what people want and expect from it. This also means that any setbacks are normally easier and faster to remediate.
Leave room to grow
MVPs can greatly reduce the margin for error, but that doesn’t mean they can’t adapt or grow. On the contrary, you can add new features and functions based on the recommendations of your intended audience. The feedback you receive will provide the insights you need to update and continuously improve your product and even your business model itself. It’s about creating a culture of continuous improvement and long-term sustainability.
MVPs fall into two main categories – low-fidelity and high-fidelity. Which one will work best for your startup depends on the nature of your product and how far along your journey you are. If you’re just starting out, then a low-fidelity MVP is cheaper, easier, and less risky.
Low-fidelity MVPs revolve around the early stages of market research, and they don’t involve actually creating a usable product. By contrast, high-fidelity MVPs assume a higher degree of risk, because they involve things like working prototypes and hands-on demonstrations.
A product demonstration might be something as simple as a hand-drawn user experience map in the case of software development, or a short explainer video covering the proposed features and benefits of your product. You can publish these low-fidelity MVPs on forums, blogs, social platforms, or even on a dedicated landing page.
Crowdfunding is something of a cross between a low- and high-fidelity MVP. You might have a very early prototype of your product, or nothing more than a demonstration video and a few graphics and descriptions to illustrate your concept. However, this method allows you to raise funds for creating your product, while also testing demand.
Digital prototypes take a more thorough approach towards demonstrating your product in real-world use cases. They also vary greatly when it comes to complexity. For example, you might create a digital twin, which is a complete digital replica of a physical object. Alternatively, it might be something as simple as a wireframe or a basic 3D model.
Wizard of Oz
A Wizard of Oz MVP is similar to a digital prototype, but with one important difference. It gives the impression of a real working product, thus providing valuable insights into user experience. It’s similar to a concierge MVP, where product teams rely on manual processes to demonstrate a concept and better understand the solution.
Single use case
Launching a single-featured MVP is perhaps the most popular high-fidelity option in the world of software development. With this approach, the developer launches a very simple product that delivers value by solving a specific problem. It’s far more cost-effective than building full-featured products that have yet to be tested for demand.
How to build your MVP
While people usually associate MVPs with the technology sector, they can work in almost any industry. In fact, the best way to start validating your idea is often with an approach that doesn’t involve any tech at all. After all, some of the most successful companies began life as nothing more than an illustration on a napkin!
Here’s a broad overview of the MVP process:
Start with market research
Developing an MVP is all about delivering value, and that’s something you must keep in mind from the outset. It’s impossible to know what your future customers want if you haven’t carried out some basic market research first.
There’s no need to delve deep into things like pricing structure and infrastructure development at this stage, but you should have a reasonable idea of your target customer. Assuming you only have a vague idea of what your actual product will be at this point, you should think about who it might help, and create a customer persona. This is a profile of a hypothetical customer that details any attributes that might be relevant, such as demographical information and the pain points or challenges they face. You might have more than one customer persona if your product is likely to have a broad reach.
Define your unique value proposition
Armed with your customer personas, it’s time to look towards the solution you ultimately want to achieve. This will be your unique value proposition (UVP), which is what will set you apart from your competitors and give people a reason to buy from you.
Now comes the time to identify your use cases. For this, we can take a cue from the software development sector, where product teams often write down user stories. These are short and simple descriptions, typically detailing the who, the what, and the why of your product from the perspective of the customer. It’s a methodical way to guide you towards developing an MVP that will resonate with your target audience. Here’s an example of a user story:
“As a teacher, I want to be able to understand my students’ progress, so I can better report their successes and failures.”
As you can see, the above example illustrates the target customer’s role, what they want to be able to do with a given product, and why.
Creating these user stories and use cases will help you firmly establish your startup objectives. Your MVP should align with these goals to ensure you stay on focus and avoid wasting your resources on unimportant matters. You can then distill that vision down into individual features and functions, which you’ll need to prioritize for creating your first MVP.
Develop your plan of action
Now that you’ve determined your priorities and settled on a limited core functionality for your product, it’s time to translate it into a plan of action and milestones. You might start with a low-fidelity MVP, such as a sketch-up detailing how your customers would interact with the product and use it to solve their problems.
After gaining some initial feedback on your concept, you’ll be ready to refine your offer by developing a working prototype. After that, it’s largely a matter of continuous improvement by repeatedly refining your offer based on each feedback loop and introducing new features and functions as necessary.
Developing an MVP is one of the safest ways to launch a startup, especially in today’s highly competitive market, where customers tend to be fickle and driven by the latest trends. It’s also much more suitable in fast-moving industries, where there’s a great need to innovate quickly and capitalize on every window of opportunity. Many world-famous companies, such as Uber, Airbnb, and Dropbox, have done just that.
That being said, an MVP isn’t the best approach for absolutely every startup. In particular, an MVP might be poorly suited to situations where there’s already a strong customer base with established competition, proven demand, and clear expectations. For example, let’s say you want to create a better version of an existing product. They key word here is better, which doesn’t quite fit with the concept of minimal.
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