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An MVP (Minimum Viable Product) is the earliest version of a product, which only has the functions necessary for conveying its fundamental values to an audience and for testing them on its first users.
The main purpose of an MVP is that the company has produced a real product which it can then take to market. It can consist of a one-page site or a seemingly fully automated service that is actually done manually. The developers observe the behavior of people using the service for the first time. Based on the information obtained during the experiment, the team then continues, corrects or cancels further work on the product.
The picture above demonstrates the essence of the MVP: instead of spending a lot of time, effort, and money on developing a conceptual product, one can release a minimal version of the project, have fun, get feedback, release an improvement, have more fun, get more feedback, and ultimately end up with a viable product.
An MVP has all the basic features you need to implement your idea and retain your first followers. The product must be of sufficient value to users.
The key idea behind the MVP is that you create a real product that can be offered to customers. And then you observe their reaction to it and refine the solution by adjusting to the preferences of consumers.
The main goal of an MVP is to reduce the time and effort spent on testing an idea before developing a full-fledged product.
A minimum viable product allows you to:
- Test a hypothesis based on real data and prove the viability of an idea.
- Reduce the possibility of financial losses when launching an unsuccessful product.
- Reduce development costs by eliminating unnecessary functions.
- Identify customer needs which were previously unaccounted for.
- Optimize product testing and expedite the search for errors.
- Build an initial customer base before a full-scale launch.
- Enter the market and attract investors.
Why is an MVP important for successful business development?
1. Saving finances and time. You initially develop a minimally viable product, not the well-polished final version, which means you save time, money, resources, and most importantly - a headache.
2. It allows you to "probe" the market and figure out what flaws there are in marketing strategy, market reaction to a product or service, and all possible technical errors (bugs).
3. My MVP - your MVP - is a quick interaction with your target demographic. You can start talking about your product or service, use digital channels of communication and advertising, and participate in exhibitions. You can receive feedback from the client and find out what they really want and how to give it to him.
4. Investors. Once you have a workable MVP product, it will be much easier to get decent funding from “angel-investors”. Investors don’t want to invest in a “great idea”. They want to see a ready-made MVP. Statistics from the past 10 years have shown that a huge percentage of failed startups received billions in investment dollars for projects that never even got off the ground.
5. Correction of errors. The ability to quickly fix bugs, work out all the pitfalls that arose during development of the MVP while accounting for the customers’ desires = a victorious startup.
Richard Branson started his entire business with just one plane flying just one route. And it wasn’t because he didn’t have the money to do more, but because it allowed Branson to work out his business hypotheses and tighten them up. The number of aircraft grew exclusively with the growth of the business and the successful testing of all hypotheses.
Types of MVPs:
1. The Flintstone MVP
The Flintstone approach entails simulating the presence of functionality while not actually having it technically implemented in any way. The MVP aims to test a hypothesis and to prove the viability of a chosen business development model.
Nick Swinmurn, the founder of Zappos, has proven that this strategy works. At the very beginning, he did not spend a single dollar on buying shoes or renting a warehouse. He simply posted pictures of shoes on his website. As soon as shoppers started ordering shoes, he went to the store, bought the right pair, and shipped them. Realizing that the project was viable, he updated the site's functionality.
2. The Concierge MVP
This methodology is more suitable for online services whose ultimate goal is to automate the resolution of the target audience’s problems. In the initial stages of product implementation, the service is provided manually.
Entrepreneurs who choose Concierge MVPs also provide hands-on services. But in this case, the client knows that a real person is behind the provided service. Wealthfront, a financial planning and investment service, started as a Concierge MVP. Wealthfront employees spoke directly with clients who needed help with wealth management. An important difference between the Concierge MVP and the Flintstone MVP is that Concierge is aimed at generating ideas about the future of the product, providing a service and communicating with the client.
3. The Fragmented MVP
The idea of a fragmented MVP is to convey the value of using existing tools instead of creating a unique solution. The product prototype looks like a complex product. You can use simple software, put it all together, and add the functionality you need after receiving feedback.
Groupon is a great example of a fragmented MVP. It was once a simple Wordpress site where all interactions with users were done via email. Only after receiving the first feedback and financial results were the social functions, a full-fledged email newsletter, automation and mobile application developed.
4. A product with one parameter
An MVP can be real software with a minimum set of basic functions required for verification. Releasing a product with one function (parameter) allows for the narrowing of the target audience, receiving and analyzing feedback, and then beginning testing.
How to create a Minimum Viable Product (MVP)?
1. Define the product’s main objective
In order for the product to be in demand, it must solve a specific consumer problem. Understand why a potential customer needs your product and why they should buy it. A detailed answer will help you understand what problems the MVP should solve in the first place.
2. State the problem you want to solve
The first thing to do is to articulate the goal of the product. Answer the question: "What is this product for?" Move on to the next step as soon as you have clearly stated the value of the product in a few words.
3. Determine the target audience
It is a huge mistake to create an MVP for a broad audience. A large amount of information and too many conflicting user reviews make it difficult to find a working product model. Therefore, you need to narrow your audience. During the MVP testing process, offer the product to the audience that best matches your concept of the ideal buyer.
4. Identify the main competitors
Even if you have come up with a really novel product, there may already be similar solutions on the market. Study the market for competitors. Find out exactly what competitors are offering, what market share they occupy, and how they attract customers. Once you know the strengths and weaknesses of your key competitors, you can understand what will make your product unique and what it lacks to become competitive.
5. Do a SWOT Analysis
The SWOT analysis is a strategic planning technique. Its purpose is to analyze factors affecting the subject in question.
It is particularly necessary to define the product’s:
The purpose of a SWOT analysis is to focus on strengths, identify and minimize weaknesses, avoid threats, and leverage existing opportunities for further development. Strengths and weaknesses are usually related to internal factors. Opportunities and threats concern external factors.
A SWOT analysis helps companies analyze competitors and choose a market positioning strategy.
6. Create a user journey map
After you have analyzed a future product, it's time to evaluate it from the consumer's point of view. You need to understand the order of actions taken by users which lead them to purchase your MVP.
The customer journey should be short, simple and convenient. A detailed description of all the client's actions will help in understanding what information is missing or what details will help in the presentation of the product.
7. Compile a list of product functions
Perhaps your final product will solve several problems at once. But the sheer number of possibilities in the testing phase will only confuse consumers. You will not be able to fully test your idea and you will be confused by the huge number of reviews.
First, highlight the main functions that allow you to solve the product’s main objective. There shouldn’t be many - one, two, or three - and they will form the basis of your MVP. Sort all other features by importance. You will add them after launching the product, collecting feedback and analyzing the test results.
8. Choose a Management and Development Methodology
There are several software development methodologies applicable to MVP development:
One methodology of Agile software development is based on several principles: eliminating unnecessary costs, fast delivery, strengthening learning, and building integrity. In fact, Lean uses build-measure-learn iterative development. With Lean, developers can delay most design decisions, establish a fast feedback loop, and make sure they are creating a compelling product.
This methodology is also based on the iterative approach, but the amount of work is divided into sprints (cycles lasting 2-4 weeks). An MVP is created at the stage of the first sprint. In subsequent sprints, the team updates the product based on consumer feedback. Scrum helps to reduce the workload on the team. This methodology is suitable for the gradual development of a product.
Kanban focuses on the work-in-progress model, and unlike Learn and Scrum, does not have a cyclical progression. Instead, Kanban encourages focusing on tasks as they arise. This balances the scope of work to match the capabilities of the team. Experts add tasks to the pipeline as soon as they receive feedback from users. Kanban can be applied after the first version of the MVP is released and can be a powerful methodology if feedback continues to flow in.
EXTREME PROGRAMMING (XP)
Unlike scrum, kanban, or lean, XP is only applicable to software development. The principle of the methodology is based on code simplification and constant team interaction, testing and frequent releases. Development cycles with XP last no more than a week. This allows for a quick launch of the first version and subsequent upscaling.
9. Use alpha and beta testing
Launch the first version of the product to a narrow group of consumers. This is alpha testing. Usually the first users are friends, acquaintances, and relatives. If there are no flaws, you can proceed to beta testing. Offer the product to real consumers. After one or two weeks, collect and analyze the feedback. Refine the MVP and test again.
If you have collected enough feedback, you can update the product and test it again to receive more feedback. The number of build-test-learn cycles and their time frame vary by product. After you've completed a few loops, you can go back to step 0, change direction, or continue to iteratively improve your product.
Several iterations of alpha-beta development will help you arrive at an optimal first version of the product, which can then be brought to market for the general public and continue to be refined.
The Minimum Viable Product serves as a sort of airbag. It makes it possible to predict the commercial and technical potential of a product, as well as its implementation. An MVP allows you to make technical and business decisions based on facts, not assumptions. Therefore, testing a concept or product on the market is the main goal of creating an MVP.