The Importance Of A Minimum Viable Product
In case you don’t know, 90% of all startups fail, and sometimes it’s because the product doesn’t fit the market.
As an entrepreneur, before you invest time, money, and resources into a business idea, it’s helpful to know if people actually love your product.
While many other entrepreneurs spend a lot of money on market research, successful innovative companies like Dropbox and Uber have developed an MVP first. This way, they find better ways to approach their target users and make a big profit.
In this article, we’ll explore what an MVP is, why you need an MVP for your business, and how to create yours.
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What Is A Minimum Viable Product?
A Minimum Viable Product, popularly known as MVP, is the first version of a product that contains only the essential features. It’s a version you use to validate your product idea and assess market acceptance.
An MVP should contain the basic features needed to solve the problem you want to develop a solution for. That doesn’t mean you only have a basic framework. Remember that it needs to be viable – so it should be usable.
If you want to help people get to their destination faster by developing a car, an MVP could be a bicycle. Since it solves the problem, you can assess the problems they’d have with this version and use it to work on your actual product.
A more realistic example is developing a financial services app. Your MVP could be an interactive user flow that shows what transactions a user can perform. We’ll look at the types and creative ways to create an MVP later in this article.
Benefits And Purpose Of Having An MVP
We’ve already outlined why companies might choose an MVP first. But if you’re still weighing it up, here’s why you should create an MVP;
1. Reduces Costs In Product Development
If you focus on creating a simple version, you’ll usually spend less than if you build the actual products. Since it’s very likely that you’ll change the product several times, you’ll save a lot of money if you don’t build the full product.
There’s also the possibility that your product won’t scale. With an MVP, you can identify that too and reduce the amount you’d have spent on a project that’s not profitable.
2. Validates A Product Idea
An MVP helps you assess the viability of your product by seeing how real users interact with it. This is especially helpful if you’re entering an untapped market.
You can also see what your potential users want to achieve with your product. As you get user feedback, you can figure out what you can improve and what you should put more emphasis on.
3. Helps You Properly Plan Your Project
Your MVP often shows you the possible changes you need to work on. This way, you can find out if you need to change your entire direction or continue as planned. This way, you can create a better product roadmap.
4. Strengthens Your Position With Stakeholders
While you might find that you need to change your product direction, you might also identify a new business potential with your MVP. If you identify that potential, your stakeholders and investors will have more confidence in your product. That means more investment and funding.
How To Build An MVP
So are you ready to build your own Minimum Viable Product? Remember, just because it’s a simple version of your product doesn’t mean you can just create anything and present it as your MVP. This requires detailed research and planning.
Here’s a step-by-step guide to help you do that;
Combine Design Thinking And Market Research
Contrary to what most people think, market research and design thinking aren’t so different. That’s because both identify challenges and find ways to design products that solve those challenges and meet the needs of their potential users. However, combining both methods helps you better understand your market and your users.
The typical design thinking approach starts by empathizing with your target audience before defining a user persona, challenges, or pain points.
So when defining your target users, start by understanding your users’ motivations. You can conduct user interviews, take surveys, or even shadow them. This way, you’ll learn what real-life problems they face. The data you get will help you create a solid user persona.
Let’s say you’re developing a travel app, you want to target people with and without families. For example, if you’re shadowing a mom, you’ll learn valuable information about how many kids she has and what her daily life is like
When you talk to her, you’ll learn the reasons she actually uses your app. That way, you can find out if she wants time off from the kids or if she wants to enjoy family time on vacation. Instead of assuming.
You should also apply this to your competitive analysis. Understand why your competitors are doing something specific. Talk to their users to understand why they prefer that brand over others. This can help you find innovative ways to capture the market.
Finally, be open to defining and redefining the problem. Remember, you may not always get it right the first time. But like a designer, you should be willing to review your results and tweak them if necessary.
Pro Tips– Invite other members of your team to help you with the process so you have more perspectives.
– Your research is about understanding a problem – don’t approach it with assumptions that you want to confirm. That’s research bias.
Outline Clear Value Propositions
Once you’ve completed your user, market, and competitor research, you can objectively identify clear value propositions. A value proposition is a statement or list of potential benefits that your product has to offer.
You can pretty much say you want to offer convenience or make things easy. But how? The thing about value propositions is that they should be understandable to your users. That’s the only way you can convey what you offer without sounding like a broken record.
It’s important not to confuse your company’s value proposition with your product’s value proposition. While one reflects your overall mission for the different products, the other focuses on the benefits your customers can get from choosing your product.
Studio Neat does a great job of communicating its product’s value proposition in three sentences.
In this example above, they start by reiterating the problem – users losing stuff. They show the solution and connect it with an emotional benefit – peace of mind.
Some companies like to use one-liners like Uber VP, which is “The smart way to get around.” Remember, whatever style you choose, communicate it clearly. In other campaigns, Uber explains in more detail what it means by “smart.”
We recommend developing several variations before you settle on one. Once you have a list, show it to your audience and let them vote for the variant that appeals to them the most. The one with the most votes could be your new value proposition.
Pro Tips– Avoid using free shipping, free trials, and similar offers as value propositions.
– Always connect the solution with emotions, because people can identify with it better.
Build Your MVP
Many guides and articles recommend you focus on one feature. While it’s nice to have core features to test your idea, MVPs go beyond creating one feature. There may even be no feature at all.
There are two types of MVPs: low fidelity and high fidelity.
- Low fidelity MVPs: These are used to identify your target market and understand it better. They’re also helpful in validating your product ideas and figuring out which approach works best as a solution. This is more in line with establishing a product-market fit.
- High-fidelity MVPs: These MVPs focus on growth opportunities. So it’s about questions like: How much are people willing to pay for this product? And how to find your first customers.
Here are a few MVP ideas and examples to inspire you;
The Landing Page MVP
For example, you can create a registration form for a web page to get the users’ opinion before developing a feature. On this page, describe your product idea and ask users why they want to use your product.
Joel Gascoigne, the founder of Buffer, used this as an MVP. After describing his product, he posted it on Twitter. Of course, there were a lot of signups as a result, and many people reminded them of the waiting list.
In this way, he was already building a relationship with his target audience and understanding their various motivations for subscribing to the service.
The Video MVP
You can also create a video that illustrates what your product is meant to solve – especially if it requires a lot of capital. This is a great way to show your users the possibility of a solution and, of course, convince your investors.
Rather than launch a very expensive product and hope it sells, Dropbox co-founder Drew Houston created a video demo that shows how the product will work.
In this four-minute demo, people could see in real time how this product could support their work. Within the first 24 hours, the video was viewed about 10,000 times. From the feedback and comments, Drew already knew how viable the full product would be.
Manual Before Automation MVPs
If you’re planning to implement an automated system, you should check how viable your idea is before investing in AI. And that’s exactly what Adwords Express has done with its MVP.
Many people think that the system was automated from the start. But in reality, it was a group of students who typed in the incoming queries immediately. As the number of queries increased, Adwords Express switched completely to an automated system.
The One-Feature MVP
You can also create some sort of high-fidelity MVP to better identify growth opportunities. Usually, it starts out as a one-feature MVP.
Airbnb is a good example of this. The founders decide to use their own homes first to test the idea and see how much people are willing to pay.
So they created a very simple website and rented out their apartment until they saw the growing demand and decided to expand the platform to other renters.
Pro Tips– Your budget influences the nature of your MVP – never try to go overboard with it.
– Show your MVP to your target audience, and if they don’t accept it, test it with another user segment.
Test, Measure, And Learn
Once you have your MVP ready, it’s time to test it. Just as Buffer posted on Twitter and Dropbox released a video, you need to get your MVP in front of your target audience.
If you have a low-fidelity MVP, it measures users’ feelings through their comments, suggestions, or even their approval of your idea. If you already have a high-fidelity MVP, then you observe how users interact with your website or app.
These usability tests can tell you about feature improvements, price adjustments, and many other product iterations.
Make sure you have a solid way to get and sort this feedback. For example, if you’re conducting surveys, make sure your tools help you create a dashboard that allows you to better interpret this data.
There’s also quality assurance testing, especially in a high-fidelity MVP development process. You should make sure that you satisfy the users in the best possible way. Otherwise, they might get a bad impression of your product and refuse to come back.
Give your MVP to your target audience only when you’re sure that there are no critical bugs they might encounter. Realize that you might get a lot of negative feedback. But that’s better than getting no feedback at all. You can always improve on negative feedback.
Pro Tips– Collect both quantitative and qualitative data – quantity shows how likely you’re to scale in the market.
– Test with multiple channels and note the channels that perform best.
Creating an MVP helps you understand your market, save costs on product development, and build a relationship with your users.
Since you’re the owner of the company or product, you should always make sure that your MVP is in line with your company vision. Although you can always rename your product to better fit your market, it helps to set your goals early and make an impression on your potential customers.