One of the key reasons behind a startup’s failure is relying mostly on assumptions when designing products. This happens when people become overconfident that they know the ultimate solution to a problem in the market. But knowing isn’t the same as validating.
To avoid such a situation, you can build minimum viable products (MVPs). It allows businesses to test their concepts in advance to gauge how users respond to it, before investing a lot of money and resources behind it.
What is an MVP?
An MVP is a product with a minimum set of features to attract early users and validate the idea in the initial phase of the product development cycle. In industries like software, the MVP also helps the product team get user feedback as fast as possible to improve and iterate the product. MVPs are utilised highly in agile development.
In simpler words, a minimum viable product is the initial form of a product that can be released to the users. It offers core functionality with no additional features. Startups use MVPs to examine how the end customers would feel about the product and the concept underlying. If the product seems to have potential, they will use customer feedback to build a better version of that product.
Building an MVP requires a smaller number of resources and money. You are not developing a whole product that needs to appeal to the whole spectrum of users. Thus, you could avoid the risk of creating unwanted features that you would have to adapt or remove later.
Keep in mind that a minimum viable product is different from a minimum marketable product. An MVP is the learning vehicle. It enables a startup to evaluate an initial product by assessing the data. A minimum marketable product, though, is a full product ready to sell. It has the least features users would need, but it still enables the startup to forecast some decent sales.
Why would you build an MVP?
As defined by Eric Ries, the man behind the idea of the Lean Startup Methodology, the purpose of an MVP is to have a version of a product that enables the development team to gather the highest amount of validated learning regarding the customers but with the least amount of money and time invested.
The key reasons behind developing and releasing an MVP include:
- To release the product in the market sooner
- To test the concept with users before locking a huge capital to the full development of the product
- To learn what is resonating with the business’s target market and what’s not
- To minimise the resources and time a startup may otherwise dedicate to developing a product that won’t sell in the market.
What is the difference between an MVP and a prototype?
The key differences between the MVP and prototype are scope, commitment, and audience.
In terms of scope, a prototype requires less time and effort. You can produce a range of prototypes that can be changed, adapted, and discarded quickly. Meanwhile, when developing an MVP, you will choose an idea, and stick with it. You need more effort, resources, and manpower.
Due to the differences in scope, the level of commitment is also different. Once you put resources and time into an MVP, you’re less likely to drop it completely. You may refine it further according to feedback instead. However, with a prototype, it is simple to dump the idea fully and restart.
Prototypes and MVPs also address different audiences. Prototypes mainly stay internally, and only includes a handful of users for feedback. It is not released or sold as a product. MPVs, on the other hand, are built to be sold to early adopters and end users.
What are the advantages of an MVP?
You get to acquire early adopters and loyal fans who honestly believe in your vision. They become advocates and can influence other people to create a snowball of sales later.
MVPs also helps reduce the development costs and maximise learnings. Building a minimal product means less support staff, fewer moving parts, and less code to be written. These cost savings is critical during the early stages of a startup, when funds are low and they’re still establishing their purpose and identity.
This eventually translates into a faster time to market, faster anticipation of the market demand, cost-effective development process, and easier adjustment of the products based on early and rapid feedback.
What are the disadvantages of an MVP?
In terms of disadvantages, the top one is that competitors may copy your product easily once it is out in the market. Just as it is easier and faster for you to create an MVP, so would it be for your competitors. Therefore, you must have a plan and be able to quickly launch the final product in the market once everything goes fine.
Furthermore, if your MVP doesn’t resonate with your target audience, it may hinder them from using your final product in the future. It can be a tough competition out there, especially if your idea isn’t original and you’re competing with full-fledged products with a strong user base. Ultimately, you must balance speed, product originality and market shrewdness.
3 big brands that started with MVPs
When users started using the service of Foursquare, they could only use one feature, which is winning badges when checking into locations. This gamification feature excited people, compared to how people used to update their location. Today, Foursquare has expanded itself into a full city guide.
Amazon began its journey as an online bookstore. While founder Jeff Bezos had a vision for a giant ecommerce site, he chose to start with selling books first – a minimum viable product. The high book sales eventually gave the company fuel to keep adding more products into the store and eventually offer a personalised experience to each user like it does today.
Airbnb’s founders started the business to give people the option to list their room for the short-term to generate extra income. Soon, they discovered that travellers were willing to stay in other people’s homes or rooms to save costs on hotels and motels. This was the turning point for Airbnb, and they have grown to be the biggest platform for travel accommodation ever since.