Minimum Viable Product (MVP)
The term MVP, or Minimum Viable Product, is a concept that has become a fundamental part of the startup and product development world. It represents the most basic version of a product that can be released to the market.
What is a Minimum Viable Product?
A Minimum Viable Product is the simplest form of a product that a company can release to its customers. It has just enough features to satisfy early customers and provide feedback for future product development.
History of the MVP
The concept of the MVP originated in the Lean Startup methodology, a business strategy popularized by Eric Ries. The Lean Startup methodology encourages companies to release products early in the development process to gather valuable customer feedback and iterate quickly.
Definition of MVP by Eric Ries
Eric Ries, the author of “The Lean Startup,” defines an MVP as a version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort.
What is the Purpose of a Minimum Viable Product?
The purpose of an MVP is to test the market viability of a product with minimal resources. It allows companies to learn about their customers’ needs and preferences, validate their product ideas, and iterate based on real-world feedback.
Benefits of MVP
The MVP approach offers several benefits. It allows companies to test their product ideas without investing significant resources, reduces the risk of failure, accelerates the learning process, and helps to build products that truly meet customer needs.
Securing Stakeholder/Investor Support
Often, businesses need the support of stakeholders or investors to secure funding and initiate a mobile project. The crux of gaining this support lies in instilling confidence in the product you’re proposing and its capacity to achieve the intended results (for instance, boosting revenue, reducing checkout times, etc.). Creating an MVP is a potent strategy for securing this support, as it allows you to test your idea before approaching investors. This ensures that when you do approach them, you have a robust case demonstrating the market validity of the product.
In essence, stakeholders are interested in investing in products that promise success. A significant advantage of an MVP is that it not only validates the worth of a product, but it also provides a tangible product that stakeholders can interact with. Moreover, if investors are convinced, the product can be launched without stakeholders having to wait for months to see a return on their investment.
Validating Business Ideas
The most significant advantage of creating an MVP is its ability to validate your business ideas. By delivering a product with just the essential features, rather than a fully-fledged, feature-rich product, you can confirm whether your product concept appeals to your target market. This offers a chance to alter the product’s trajectory based on your findings.
Upon product launch, you can identify the most engaged users and understand their interaction with the app. This data can be leveraged to fine-tune the app’s functionality to better cater to these users. With a feature-loaded product, making any changes could be considerably more challenging – you might even need to rebuild the entire app.
Instagram serves as an example of a brand that utilized its MVP for this purpose. Initially, Instagram’s primary concept revolved around a GPS feature. However, post-launch, the leaders decided to modify the concept based on insights derived from user feedback.
Assessing Market Demand
A Minimum Viable Product is fundamentally about experimentation; discerning what resonates and what falls flat. In many respects, an MVP is more about gaining insights into market demand than it is about selling or customer acquisition.
Organizations often presume that their product meets a specific user need. However, this may not always be the case; either the need doesn’t exist, or there are already existing solutions in the market. For an app to thrive, it’s crucial to conduct user research to ensure your product offers a solution that your customers genuinely require. An MVP enables you to do precisely this. You can ascertain if potential users need and will utilize your product, without making a substantial investment. Then, based on your findings, you can either refine your product to create more market differentiation or devise an entirely new concept.
Formulating a Monetization Strategy
For a product to be sustainable, it needs to be profitable. In the context of mobile applications, establishing a steady revenue stream involves crafting a mobile app monetization strategy. However, given the variety of successful app monetization strategies available, choosing the most suitable one can be challenging.
With numerous factors to consider, it’s possible to assume one strategy will be effective, only to discover it’s not. Once again, the optimal approach is to test your assumptions with an MVP. For instance, if your app monetization strategy relies on in-app purchases, you can use an MVP to gauge your users’ readiness to pay for upgrades and add-ons. If the results indicate that users aren’t making as many purchases as you anticipated, this suggests that you’ll need to adopt a different monetization strategy.
Evaluating UX and Usability
Developing a mobile product that fosters profound user engagement is a challenging task. As per AppFlyer, 50% of apps are uninstalled within a month of their download. Conversely, 90% of users who engage with an app – even just once a week – retain the app.
Maintaining users by consistently offering value is a crucial objective of user experience design. An MVP can assess the product’s potential for this through metrics like app engagement, longevity, and lifetime value. With a Minimum Viable Product, you can collect data and insights on user interactions with your product to evaluate how swiftly they comprehend its purpose and flow. Based on these insights, you can identify new opportunities to enhance functionality and deliver a superior user experience.
As noted earlier, mature products are the culmination of years of development, carrying a corresponding cost. However, since they are developed iteratively over an extended period, the cost is distributed, often with the reinvestment of revenue generated from earlier versions. The MVP approach also aids in preventing the product from becoming overly complex, which would necessitate more advanced coding and solutions. As you acquire more users and gather more data to guide the product’s direction from the MVP, you can start to invest more and in a more informed manner.
Examples of Minimum Viable Products from Top Tech Companies
If the concept of MVP seems a bit nebulous, here are a few concrete examples to help illustrate what an MVP can look like:
- Dropbox – Founders Drew Houston and Arash Ferdowsi initiated Dropbox with a simple 3-minute video as their MVP. The video was a straightforward product demonstration without any actual coding involved. However, when they released the video online, their waitlist skyrocketed from 5,000 to 75,000 people overnight!
- Foursquare – They gathered customer feedback using Google Docs, eliminating the need for code maintenance.
- Virgin Air – Virgin Air tested their hypothesis using just one plane on a single route. As they refined their strategy, they gradually added more planes and routes.
- Groupon – Groupon began as a basic WordPress blog with a widget that utilized AppleScript to send PDF coupons via Mail.app. Today, it’s a multi-billion dollar company.
- Spool – Known as the ‘Instapaper for the offline video world,’ Spool’s MVP consisted of a video and an invite list that included a field for an email address and a radio box to indicate the type of phone the user had.
Alternatives To An MVP Approach
While the MVP approach is popular, there are alternatives that companies can consider:
Minimum Lovable Product
A Minimum Lovable Product (MLP) focuses not just on functionality, but also on creating a product that users will love. It emphasizes user experience and design, along with basic functionality.
Minimum Marketable Product
A Minimum Marketable Product (MMP) is a product with the smallest possible feature set that addresses the customer needs and is ready for sale. It focuses on providing immediate value to the customer and generating revenue for the company.
Minimum Catchy Offer
A Minimum Catchy Offer (MCO) is a marketing strategy that focuses on offering a compelling value proposition to attract customers. It’s not a product, but an offer that is designed to be irresistible to potential customers.
What are the disadvantages of a MVP?
While MVP development has its advantages, it also comes with certain drawbacks that might necessitate frequent revisions or even complete abandonment of the project. Here are the primary disadvantages of the MVP approach:
- Lack of Focus. During the development of an MVP, it’s easy to lose focus. Iterative development processes demand focus, dedication, and a precise vision of what you want your final product to be. Otherwise, you might end up exceeding your budget.
- Risk of Competition. Catching Up It’s important to realize that others may have the same idea as you, and your competitors might catch up quicker than anticipated. Others might also observe your product, identify its weaknesses, enhance it, and carve out a niche product for themselves that surpasses yours, leading to a loss in market share.
- Choosing the Wrong Tech Stack. Finding the right tech stack and architecture for your project can take time. Often, this experience can be stressful, costly, and cause unforeseen delays.
How to Build a Minimum Viable Product?
The MVP development process typically encompasses six stages.
Step 1: Identify Problem and Scope
Like any product development approach, it begins with identifying target customers and their specific problems that the future product aims to address. The “scope” refers to the aspects of the problem your product will concentrate on and the potential solutions given your available resources.
Step 2: Undertake Market Research
Market research ensures that your product idea meets the needs of potential users. The more insights you gather, the higher your chances of success. This phase also helps you understand existing competitors and their offerings. Such insights will help you confirm if your product’s differentiators are strong enough to persuade people to choose your product over others.
Step 3: Prototype Potential Solution
The design process is a critical stage. You may need to view your product from a user’s perspective to create a seamless user experience. A product prototype allows you to simulate the user experience and make necessary adjustments before diving into coding. Fun fact: Steve Jobs skipped the prototyping stage while building the Apple Lisa, which resulted in the product being a disaster and unprofitable.
Step 4: Determine a List of Features
The feedback loop is crucial in MVP development, and you should start working on it right after presenting the first prototype to your focus group. Based on the feedback received, you can prioritize features for the next MVP release.
Step 5: Construct and Launch MVP
Once you’ve decided on feature prioritization, it’s time to build your first MVP. Remember, although an MVP doesn’t have to be a perfect product, it still needs to meet the key customer needs as defined in Step 1 and validated in Step 2. Moreover, it should be engaging, user-friendly, and straightforward, enabling users to complete an expected user story in the most convenient way possible.
Step 6: Build, Measure, and Learn
Collecting feedback shouldn’t cease when the MVP development begins. You should continue iterating based on user feedback.
What are the differences between MVP & prototype?
A prototype represents a stage before an MVP. While an MVP is a fundamental yet functional version of a product, a prototype is essentially the first draft, likely containing errors or bugs. It’s an initial effort to bring the working idea to life, encompassing design and functionalities, with the goal of validating the user interface (UI) and user experience (UX). Prototypes are not intended for launch, but rather for testing within a limited scope and among a select group of users.
Why do we need to develop an MVP first instead of building the entire product at once?
Creating an MVP is a crucial initial step in the product development process. It enables developers to efficiently test their ideas without excessive time or financial investment in building the full product. It aids in early identification of potential issues, allowing for necessary adjustments. It also offers stakeholders an opportunity to give feedback on the product before its full development, ensuring the final product aligns with customer needs and expectations. Lastly, an MVP helps developers gain insights into user behavior and preferences, informing future product iterations.