Understand the concept of Minimum Viable Product
Test the risks & assumptions in your business idea
Imagine that you are an aspiring entrepreneur in search of a profitable business idea. Suddenly, you stumble upon an idea that you think you should start to work upon. You rush to your initially identified potential customers to tell them about your solution, technology, or product/ service. After talking to them, you arrive at a prototype with only those features that will satisfy their needs or solve their problems. You now offer your solution prototype to your customers. If they agree to pay you for your offered solution, you have arrived at your minimum viable product.
It is that simple! But is it?
Let’s dig deeper and clear common confusions that startup founders & aspiring entrepreneurs usually have about a minimum viable product.
Let’s first begin with the definition.
What is a Minimum Viable Product? – The definition
If we go by the definition, “minimum viable product is a solution which may be a product, service or any solution with only enough features to satisfy early customers and get feedback for future development”
Product or service with a complete set of features is only designed and developed after feedback from the initial users of the product and that too not in one go but through continuous feedback from them; the customers.
Misconceptions about the concept of MVP:
1. MVP means creating minimal products
Minimum viability does not mean creating products with minimum features. What it means is that version of a product with just enough features that satisfy the needs or solves a real problem of early adopters of your product. Here, the words or phrases to be emphasized are “version “, “just enough features” and “early adopters”. Let’s understand the contextual meaning of each of these three phrases one by one:
“version”: Minimum Viable Product does not refer to the 1st or subsequent prototypes that you build. You may build your prototype without any insights about the real problem or need of your target segment. In this case, you may end up getting no feedback from your potential customers. Thus this version of your prototype is NOT an MVP.
It particularly refers to that version of a prototype that attracts your early adopters and convinces them to pay for it. Here the engagement of your early customers is indispensable. You need to take note of the feedback from early customers in your target segment to make improvements in your product and make it a better fit for them to adopt. Minimum Viable Product is thus not a goal but something that initiates the process to reach that goal.
“just enough features”: Getting just enough features is not tough but tricky. Let me explain to you why this is the case. If you develop a prototype of your offering (which may be a product or service or any other solution) with too little features, it’s more likely that your potential early customers will either not bother to provide feedback on your offering or will provide too many opinions to be incorporated in it.
If you develop a prototype with almost all the features that you think your customers will like or pay for, you enter into a risk of losing all your time and resources if your customers do not like the product at all.
Thus a minimum viable product is a trade-off between these two extremes. It has only and only those features that solve the real problem or satisfy a real need or manage to engage the early adopters for providing feedback on that product for solving their problem or satisfying their needs.
“early adopters”: Early adopters or early customers are those set of customers in your target segment who forgive you for not offering them a perfect solution. They are more concerned about getting their problem solved. They are in a way, visionaries who manage to foresee the promise of the offered solution in solving their problem either today or in the future. Not all customers in your target segment have this ability.
2. MVP is a ‘ready to launch’ product
Many founders who set out on a journey of entrepreneurship think that getting to the stage of achieving the minimum viable product is all they have to do to start making a profit. Please note that MVP is NOT the final version of your prototype that you plan to launch on a mass scale. Indeed your real journey starts after you have developed your minimum viable product. The early adopters are engaged in a feedback loop for providing regular feedback on product iterations to make the product market-ready.
Once the MVP is established, you enter into a ‘build-measure-learn’ cycle as shown below. Under the ‘measure’ phase, you measure the results obtained during the ‘build’ phase (MVP is built and tested for collecting data in the ‘build’ phase). You compare your assumptions you had before testing your MVP, with the results obtained after testing it under the ‘build’ phase.
Based on this comparison and analyzed data, startups under the ‘learn’ phase decide whether to pivot i.e. change or shift from some or all aspects of the product or continue with the same goals. The idea as suggested by Eric Ries is to minimize total time through this loop. This can happen when you ‘build’, ‘measure’, and ‘learn’ as quickly as possible.
3. Customers like the full product and not the MVP
Some of you might have thought to develop a complete product with all features before taking it to customers just after your 1st prototype failed to convince your potential customers. Founders take such actions when they have a notion that customers prefer complete products to minimum viable products.
When you do not get any feedback from your potential customers, it is that either the product has too little features to enable association of your customer with that product or the product does not solve a real problem or satisfies a real need. Developing complete products in such cases can be deadly for startups.
Benefits of moving ahead with MVP
- Maximum customer validation or feedback can be achieved with the least resources.
- Risk of losing a huge amount of funds, resources and time is eliminated
- Market insights and customer preferences are revealed during the product development phase.
- Time to market is reduced considerably
Types of Minimum Viable Products
Depending on the type of market and customers you are planning to serve, your MVP type may vary. A simple website landing page can be an MVP in one case while a fully functional hardware product is an MVP in the other. Different types of minimum viable products are:
- Product Design MVP like a simple 3D cad model or sketch that highlights a core functionality & idea.
- Landing page MVP is a single web page with only the key information about the product, its benefits, and the value for users.
- Piecemeal MVP uses available solutions or tools to deliver a product or service. MVP is not made from scratch. Instead, all required components are collected from different sources and put together to create new functionality.
- Crowdfunding MVP uses crowdfunding platforms like Kickstarter or Indigogo to get validated learning from early adopters or even get payments from some.
- Demo videos as MVP where all the product features relevant for customers are shown and explained in a video.
Examples of popular companies that started as MVP
- Airbnb – The company was started as a minimum viable product (minimum viable service in this case) in the form of a simple website with relevant information for providing cheap accommodation during an event. Founders used their apartments to validate their idea. Three early customers got ready to pay for the service.
- Facebook – It provided users the feature of connecting with group mates using simple profiles.
To Wrap Up
MVP is the shortest possible route to take a new product to market and attract early adopters and investors. A high degree of connectivity with the customers provides deeper insights into the product’s acceptability. This enables startups or even big companies to test their riskiest assumptions during the very early stages of product development.
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