Minimum Viable Product - why it matters?
What is MVP?
The minimum viable product (or MVP for short) is nothing more than a product at the initial stage of development, with basic functionalities. Nevertheless, the MVP version allows for presentation to the client and evaluation of profitability. It is a fairly broad concept that includes, for example, mobile and web applications or services.
Creating a new product and introducing it to the market is always a high risk. We do not know whether the product will be appreciated by customers or whether it will meet their needs , and most importantly - whether the business model will be financially successful. MVP can be used to verify these assumptions, both for startups and companies that have been on the market for a long time and are bringing a new product on the market
The term MVP was created by Eric Ries. In 2001, in his book The Lean Startup Method, he characterized MVP as a version of a new product that enables the team to collect the maximum amount of confirmed customer information with the least effort.
According to Ries, it is more profitable for companies to provide potential customers with a product that focuses on one or, at most, a few functionalities than a continuous refinement of the product without market verification. Does this mean that MVP is of low quality? Absolutely not! Note that we're writing here about functionalities that are already fine-tuned and therefore can be made available to customers - not something that just looks bad or doesn't work.
Advantages of MVP
- a quick way to verify your business plan
- low financial entry threshold
- possibility to verify assumed hypotheses
Building of MVP
Before you decide to build an MVP, you should ask yourself a few questions that are likely to determine whether you will take up this challenge at all:
- who will your product be aimed at?
- what functionalities should it have?
- what will the value be for the customer?
It is also worth researching your MVP utilizing the MoSCoW method, which will allow you to prioritize. This method involves answering the following questions:
M (must have) - the data necessary to create MVP;
S (should have) - which functions are less important than in must have, but will increase the value of MVP;
C (could have) - Minor features that are generally not required for the correct operation of MVP, but can be implemented;
W (won't have) - requirements that MVP does not have to have and which are unlikely to be implemented;
If you manage to answer these questions and clarify your requirements and list the necessary functionalities, then you can proceed to the further stages of building MVP, in particular, to research similar products on the market.
MVP - example
Having created an MVP, you must bear in mind that there are three possible outcomes:
- complete abandonment of the project due to maladjustment to users' expectations or poor functionality,
- further product development, taking into account the opinions of potential customers
- pivot, i.e. a radical change in the vision of a product, its business strategy or operation.
A good example is one of the most popular social networking applications called Instagram.
At the very beginning, the application was known as Burnb, and its function was to share the location of users. Later, the developers of the application - Kevin Systrom and Mike Kireger added the feature to add photos and descriptions. Ultimately, they failed to build a large community, so after getting feedback from users and investors, they focused solely on the photo function. This was bull's eye.
The creators also changed the name to Instagram (a combination of the words instant camera and telegram). Within a few months, the application was downloaded by tens of thousands of users. Initially, it was only available for iOS, later also for Android. In 2012, the app was bought by Facebook for $ 1 billion.
MVP and competition
If you already have an idea for a specific product, you know the target group you want to reach as well as what problems you want to solve, it's time to examine the competition on the market. If it exists - investigate its strengths and weaknesses. Verify that your product does not copy defects in other products that you are checking. If there is no similar product to yours on the market, we can assure you that after your success, there surely will be one.
Examples of large companies that also started with the MVP version are such companies as UBER, DropBox, Spotify or Airbnb. After a strong market entry, many similar products were created - for example Bolt, TiDAL or Google Drive.
Follow up with MVP
If you have your minimum viable product ready, it's time to start testing - check how your users react, what feedback you get and whether the functionalities introduced respond to the real needs of users. What is important at this stage?
First of all, testing, improvement and further testing.
Remember that creating an MVP is an option well perceived by potential investors, which makes it easier to get financing. It is worth adding that they often require market verification - e.g. dozens of meetings with customers, written declarations of purchase or letters of intent.
Of course, creating an MVP alone does not guarantee market success, let alone obtaining financial support for further development, but with a good idea, appropriate business plan, proper market analysis and researching the competition, you have a chance to achieve success. Remember that many breakthrough products that have appeared on the market in the last dozen or so years, were first created as an MVP version.