Minimum Viable Product – What is it, Why should you use it, and a Guide to creating an MVP for your business
Do you know the reason why most business startups fail? It’s due to the lack of market need or interest in their product or service. Entrepreneurs invest a lot into properly building a good product or service and getting together a solid team. But, the question still remains, what will you do if there is no interest in what you’re offering?
More often than not, the expenses incurred on developing and maintaining the business are higher than the potential of the product. Unfortunately, that’s completely normal today. But, there is a way of avoiding unnecessary expenses and assessing the market interest in time. And you can do that through a minimum viable product (MVP).
Let’s find out more!
MVP – What is it?
MVP stands for Minimum Viable Product. It denotes a simplified version of the product. Its interface and functionality are just enough to fulfill the main need and capture audience interests. The MVP does not include additional features like customization, personalization, and other extra features.
MVP is a bare-bones version of a product with just the essential functional features and interface. It is a stripped-down version of the product that’s enough to test the idea. So, if the worst should happen, the business will still have enough funds to explore other options.
The minimum viable product also provides a way for the end-users to explore the product and understand its main purpose or utility. Don’t be misled by terms like bare-bones and stripped-down. MVP must be appealing to the audience. It must have a presentable look and feel and should be well-tested. But, the functionality and interface can be simple and limited.
Why should you use an MVP?
The Minimum Viable Product is the shortest way of turning your business idea into a reality. You have two options. You can either wait for years to enter the market while trying to create the perfect product or you can get your MVP ready and run that in the market! Brands like Dropbox, Airbnb, and Instagram went ahead with their MVPs and we don’t need to tell you about their success. Sometimes, taking the first step is a lot more important than waiting for everything to be perfect.
One of the most important reasons to use MVP is to test your ideas in the real world. You can save a lot of your money and time by launching a Minimum viable product. Right from the early days of the product’s life, you’ll know if users need it and the changes you should make to improve it.
An MVP can help your business a lot more:
- It can help prevent serious functional issues in the future
- You can identify risks at an early stage and at a relatively low cost
- It allows you to analyze user behavior and preferences which is much better than making assumptions
- Your customer loyalty will increase when people see you making efforts and caring about their opinions
- MVP will also allow you to accurately gauge the demand for your product
- It’ll help you further improve your product so that it is close to perfect when it is finally released
Bottom line is that an MVP will show you if your idea works or not. It will help you justify market demand for a product and subsequently, get support from investors or partners.
Let’s check out a few MVPs that made it big time!
As an MVP, Amazon limited to selling only books on its eCommerce store. It doesn’t mean that they weren’t ambitious enough to sell all kinds of products on their online store. They consciously chose to limit themselves to a simple field. Logistically, books are easier to handle, store, and transport. This allowed Amazon to test its product concept in a low-stake industry.
Most people don’t think of buying a book as a major purchase decision. They’re cheap, easy to transport, and market. And what was Amazon’s end goal behind this? They just wanted to check if customers will trust online stores and streamline the processes.
At Harvard, the online student director books were called facebooks. Facebook began as a directory of Harvard students. On Facebook, users could manage their networks, profiles, and communicate with classmates. The site was introduced to a limited target audience comprising only of Harvard students. After its initial success, Zuckerberg started offering Facebook memberships in other Ivy League universities. So, it started out very slowly as an MVP, and gradually turned into what it is today!
Till 2005, Facebook was called Thefacebook and was just a network for students. But, soon it expanded beyond universities, and even beyond the USA. Eventually, Thefacebook was renamed Facebook and released as a social network.
You might know Uber as one of the most advanced cab-hailing services in the world. It is known for its highly functional and intuitively mobile app. But, they didn’t start out with a state-of-the-art application. Far from that, they started out by allowing users to book rides via SMS. Soon, they introduced an app for the same. But its interface took a lot of time to get to what we see and use today. Moreover, when it started out, Under was a small San Francisco based startup providing cab-hailing services in one city only. Today, Uber is an international service available in more than 80 countries.
A Step-by-step Guide to creating an MVP for your business
Conduct thorough Market Research
You must conduct thorough market research for an MVP. Reach an intelligent estimate of the potential number of users, locations, and niches that you could cover. Use the following four techniques to conduct market research:
1. SWOT analysis
You must analyze the market and location by its strengths, weaknesses, opportunities, and threats. Conduct a SWOT analysis to gain more insight and information.
2. Direct market surveys
Reach out to people in your personal, professional, or social circle. Conduct well-thought short surveys to gauge their opinion of the idea. You should aim to understand why and how they’re using the product or services, the scope of improvement, and as much related information as you can collect.
3. Study the market to understand sustainability
Analyze competitors, market trends, and predictions at regular intervals. As an entrepreneur, you must check the sustainability and practicability of your idea in the market. You must have a thorough and updated understanding of the key players, their market positioning, market share, and more. Moreover, you must also have a thorough understanding of all the applicable laws, regulations, and forecasts.
Clearly understand the Idea and the Core Value
The MVP must clearly exhibit the fundamental value of the product. It must clearly reflect the main functionality and interface of the product or service. So, before you move on to MVP development, you must examine the core value offered by your product:
1. Make your positioning extremely clear:
The main concept or the explanation of the idea should fit into 1-2 sentences. You should be able to convey the essence of the idea in 1 or 2 sentences so that people understand it.
2. Determine the primary target audience:
You might have imagined your product to be tailored for multiple user segments. But MVPs usually target some specific segments. Amazon limited its reach by industries and Uber limited its reach by locations. In the same way, you can limit your MVP to particular locations or industries.
3. Clearly ascertain objectives:
You should know what KPIs the MVP is expected to deliver on. At this stage, you should be highly aware of the data required for analysis.
Before starting with MVP development, you must have a clear vision of the product. It has to be a concise, feasible concept, limited only by constraints that can be overcome with diligence and hard work.
Establish a User Flow and EX design
Before you enter the development stage, you need to understand how users will interact with the platform. This is where UX design, user flow, and its main elements come into play.
- Buyer/user personas: You need to clearly and elaborately describe who your potential users or buyers are. Having clear user personas helps streamline your marketing, targeting, and sales efforts. You need to describe users based on demographics, interests, career, financial status, challenges, likes, dislikes;
- Prototypes: You should have a simple illustration of the interface, screens of essential pages of an app or a web page;
- Flowcharts: These include a step-by-step description of the various stages of a user’s journey on the platform.
These elements will help you see the interface through your visitors’ eyes and perceive the real-time user experience. These visuals will help determine the format in which you’ll build the functionality of an MVP.
List out your Functional and Non-functional requirements
Initially, you should focus on having a set vision for your product’s interface and design. Once you have that figured out, you need to think about the precise actions that users will be able to perform. You can compartmentalize them into functional and non-functional requirements for your ease of understanding.
- Functional requirements: These include a list of features, scope, and technical characteristics. The functional requirements can be broken down into groups and prioritized based on user needs.
- Non-functional requirements: These include a list of criteria used to evaluate the MVP. Examples of non-functional requirements include security, payload management, performance, security, and others.
Establishing necessary features and requirements for those allows business owners to understand the purpose of the product. You’ll know exactly what value you provide to customers.
Having an MVP is essential for developing a valuable product that has the potential for success. MVP ensures the smooth performance of essential functionality. Therefore, your customers can get access to the product as early as possible, and watch it steadily improve. The team has a consistent course of action that they can carry throughout the entire project.