Minimum viable product (MVP) is a product version that allows marketers to evaluate its potential. It has only the core functions to satisfy specific consumers' needs.
In this article, you'll get to know why an MVP is important, learn its types, and get some clues on how to build such a product version for your startup.
Why is a minimum viable product important?
According to the Bureau of Labor Statistics, around 20% of startups fail during the first year of their existence. The reasons include legal issues, poor business model, sharp competition, lack of money and passion among team members, poorly analyzed market, etc. It's possible to predict and prevent some of these problems with the help of a minimum viable product.
An MVP contains the basic product features essential to provide consumers with the necessary solutions. Very often, this term is confused with a prototype. While an MVP is a released product, a prototype is just its model.
A minimum viable product allows business owners to get valuable first-hand insights into their product. A company releases the product with a limited number of features and resources. This way, they save time and money and can evaluate the potential of their product before making huge investments. Analyzing the consumers' feedback, business owners decide if there is a need for their product in the market, whether it is competitive and if it can meet the audience's needs. As a result, a company can decrease the number of development iterations and improve a product on the go.
Below you can see the process of creating and developing an MVP. The first image doesn’t demonstrate an MVP since this product can’t be used after the initial release, while the second product has the basic feature that lets it solve the client's problem.
Read on to discover more benefits of a minimum viable product.
Benefits of MVP
Building a minimum viable product can help you prevent lots of pitfalls that you may ignore when being passionate about your product. With this tool, you’ll manage to take a 360-degree view of your product without bitter experience. Check the benefits below.
- An MVP allows business owners to analyze the demand. When you come up with a great product, you think everybody needs it, but you can’t be sure until you check it. As a result, it may turn out that current products on the market satisfy your potential client's needs or that your product lacks a competitive advantage. In this case, building an MVP will help you avoid playing a guessing game and investing much money.
- An MVP makes it easier to receive investments. You need to persuade th stakeholders that your startup is worth investments, and an eloquent pitch is not enough. Since an MVP is an already released product, investors can evaluate its potential and make an informed decision based on accurate results.
- An MVP allows business owners to test and improve product usability. Hundreds of purchases or downloads don’t mean success, especially if users no longer interact with your product. This may be a sign of poor UX and product usability. You have a great chance to analyze user behavior and find out what makes people abandon your product. Finally, you’ll make all the necessary improvements before investing money in further product development.
- An MVP helps create a better product. Since a minimum viable product implies releasing a product with limited functionality, you can focus on the most important characteristics. After testing it on early adopters, you’ll learn what people love about it and what solutions it lacks. People will be happy to help you improve your product.
- An MVP ensures quick release. High competition on the market makes business owners spend too much time hesitating and doubting their product quality. As a result, they invest everything they have in a product they can’t be sure of. It often takes years of development and thousands of dollars. While an MVP shortens this entire journey be several times. The sooner your launch your product, the sooner you’ll get feedback and be able to act on it.
- With an MVP, you’ll have your first customers. It’s challenging to acquire a first client when you enter a highly-competitive market. An MVP makes it easy to cope with this task. People love brands that appreciate their opinion, so your early adopters will be happy to help you. This way, you’ll get their honest reviews, and they will participate in your business growth.
There are different types of MVPs you can use for your business. Let’s take a closer look at each one.
5 Types of MVP
We’ll review the 5 most common types of a minimum viable product.
- Concierge. This MVP type implies manual solving of customers’ issues without releasing any product. You may have no product, service, or even website. For example, before launching an app that creates customized diet plans according to users' goals and health, you can consult people on your own. This way, you’ll find out if there’s an actual need for your product in the market and be able to understand what people do need. This MVP type requires much time and dedication but provides lots of insights.
- Wizard of Oz. It is similar to the previous type, but a business owner's goal is to make users believe that a released product is a full-fledged service based on automation. It means that you do all the work pretending that your product is automated enough to handle everything independently.
- Landing page. This MVP type implies creating a landing page describing all the advantages of your product and providing users with an option to buy it. You may either offer them to purchase an existing product or tell them that it’s coming soon. The advantage of a landing page is that you can collect your customers' email addresses and talk to them directly about your product or service. Moreover, you can analyze the demand and user behavior to make the necessary changes.
- Explainer videos. A video is often the best way to describe a complex product.
It allows you to show how things work, what is so special about your service, and how it will satisfy the clients’ needs. This way, you’ll not only introduce people to your product but can track their engagement and analyze the demand.
- Pre-order MVP. This MVP type is the best choice for businesses that need big investments and customers to access it. Clients can make investments in product development or pre-order it. This way, business owners can evaluate the product's potential, the number of people interested in it, and receive financial help.
So, now that you know the peculiarities of different types of MVP, it’s time to learn how to create one for your business idea.
How to build a minimum viable product?
When creating an MVP, the most important thing to focus on is to highlight several essential product features and leave behind everything that makes it complicated and requires lots of resources. Follow the 5 steps below.
- Study your market. Understanding people’s pains and needs is the key to building a successful MVP. With a deep analysis of your market and competitors, you’ll get to know if there’s a need for your product, which clients’ pain points haven’t been satisfied yet, and what your competitor’s product lack. You need to unveil the gaps since you can transform them into your competitive advantage.
- Investigate your customer journey. To evaluate your product objectively, you need to look at it from a user’s perspective. Define the path each client goes through when dealing with your service. Find out what attracts them and makes them choose your product. Detect the problems people face when interacting with your service. This way, you’ll learn why they abandon your product. Analyze which queries may lead them to your website. With the results of this research, you’ll be able to provide users with help when they need it — add some clues, tips, instructions, lead magnets, reviews, demos.
- Consider the product features. Since a minimum viable product implies offering a limited amount of features, you need to prioritize them to avoid distractions. For this purpose, ensure that you know what your client need and what feature can satisfy this need. Then, categorize all your product features according to their priority. These can be features your product must/should/could/wish to have. Add less important features to the backlog for future product improvement.
- Choose your project management framework and assign the manager responsible. A project management framework will help you ensure that you are on the same page with all your team members. This is an A-list task for smooth product development, control, and release. Consider Agile, Kanban, Scrum, Lean methodologies and choose the most suitable for your project. Delegate the tasks and assign managers responsible for each goal.
- Launch, get feedback and iterate. Once you’ve gone through all the previous steps, your product is ready for release. Ask your customers if the product met their needs, which problems it failed to solve, and what they would like to improve. Analyze each. Analyze each answer thoroughly, add new tasks to your backlog, and iterate until your product satisfy the primary clients’ needs.
Congrats, you are in the home stretch. Not it’s time to have a look at some outstanding examples of minimum viable products of famous brands.
Before building your MVP, get inspired by the MVPs of well-known companies.
The CEO of Dropbox, Drew Houston, knew that there were a lot of companies providing cloud-storage services. He decided to create an explanatory video that would describe the advantages of the service. The number of views exceeded 70,000 in just one night, and it was a success. Today Dropbox is the leader in the industry.
Jeff Bezos used either a Concierge or Wizard of Oz MVP type before launching Amazon. He collected orders on his own, bought the books, and sent them to the clients. A large number of orders was a confirmation that people needed this service. So, he added more books to his website and bought warehouses.
Before launching this famous app, the owners rented their own apartments via a website. The number of orders and reviews made them believe that people need such services, and they’re feeling good about having a night in someone else’s house. Today, travelers from all over the world use this service and receive income.
So, now you know why a minimum viable product is crucial for every startup and how it turns them into well-known brands. Don’t be afraid to take risks!
Last Updated: 31.01.2022