Have you ever wondered about selling a new product or feature with your business, but weren’t sure if the risk was worth it? The public marketplace can be unforgiving at times. An estimated 25% of consumer packaged goods (CPGs) are no longer bought one year after being put on the market, one study shows. Two years after launch, only 40% of CPGs are bought by customers.
Is there a way to test a product or idea without committing to a full-scale product launch that is both expensive and time-consuming? Thankfully, there is: it’s called a minimum viable product (MVP). What is MVP? Let’s take a look under the hood of these customer information magnets.
What Is a Minimum Viable Product (MVP)?
What is the meaning of a minimum viable product? Let’s break it down in straightforward terms. A minimum viable product is the simplest iteration of a product—or feature—used to validate customer demands before a full release. The core idea of an MVP was designed by the founder of Lean Startup Co., Eric Ries. He describes an MVP as creating something that gives a team the largest amount of validated knowledge of its customers for the least amount of effort.
The key behind this product management schema is to build a product that you can sell to customers to learn about their behaviors. In startup ecosystems, MVPs are extremely helpful information-gathering tools because they typically have a low cost for creation and can give you critical customer resources. Finding out what your customers want can help a startup raise funds faster.
Tech companies also use MVPs often because developing software—such as an app—is expensive. Why take a risk that could cost thousands of dollars when you can release a single feature and see if the idea sticks? Also, money saved in the beginning stages can be funneled into product development if customers love the MVP you’ve created.
Why MVPs Matter in Product Development and Startups
For startups and companies that rely on strong products to generate revenue, MVPs can give them the necessary information to build something after their idea is validated. They can provide a quick go-to-market strategy for startups that have investors itching to see their dollars at work by getting a product out into the open for customers to try—rather than taking months or years to develop a full-scale product launch.
In addition to idea validation, MVPs can also reduce business waste and energy. For instance, Dropbox, the software program that synchronizes files across multiple devices, started as an MVP. In an interview with Tech Crunch, CEO Drew Houston explains that Dropbox had a number of technical hurdles to overcome in order to be viable. Trying to share files across multiple platforms required deep integration in programs like Windows, Android, Macintosh, iPhone, etc., which would have taken massive work hours to pull off.
Instead, Houston made a simple, self-narrated video to show the features of his idea without creating a full product. “It drove hundreds of thousands of people to the website. Our beta waiting list went from 5,000 people to 75,000 people literally overnight. It totally blew us away,” he told TechCrunch.
As a result, thousands of users flocked to his website. Dropbox saved time by not launching a full idea without customer validation. This MVP of his idea also successfully tested user demand. The proof was in the pudding, so to speak, and Dropbox went on to be a highly successful tech company.
But is creating an MVP just as easy as making a simple video or a cheap product? No, not at all. In fact, there are a number of steps that go into creating the best MVP possible.
How to Build a Minimum Viable Product
Each MVP design is different for each business. However, because all MVPs are focused on uncovering customer information at their core, they generally follow a common build pattern. Here are some typical steps to building an MVP.
1. Research the Market
Though an MVP does help you with market research, you’ll also need to do some digging into customer pain points before you create something to solve them. It’s a bit of a chicken-and-egg problem. Start by asking questions about what issues you’re seeing in your markets. Maybe you’re in a large city and you hear lots of tourists struggling with navigation issues. Or, you might do some competitive research on other products in your area of expertise to see how you can improve. You could conduct a 1:1 interview to learn about what issues potential customers are facing or create an online survey, for example.
You need to find your potential customers and their pain points in this step, so you can begin to think of which features are necessary for your MVP.
2. Differentiate Your Idea From the Competition
While you might have looked at your competitors in the last step, now you want to hone in on what they’re creating in light of what problems you can solve. Are there gaps in your competition’s products where you can solve an issue? Is your market saturated with similar ideas? If so, how can yours stand out?
In a few words, you need to find out what makes your product different from the others. This key point discovery will guide your development process. This way, you can create an MVP that both solves customer pain points and doesn’t blend in with the other options. Too much similarity with the competition and your MVP won’t stand out enough to get picked up and tested.
From another angle, you’re trying to come up with a value proposition. What makes your product valuable to customers?
3. Prioritize Features
By this point, you likely have a number of potential features you want to include in your MVP to solve the customer pain points you’ve identified. Resist the temptation to solve every problem you find. Remember, you’re trying to create a minimum viable product, not a Swiss Army knife that solves everything.
To do this, make a list of all the features you and your team have come up with. Divide the features into three categories: high, medium, and low priority. High-priority features are those that solve the biggest problems or customer needs. Medium priority features might help solve the major problems, but they aren’t necessary in all cases. Finally, low-priority features are only nice-to-haves—bells and whistles that make your idea look good. Those can be discarded entirely.
4. Launch Your MVP
Now that you have a full list of core features, it’s time to launch your MVP. Make sure to only use minimal resources to do so, as you want low costs to maximize ROI. That said, you also don’t want to release a product that will fail for customers. That could cost you your brand’s reputation.
As part of the launch, it’s a good idea to gather a group of testers who can try out your MVP, either before or as part of your initial launch. They can give you valuable feedback that you can use in other product iteration steps.
Feeling overwhelmed or unsure how to launch an MVP that will actually bring you clear customer insights? Join a group of expert entrepreneurs and startup executives at The SUCCESS® Mastermind for coaching and advice.
Common MVP Formats and Examples
MVPs come in various types, styles, and formats. Here are some common examples to help you decide what MVP type will suit your goals best.
Core Feature Prototype
This is a stripped-down version of the full product, such as a basic app or website. It contains only the critical features the product or service requires to fulfill customer needs.
Example: Spotify’s initial MVP was a simple desktop app focused solely on music streaming. This allowed early testing of its core concept before adding features like playlists or mobile support.
Promotional Landing Page
A minimal landing page outlining the product concept can measure interest and collect user sign-ups or inquiries. Adding an email sign-up or other information-gathering system can also provide you with a potential list of test users later.
Example: Buffer used a landing page to promote its core service concept, gathering customer feedback and interest before the idea was even in development.
Short Concept Video
A short video showcasing the product’s purpose and functionality to assess viewer interest and engagement can help validate an MVP quickly. Especially in an age where video-focused platforms are becoming more popular (e.g., TikTok, Instagram, YouTube), this is an extremely inexpensive way to test an idea. All you need is your smartphone.
Example: Dropbox’s 2007 explainer video demonstrated its file-syncing idea, driving thousands of sign-ups before the product was fully built.
Concierge MVP or Manual Service Products
This option is designed to deliver the product’s service manually to simulate the experience that mimics what the automated software would do. This type of MVP format is perfect for tech companies developing an app, for example. It allows them to show off the capabilities of a costly idea (e.g., an app) without using resources and funds to develop it fully.
Example: Shoe retailer Zappos started as a concierge MVP, with the founder manually buying shoes from stores to fulfill online orders, testing demand for online shoe retail.
Crowdfunding Campaigns
Launching a campaign is a simple way to evaluate market interest and secure early funding from potential users. This MVP format is ideal for startups and businesses with investors.
Example: Oculus Rift’s Kickstarter campaign tested demand for VR headsets, raising millions and validating their concepts and features.
User Surveys
Collecting direct input from potential customers through questionnaires or forms to gauge interest and identify needs can give you insights into how a product or service would perform without actually delivering it. This method is especially cost-effective for small businesses.
Example: Slack used surveys during its beta phase to understand how teams used the tool. This helped shape its messaging and collaboration features.
Pros and Cons of Releasing a Minimum Viable Product
Depending on your business context, using an MVP might be a prudent idea. Or, it might be one that doesn’t quite fit. Here are some pros and red flags of MVPs to help you make that call.
Pros
- Reduces initial product spending: Instead of spending large amounts of capital upfront to create an ideal product, MVPs give businesses the opportunity to gather information with limited spending. Because they are creating a less fleshed-out product, it costs less and takes fewer resources to launch.
- Mitigates risk: Launching a full product not knowing how your customer base will react is risky and could put your profits at risk. Using an MVP allows you to avoid developing products that won’t make the cut with consumers.
- Gives early feedback: For startups, especially, getting feedback from customers early can help show investors progress in the marketplace. MVPs allow them to do so with limited buy-in.
Cons
- Requires high amounts of customer knowledge: To create a successful MVP, a business needs to know exactly what its customers need. This can require a large amount of focus on customer or market research. Some businesses might not be able to do this due to time and/or resource constraints.
- Carries the risk of reputational damage: MVPs are designed to launch quickly, but this can be a double-edged sword. If an MVP is created with sub-par features or fails in the hands of a consumer, a brand’s reputation could be damaged. If expectations that the product is still in development aren’t communicated clearly, this could also give consumers the impression that a brand doesn’t create quality products.
- Has the potential of being copied: Getting a simple idea to market as soon as possible is a strong way to get customer feedback quickly. However, it also gives the competition an idea to develop more fully. If a competitor takes your successful MVP idea and develops a full product off of it, they could end up taking your client base away from you before your product is refined.
When and How to Iterate Beyond the MVP
An MVP is a short-term launch to get important customer feedback before you scale to full product development. But what do you do once you have all that feedback in hand?
For starters, you need to analyze what consumers said about the idea. Was it positive, negative, or a mix of both? Are there any features that customers are looking for that you can add to the MVP?
If you received mostly positive feedback on your first iteration, it might be time to add more features to the product or enhance already existing ones to better align with customer needs.
If the feedback received was overwhelmingly positive, that could be a strong sign to build a full product as soon as possible. Clear signs of market demand can point to a strong need that only a fully developed product can fulfill. This means investing more resources and capital into the project and potentially moving on to more testing. In some cases, it may even be wise to branch out to new markets altogether to access a larger customer base.
Finally, if the MVP was a bust, that’s OK. All that means is the idea might not have been a good market fit, and it needs to be set aside. Choosing not to proceed with a poor project, rather than trying to rebuild it from the ground up, can save massive time and resources.
Making Your MVP Work for You
What is a minimal viable product? It’s something that could potentially take your business to the next level. While effort, research, and decision-making are necessary for creating an MVP, the results can be well worth it by what you gain. Whether it’s a hit that points to a successful full-scale launch, a growth process to help you continue developing your idea, or it’s a bust that helps you pivot to a new idea, there’s much to learn from launching an MVP. Weigh the pros and cons, consider your resources, and decide if taking your idea from concept to MVP is the right step for your business.
If you’re thinking of taking your MVP or startup idea to the next step, or want more resources on building a successful business, check out SUCCESS® Coaching. Our roster of expert leaders in multiple niches can help your MVP keep momentum while scaling into a full product or guide you through difficult decisions to abandon an idea altogether.
Running a business is always better—and more fulfilling—with others working alongside you.
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