What does MVP mean and how can your company take advantage of it?
What does MVP mean and how can your company take advantage of it?
TRIARE helps businesses test their market fit. Our team guides you with understanding users and the problem, creating the minimum viable product, and analyzing the result. We cover all stages of development and have all necessary specialists for doing this.
What is a “Minimum Viable Product”
Every startup company would like to maximize profits from the very launch of a product. It is why aspiring business people strive to create a finished product right from the beginning. But it is risky since both money and time may be wasted.
The solution to this problem is simple: do not design expensive products, rather offer the market a minimum viable product (MVP). Learn what it is and how it can help your business in this article.
How Do You Define Your Minimum Viable Product?
Co-founder of SyncDev consulting company Frank Robinson coined this term in 2001. Simply put, an MVP is a product with just enough features to draw in early adopters and validate a product concept. In sectors like software development, the MVP can assist the product team in gathering customer input as soon as possible so that they can iterate and enhance the product.
However, this definition is oversimplified and may miss the very essence of the concept on several levels. Here is a comparative table of misconceptions and real facts about the MVP definition.
|MVP development is just for startups.||While MVP is a great option for startups, it also helps established businesses. With MVP, they can reassess the market and analyze new user reactions to an idea.|
|A minimum viable product takes little time to launch.||The speed of developing a concept in this case is greatly overestimated. MVP allows for reducing the time needed for creating an operational product, but still may take a month or longer.|
|MVP requires minimum to no cost of development.||Although bootstrapping is an option, you still need a business-specific solution. This requires a team of business analysts to evaluate risks and opportunities, a designer to offer a simple yet compelling UI, and developers to deliver a working solution. Otherwise, customers will neglect it, and you might never know if it was a worthy cause.|
|MVP attracts customers and money.||MVP is just the beginning of the journey, so don’t get your hopes up for much. Only after many iterations and refinements, will you have lots of customers and money.|
What are Examples of the Minimum Viable Product?
MVP allowed the majority of the world-famous startups to build up a customer base, test the market, settle in, and prove the viability of their idea to potential investors. It wasn’t until the next stage that they were able to add new features to the product and continue to build on the success.
Let’s look at two typical examples that prove the effectiveness of MPV:
- Yahoo! The company’s minimum product was a simple Web page with a list of links to popular sites. And when the site attracted traffic and popularity, it began its evolution and development. Today it is the world’s second most successful search engine, with $5+ billion in annual revenue.
- Spotify. Developers took advantage of MVP app development. They stripped away the details and created a very simple prototype. They loaded music into the program from their laptops and played it back repeatedly. No one had questions about copyrights, interface, app creation, or usability. First, it was necessary to introduce people to streaming technology.
Potential Costs of MVP
The cost of an MVP can vary, so it is important to plan the initial budget. To do this, you need to understand what tasks are set and what factors influence the costs.
Idea. If you already have a thought-out business plan, you don’t need to worry. However, in other cases, you might need to use consultancy services to help shape it.
Analysis. If you can gather all the necessary analytical data yourself, you will not need to bear any additional costs. You should consider the target audience and study their needs, objectives, problems, and wishes. It is also worth analyzing the competitors and the general situation in the market.
Design. This step allows for a great possibility to save money. Although the design may be simple, the application should be usable and functional.
Development. It is possible to choose a simple tech stack that will help to implement the conceived ideas with little cost. But in case powerful tools are being created at the start, the cost of MVP development will automatically increase.
Why should the MVP work and bring value?
Once we’ve figured out what MVP means, it’s time to get into the details of what value this approach can bring to your business.
- The MVP method allows you to accelerate your product launch because a company only needs the essential features to start getting real feedback about the idea.
- MVP allows you to reduce the risk of major financial losses in the event of a failed product launch.
- This concept helps reduce development costs by prioritizing important features and identifying non-essential functions.
- MVP can be used to validate the feasibility of an idea and test product hypotheses with real data.
- MVP gives the opportunity to take a market niche and attract investors ahead of competitors.
- Accelerated bug finding, and internal product testing are also benefits that MVP-approach offers.
- Many companies build a user base before a full-scale launch with the MVP.
- MVP helps identify trends that can be used in the development of the full version of the product in the future.
In a nutshell, a minimum viable product
can save time, money, and effort.
So, it is worth it for both startups and for full-scale to use this powerful tool to launch a project very quickly and get its first results. You can find more information on where to start with MVP in this article.
Prospects for scaling the MVP
Having created and launched a minimally viable product or MVP, you’re now ready to create a scalable product that satisfies a wide range of consumers. Next steps may include comprehensive Web or App Design and technical maintenance. Both of these stages require highly qualified professionals, an extensive budget, and a significant amount of time.
Going from startup to large-scale growth is a challenge you might need a hand with. Our team will study your idea and outcomes after MVP, help you build a scalable business model, and bring a fully-fledged product to the market. We offer a vast list of services to make your successful MVP a prosperous long-term business.
Minimal model as a start for scaling
On one hand, a rapidly growing product needs to justify its value to the consumer and move from MVP to the next version. On the other hand, it is necessary to save on technology and product development, so that growing volumes allow increasing profits by multiples.
Scaling up is a responsible stage in the development of a startup, and you should prepare for it progressively. It is best to make a checklist that covers various areas of your business – MVP software development, team, economics, marketing – and move forward with it.
Such a checklist might include the following points:
- You have a business model and a working MVP in the marketplace. You have customers, their feedback is positive, and you are working on the negative comments.
- There is an established team: the key people have been hired, and there is an understanding of how the startup will grow further and what other employees will be needed. Your company has resources for hiring these people.
- The project’s unit economics have been calculated, and the main marketing channels have been tested. The economics of the project are converging and you know this will hold up when you scale.
- The design is ready to be taken to the next stage. The best and most cost-efficient idea for this is to get a custom booking app. It will help you streamline the business process and prepare it for scaling.
- You have the support of stakeholders and investors.
- Your plan B is ready. You must understand what can go wrong and what to do in each scenario.
Why are MVP not used to test business ideas?
When it comes to testing an idea, the MVP may not be as effective for several obvious reasons. In general, they can be summarized as follows:
- The idea creator may be too visionary and want to launch a popular and profitable product immediately.
- Sometimes user feedback can be biased because customers themselves occasionally can’t make up their own minds about what they want.
- Creating an MVP might entail too many expenses at the initial stage.
In fact, an alternative to all this, if you want to test your idea, is the MVT (Minimum Viable Test). It involves identifying your hypotheses about the market and creating tests that focus only on those and not on the long-term vision, customers, company, or product development.
What is the Purpose of a Minimum Viable Product?
One could say that such a product practically tests working hypotheses, allows you to implement an idea, etc.
The idea of MVP development for startups is that you basically create a simplified real-world solution to be offered to customers. Next, you just observe people’s reactions and refine your product or fix it.
Besides, you’ll be able to identify and understand your audience. Determine if clients need your product and how they will use it. Let’s say, MVP allows you to find out what fits the company’s target market and what doesn’t.
Typical errors in the development of MVP
In a study of more than 100 failed startups, CB Insights found that the main reason for their failure was a lack of demand (42% of cases). Almost half of these startups spent months or even years creating an unwanted product. However, there are a number of other mistakes that are made in creating MVPs:
|Perfectionism||Implementing a lot of features beyond the core ones delays development and increases the cost of the product. In the end, everything may be in vain if users don’t need it.|
|No prototyping||Skipping prototyping can cost a lot in the long run. It is an important part of the creative process and will lead to more reliable designs.|
|Irrational allocation of resources||This works both for cheaper development (the product may be too raw) and increasing the cost (unnecessary expenditures on unnecessary functionality).|
The MVP is a quick and cost-effective way to test your hypotheses and find out what customers think of your solution. The MVP is a mindset for bringing a product to the market. The principles of developing an MVP are the same for the world’s leading enterprises as well as for the entrepreneur who believes in the revolutionary nature of his idea.
Avoid diving headfirst into development and investing everything you have. Instead, do a detailed analysis, add moderate functionality, and keep the team focused by dividing development into a small series of tasks. Also, don’t forget a simple formula: test, implement, review, and test again.