What do Uber, Instagram, Facebook, and Twitter have in common? They all used a Minimum Viable Product (MVP) approach to build features and test their hypothesis. They gathered customer feedback to evolve into a fully mature application over time. An MVP is a releasable version of a product that supports minimal yet must-have features. An MVP helps enterprises to learn how their ideas can benefit users.
You must be wondering how MVP was born. Nick Swinmurn introduced the concept of MVP to the world. It all started when he was unable to find his favourite pair of shoes at the mall. He decided to manufacture and sell shoes online. Without conducting thorough market research, he launched an e-commerce website to sell his products. The MVP approach helped him test the hypothesis. Later, when his products became famous, he turned the approach into a fully functional business model.
According to the University of Toronto, the failure rate of new products in the retail industry is around 70-80%. The failure rate is more or less similar across all the sectors. According to Clayton Christensen, about 95% of new products fail. Funding is not the only reason behind the failure. There are several reasons for a product failure. A product failure could result from market viability, lack of clear business, or marketing strategy. Therefore, it is necessary to create a go-to-market strategy if you want to avoid common product failures and achieve success in a competitive environment.
What is an MVP?
As the name suggests, an MVP is a basic, releasable, and working model of an application that supports minimal yet must-have features. It helps enterprises gather information about customers without investing too much time and effort. MVP is an alpha or beta launch of a product that helps in testing the product and checking the product-market fit. It attracts early adopters, decreases time to market, and helps in understanding the requirements of customers. It also helps enterprises boost their confidence and evaluate whether their product can survive in the highly volatile market.
After product launch, enterprises collect customer feedback, identify and fix bugs, and launch new features suggested by alpha or beta customers. An MVP approach does not encourage fixing all the problems at once. The idea is to maximize learning and minimize development costs. An MVP is not just an experiment. It allows enterprises to gather customer feedback and suggestions. It can consider those suggestions and launch a better version of the application.
An MVP plays a significant role in the success of a business idea. Therefore, an enterprise must give the technology stack (tools, language, framework) a clear thought and ensure they choose the right technology stack for MVP. Choosing the right technology stack ensures high performance, easy scalability, and flawless user experience. Tech stack also determines whether you should go ahead with the development of your application or should start from scratch with a new architecture or framework. Choosing the right tech stack is not as easy as it sounds. You must do a thorough analysis before coming up with a decision. There are several factors that you must consider while making the decision, such as time, cost, number of users, scaling requirements, security, and budget.
There are several advantages of MVP. Some of them are as follows:
- MVP allows early market entry.
- MVP helps in testing business ideas on real customers.
- MVP also allows continuous improvement of the product with the help of customer feedback or suggestions.
Purpose of an MVP
The purpose of MVP is to launch a new application with a minimal budget and reduce its time to market. MVP is the version of an application with minimal yet must-have features that demonstrate the business idea of an enterprise. Eric Ries defined MVP as the version of a new application or software that allows entrepreneurs to gather information about the early adopters with minimal effort. It is a process of launching a new application with primary features to test how the target audience can react. The actual full-fledged application is built after gathering customer feedback.
MVP approach is all about striking the right balance between customers’ expectations and your offerings. MVP helps entrepreneurs target a specific group of people (target users), implement the ideas based on experience, and save time and effort.
Are you still wondering why you should build an MVP? Take a look at the following reasons:
Deliver value quickly - An MVP allows you to deliver value to the end-users. Enterprises can gather early feedback that helps in minimizing development costs.
Less resource wastage - An MVP allows you to gather data and learn about customer behavior and market trends. You can modify or remove features efficiently without wasting resources.
Crafting an initial model - It is the first step towards giving a shape to your idea. It offers several discussions and brainstorming sessions to identify the core features and functionalities that you should target.
Finding out the flaws - This step allows you to test your idea on a specific group of people to understand the shortcomings of your product.
It prepares you to start your journey - An MVP prepares you for the future stages as well. Without an MVP, you would have to spend a lot of time and effort researching the market and understanding the target user. By launching a beta version, you can gather customer feedback and develop a full-fledged application.
The whole purpose of MVP can be broken into two components:
Marketing strategy
The marketing component refers to identifying the best sales strategies and the social media platforms that can increase lead conversions. You can conduct surveys to determine the marketing approach that can sell your idea.
Proof of concept
The proof of concept component is the technical aspect of an application. With MVP, you can install must-have features that become the ultimate selling point of your idea.
What are the benefits of launching an MVP?
How did Uber, Instagram, Facebook, and Ola become so popular? They started with something much simpler than what they offer today. Their success is a result of years of research and their efforts in developing services that fulfill customer requirements. MVP is the version of an application that allows you to identify the problems of your users. It aims to offer immediate value and reduce the cost and development effort.
Some of the benefits that you can get by launching an MVP are:
Faster Go to Market
As MVP encourages you to build your application in multiple iterations, it allows you to go to market faster and release features in a short time interval. It also allows you to modify your development stages as per the user feedback and signals from the market.
Informed Marketing Strategy
MVP is all about testing what features are gaining more attraction and what is not. It is more about understanding the market demand rather than selling products or acquiring more customers. Enterprises sometimes assume that their application satisfies a specific user group. This might not be true as either the need does not exist anymore or a similar solution already in the market addresses their concerns. MVP empowers enterprises to test the market demand of their application, discovering if the potential user will subscribe without investing much effort, time, and money. Based on market needs, enterprises can either take a different approach or modify the existing product.
Launch products with the basic functionalities
You can launch your MVP with all the basic features. These features address the pain points of the customers. An MVP allows you to test your hypothesis. It reduces the time-to-market and helps you to gather customer feedback that you can use to improve your product.
Acquiring user base
An MVP allows you to gather early feedback. So, do not get discouraged if you receive negative responses from your users. Instead, you can use their suggestions to improve your product. Machine learning and AI can help you discover user behaviour. You can use these insights to understand how users interact with your application. These insights can significantly help you improve your product.
Launch your products quickly
An MVP is a version of an application with a minimal set of features. Launching an MVP reduces the product’s time-to-market. You can evaluate customer feedback, develop features and release them in the market.
An iterative approach to improving the product over time
An MVP allows you to determine the expectations of the users of your products. You can also determine the flaws in your product. This information plays a significant role in improvising your product further. You can use these insights to make informed decisions, identify the features you should add, identify the features you should remove, etc.
Cost efficiency
As mentioned earlier, successful products are the outcomes of years of research and development efforts. These products undergo multiple modifications. In the beginning, you do not need to invest a lot of money in developing your product. You can only keep the fundamental features in the MVP. As you start acquiring more users, you can start investing more money in developing the product.
How to build an MVP
Here is a list of five good practices to build a successful MVP:
Identify the business needs and conduct market research
It is the first step in creating a successful MVP. Identify the business needs that the MVP approach should meet. Identify the factors that address customer pain points and bring value to them. Products do not achieve success by accident. They achieve success by solving real-world problems. Therefore, you must conduct thorough market research to understand the customers pain points. Conduct surveys to gather as much information as possible.
Your product must add value to the life of your customers
You must have a clear understanding of the product that you are building. You must ask yourself some questions: Is your idea unique? What does your product offer to the customer? Does your product address your customers’ pain points? Why should customers invest in this product? While developing the MVP, you must pay attention to these questions.
Map out the customer flow
Development is a crucial stage of building an MVP. Keep customers at the center of the development process and look at the product from the customer's perspective. Map out the customer flow focusing on the usability of your product. Mapping customer flow ensures that you incorporate each key point while evaluating customer feedback.
Determine the essential features
The next step is to write all the features that can benefit your customers. After listing all the features, you can divide them into different categories: essential, nice-to-have, low-priority, etc. This division helps in identifying the bare essentials for your product. The MVP must showcase what makes your product unique.
Launching the MVP
It is the last stage of building an MVP. After you have identified the essential features and the customer requirements, you can finalize your MVP. An MVP is a releasable version of your final product that fulfils customers’ needs and solves their problems. Therefore, the MVP must be simple, engaging, and suitable for your customers.
Mistakes you should avoid while building an MVP
Launching an MVP using the right strategy will ensure a good beginning for your start-up and help to avoid failures. Research shows that most start-ups fail because of a lack of confidence. Some of them fail because their ideas are not unique and do not benefit the customers.
Here is a list of mistakes that you must avoid while building an MVP:
Focusing on low-priority features
Before developing the features, you must know the aim of your product. Conduct thorough market research to identify the pain points of customers. Once you have a good understanding of customers’ pain points, you must ask the following questions to yourself:
- Can your product solve the problems of your customers?
- Which feature will benefit your customers?
You must target only a specific group of people in the early stages. Find the pain points and prioritize the core functionalities.
Key Questions to be asked when building an MVP
Ignoring the Right Technology Stack
Have you chosen the right tech stack? A tech stack is a set of software, programming languages, and framework that you use for building an application. Tech stack directly affects the user experience and plays a significant role in determining the performance of an application. Choosing the wrong tech stack can also delay product market launch. Selecting the right tech stack saves cost and time for building a minimum viable product. Therefore, you must pay attention while choosing a technology stack.
Insufficient scalability
Is your product scalable? Imagine you have identified all the necessary features, and you have finalized your MVP. But, you do not know your next step. What if your product makes a breakthrough in the market and you start getting more and more users? Do you have enough resources or a plan in place to handle the unexpected load? Many start-ups get busy developing more and more features but often forget to think about their scalability. Scalability is a crucial aspect that determines the growth of your business. Therefore, when launching a product, you must release a product that is scalable and can fulfill future requirements.
Ignoring analytics and user feedback
Gathering feedback and meaningful insights is a crucial part of an MVP development process. To deliver an excellent product, you must give top priority to analytics and customer feedback. You must make your decisions based on the feedback and suggestions of your customers. Analytics can help you understand your customers. You must pay attention to factors such as customer retention rate, active users, the time they spend on your application, etc.
Examples of MVP
Here is a list of some businesses that started with a small idea but made it big in the market:
Facebook was initially launched to connect school and college students with their friends. The objective was to offer them a social media platform where they could post pictures and send messages to their friends. It became a huge hit and today, Facebook has over 1.3 billion active users.
Amazon
Amazon entered the market as an online bookstore. People started buying books online at reasonable rates. Later, when they started gaining more popularity, they established their presence in the retail market. Today, Amazon is one of the most trusted e-commerce platforms, serving millions of customers.
Airbnb
Brian Chesky and Joe Gebbia, who could not pay for their apartment, came up with the idea of renting a room in their apartment. They started by placing a mattress in their living room. Later, they created a website and started looking for people who travelled with a minimum budget. Now, Airbnb has more than 100 million users.
Conclusion
MVP is an approach centered around testing the product to determine its market fit. In this approach, enterprises identify their assumptions, find the smallest possible experiment to test those assumptions and use the results to drive the development stages. The following are the key takeaways:
- Do not offer all the features at the beginning.
- Acquire more and more users by offering the basic functionalities.
- Keep improving your product based on customer feedback.
- Focus on the core functionalities and implement the right MVP approach.
Looking to enhance an existing app, build a new one, or test your idea with an MVP? We’ve got you covered at each stage of the development life cycle. Reach out to us at business@qed42.com to know more.