The Importance of Creating an MVP for Startups
What is an MVP?
MVP or Minimum Viable Product is an earlier version of the product with minimum functionality and core features, created to be used by a few customers who then provide feedback on the product. The product is then moved to the full development cycle after enough data and inputs are gathered and analysed from the customers. According to the official definition, “The minimum viable product is that version of a new product a team uses to collect the maximum amount of validated learning about customers with the least effort.”
It is made for the subset of early adopters of larger target audiences which includes the general population. The concept developed from the five principles of the Lean Start-up Methodologies and is widely used by companies today. Although it’s called a product, it’s more of a process that allows developers to create a working model of the final product, test it, improve it and work on it over a while until expected outcomes are achieved.
What are the features of an MVP?
An MVP is intuitive and easy to use
It has industry-standard design and UX
It has enough features that support the core functionality, usually two or three.
There are different types of MVPs.
Landing page style that describes the product with an explainer video
‘Sell it before you build it’ style that presents a concept and generates funds to build the actual product
Single feature product that offers only one core functionality and tries to solve maximum problems with minimum effort
The ‘Wizard of Oz’ style creates an illusion of the product/services but delivers it manually as a test run
Concierge style means selling a concierge service to test if a similar product would be viable.
Depending on your start-up concept, you can pick any strategy to get started.
What are the benefits of creating an MVP?
For a start-up, it’s of paramount importance that the product idea/concept is feasible and functional to meet the needs of customers. MVP is the ideal way to test that. Here are a few benefits of developing an MVP for a start-up.
Testing and verifying the idea
To understand the market demands and to gain insights on what works for customers and what doesn’t, start-ups should first create an MVP. It kickstarts your whole idea by bringing in necessary inputs such as flaws in the design, usability, financial implications, and whether it solves the problem it is created to solve. It’s the first shippable product that goes out of the company, hence it’s not complete and doesn’t have 50-60% of final features. Yet it must have core features for testing, enough to find out if there is a demand for it and that it has the potential to outlast the competition later.
Save time, money, and resources
When a start-up creates an MVP, they’re essentially devoting minimum time, resources, and money, just enough to make the basic product. If it works and appeals to the users, more can be invested in the idea. It allows for a quicker release in the future as it enables clarity of vision, thus eliminating unnecessary workload for developers and designers. Start-ups who want to test with a minimum budget have the benefit of spending on a requirement basis and focus only on the core functions. This keeps the team dedicated to the checklist and no other embellishments. This approach also mitigates risk for the start-up in case if something goes massively wrong, course correction can be made at the very initial stage. You don’t need multiple teams on an MVP. A small team can get the job done, which can later be scaled after positive customer feedback. MVP gives the start-up to have a better UX design strategy for the final product as well.
Investment and funding for start-ups
The biggest names today started with MVPs including Amazon, Uber, Dropbox, and Twitter. Start-ups with a winning idea and a great MVP can generate next phase funding upon initial success. It requires minimum development, but if executed correctly, it can pique investor interest. But research shows that only 1% of start-ups can turn into unicorns. Along with a strong MVP, you need an equally good business plan and monetization as well as marketing strategies. However, the star of your start-up is an MVP because it’ll help you gain understanding and traction based on Build, Measure, Learn, the principle of Lean Start-up Methodologies. It is a feedback loop that helps you get the MVP out in the market faster and learn quickly from feedback, which ultimately saves money in long development cycles. Even if your start-up is not lacking in funding, there’s always the best practice of spending only as much as necessary. MVPs make budget management easier.
Reduced time to market
Competition is fierce in the start-up game and the market is always moving and reshaping itself with new ideas and products. If you want to get momentum and a solid grounding in the market, you need to be agile and flexible. Releasing an MVP before the full-fledged product is one of the most effective strategies to get a pulse of the market. Even if it’s to test the very core functionality of the product, developers can validate the idea by getting instant customer feedback, iterating the app in quick sprints. Once your start-up decides the Time To Market, building an MVP is the next immediate step.
Start-ups should have complete clarity of what they want the MVP to do exactly or else there may be wasted efforts and money without clearly defined objectives. Choosing the right types of MVP and investing in the right technology, tools, software architecture and design are equally important for a start-up to develop the MVP with the desired impact. Perfection that is achieved in a fully developed product is not exactly the goal of an MVP, nor should it be. You’ll have to postpone a grander vision to create an elementary, working model.