Many startups waste precious time and money by working in the wrong order: they want to perfect the product before they establish the viability of the product concept.
Many app entrepreneurs start with what they think customers want, argue over what they think customers value, and, after months or years of hard work, spending tens of thousands of dollars and build a product only to find that customers couldn’t care less about it.
So how do you avoid falling into this trap? Do things in the right order: use MVP.
What is the Minimum Viable Product (MVP)?
A Minimum Viable Product (MVP) means building a product with basic yet necessary features that allows you to release it to the market immediately. In other words, It is the approach of the first building and launching an app with a minimum set of features, with the primary purpose of gaining user feedback.
Startups can minimize risk by creating a Minimal Viable Product (MVP).
A Minimum Viable Product does not eliminate the risk altogether but maximizes your return on the risk you are taking.
The term MVP seems to be coined by Frank Robinson of Sync Dev in 2001. He defined MVP as that unique product that maximizes return on risk for the customer. It was Eric Ries who popularized the term in his book The Lean Startup.
To appreciate Eric Ries’ definition of MVP, you first need to understand the ‘lean startup’ principle and the concept of validated learning.
Lean Startup Principle: MVP
According to the lean startup principle, the main thing that differentiates startups from big companies is that in a startup, the viability of the product and business model need to be proven for every product. The initial focus is on learning and proving viability, not on profits or revenues, like big companies.
Learning is validated by measuring data, and accelerated by applying that data as the product is built. Ries called it the “Build-Measure-Learn loop.” According to him, “the minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning with the least effort.”
As an example, Ries notes that Zappos founder Nick Swinmurn wanted to test the assumption that customers were ready and willing to buy shoes online. Instead of building a website, holding an inventory and marketing it, Swinmurn approached local shoe stores, took pictures of their inventory, posted the pictures online, bought the shoes from the stores, and shipped them directly to customers. Swinmurn deduced that customer demand was present, and Zappos would eventually grow into a billion-dollar business selling shoes online. (By doing this, the company grew and chose to focus on a new purpose, which was Delivering Happiness. These guys understood what their Live Bigger dream was, and refocused to make it a reality. In his book “Delivering Happiness’, Zappos CEO Tony Hsieh shares how focusing on “Delivering Happiness’ as the higher purpose helped him achieve success in business and life.)
Some simple examples of MVPs include
- AngelList: AngelList is a marketplace that connects startups and investors. The problem they’re solving is that it’s hard for both sides of the marketplace to find each other. To test and prove their assumptions, they created an MVP: they made manual email introductions to startups looking for funding and investor looking for investments.
- Uber: The MVP version of Uber, which is now the fastest-growing app in the world, was launched in 2010. The app simply allowed the user to find drivers. It didn’t have any fancy features you see today like fare splitting, rewards, etc. Also, there was no app for drivers. In the early days of Uber (Ubercabs), Uber’s CEO Travis Kalanik himself was cold-calling cab drivers, met them and signed them up
Acquiring the MVP mindset
You need the right mindset to build the MVP version of your app. If you are a perfectionist, then prepare yourself now, because you won’t be creating the perfect app. The goal is to release a product as soon as possible and to learn what you need to learn. Accelerated learning should be your #1 objective, and MVP is your best method for achieving this end.
One of the common concerns associated with MVP is that releasing an imperfect app too soon will alienate customers, and you’ll lose them forever. This concern assumes you already know who your customers are, how to reach them, and that they care about your product so much that they would be turned off forever. The good news is this isn’t proving to be true; most product startups are taking the MVP path, and success has not been shown to be hampered by early versions.
The benefits of releasing the first stage of an app fast, without its bells and whistles, are quick feedback, knowing what your customers really value and test all your assumptions. It’s important not to get caught up in details of branding, cosmetic bugs, and the like while launching your MVP. You must think big for long-term, but think basic for the short term.
MVP Benefits
Having fewer features allows you to:
- Test your assumptions about the product and market with minimum investment
- Get the product to market faster
- Reduce wasted time and money in building the wrong features
- Reduce development, quality assurance, and customer support costs
- Make learning easier
MVP Assumptions
- Building a product that is new to the market. Not knowing if demand exists for the product.
- Having a great team to build and sell the product’s vision.
- Following a Build-Measure-Learn loop by implementing analytics to gather data and make changes to the app quickly based on that data.
MVP Challenges
- The founder’s passion for the idea and the team member’s pride in their knowledge and experience stacks one idea on top of another, resulting in a big features list for the MVP. You need to be discerning and say ‘no’ or ‘later’ to some good ideas.
- It’s difficult to choose one segment of your customer base to test. Your end product might fit a wide swath of customer types, but you need to focus on one segment for the MVP and build to their preference. Similarly, amidst the growing number of platforms and devices, (ios, android, windows, web) you must limit the MVP to one or two platforms.
- The challenge is to build the smallest product but at the same time provide an enjoyable customer experience. What is the minimum user experience your customers would expect from your app? How the app works are as important as or more important than what the app does. App users are used to great apps. MVPs, though still small, need to be built to an excellent standard. Users won’t use apps that aren’t easy and intuitive to use.
Your focus is to provide the most important features and functionality to show the user what is possible and get feedback that teaches you about your product viability.
MVP is not necessary for every startup. For example, your app idea could be based on an existing app and making it better. You already know there is demand for the product, and your strategy may simply be to create a superior product and offer it at the same or cheaper price. In such a case, MVP may not play a significant role, and you may have to create a full-blown product with all the bells and whistles. You have to know what you know as facts and what your assumptions are. MVP is more useful when there are more assumptions.
Image from Fast monkeys blog.
Conclusion
Equipped with the right understanding of MVP, you can minimize your risks and maximize your investment. We also highly recommend these 2 books, “Lean Startup” by Eric Ries and “Hooked” by Nir Eyal for all the aspiring app entrepreneurs to gain a deeper understanding of MVP and many other valuable startup principles.
Written by: B Kris, Founder – Appomate.
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