What’s a Minimum Viable Product?
Minimum viable products (MVPs) are small, working increments of the new product or service a business wants to provide, and they are helpful when studying the market. It’s the most basic, yet still functioning, action that can show the customer what the product or service is offering. An MVP is minimal, meaning there’s no extra features, and it’s viable, which means it can work as is. That’s a simple explanation, but the concept goes much deeper than that. There are a lot of things to plan and think about before you implement these methods into your business model.
4 things to consider for your MVP:
- Value proposition – What are you offering the customer? How will this thing improve or ease their lives, or what problem will it solve?
- Target market – This is a specific group of people the business wants to engage with, and get feedback from. What is the ideal customer like? What do they have in common with each other?
- Channel – How the target market will be reached. Does the ideal customer get most of their information from TV, or the Internet? What marketing styles test well with that demographic?
- Customer relationship – To receive feedback on the MVP, the business must somehow stay in contact with the customer. It can be through subscriptions, donations, or many other methods.
For something to be a minimum viable product, it must go through a least one rotation of the build-measure-learn cycle. The primary function of an MVP is to gauge the potential success of the new idea, before launching into full scale development. It is risky to start a new venture without testing it first.
What is the importance of an MVP?
The value of a minimum viable product lies in the data you receive from the ‘experiment’. The data is not based on conjecture, or statistics, it is instead based on observed behavior and real figures. An MVP’s purpose is to answer the most important questions about your business model, using the least amount of work and resources.
Key Attributes and Benefits of a Minimum Viable Product
- Cheap (relatively) – It is unwise to pour a lot of money into a test product. You’re aiming for something lean and functional. Leave the luxury features out for now.
- No waste – No waste of materials, time, or labor. It should be efficiently created.
- Meets a market need – How many useless things do we have in the world nowadays? If no one needs it, no one will buy it.
- Provides information – Perhaps the most important aspect in an MVP, you want to learn as much as you can about how it will fair when it’s fully developed.
- Expands user base – Having a new idea out on the market can bring new users to your platform.
- Possibility for future investors – Investors love to see what they’re putting their money into.
Examples of MVPs
This type of minimum viable product has a webpage that performs only the basic functions you want to test. Customers enter the landing page and then engage with it in a few ways. They could either place an order, sign up for updates, or something else.
Facebook started off as Thefacebook back in 2004, and was only a website for Harvard students to connect with others. Now it’s a company worth billions, with users worldwide.
An excellent way to generate interest is to create a video outlining what you’re selling in a step-by-step format. This is great because you don’t need to provide an actual product.
Dropbox released a demonstration video before they even had a product to sell. As a result, they saved big on their budget, and validated their business plan. They are one of the most successful users of a video MVP to date.
These can be any display of design, such as blueprints, sketches, or mock-ups. It’s simple software with equally simple functions. Over time, new features can be added and improved upon.
Etsy, a website for crafty people to sell their creations, started off with a lean, bare-bones website that allowed people to register, and sell their goods. Over time the design and features were improved, but the basic features of the website drew people in at the beginning.
Crowd-funding has skyrocketed in popularity through websites such as Kickstarter and IndieGoGo. The idea is simple: create a campaign using video, or other demonstration, and people can donate money to your project for development if it interests them.
Fidget Cube, a handheld anxiety relieving device, received $6.4m in funding from Kickstarter, making it one of the most successful crowd-funding campaigns ever. Their original goal was $15k!
As the name suggests, this kind of MVP is a service that caters to the customer using a personal service. To test how the service would work, a human provides the service to the customer themselves, instead of using software.
Amazon is a good example of this service that became incredibly successful. Jeff Bezos started out by placing books for sale on his website, and when customers placed an order, he bought the book himself and shipped it to the buyer.
This kind of MVP uses functions and software that already exist elsewhere in your business infrastructure. By combining them in a different way, and adding a few new things, you can create a completely different user experience.
Uber, the multinational ride-sharing app, used this method to create UberEats, where customers can order food from their favorite restaurants to be delivered right to their door.
Wizard of Oz/Manual-first
Less whimsical than it sounds, a Wizard of Oz MVP is one that gives the appearance of a finished website or app, but in reality it’s just a small team of people working behind the scenes. This type of MVP is similar to the concierge type, because they both have a human doing the work.
The most popular example of this method is Zappos, an online shoe company. The creator, Nick Swinmurn, took pictures of shoes and posted them online to see if people would buy them. Thankfully, they did, and now Zappos provides an online shoe store to millions.
A software prototype is a basic, functioning application that can be used. The prototype is only made up of the core functions, and other basic features. Prototypes and MVPs are similar, but MVPs focus on a larger audience than traditional prototypes.
Spotify started out by having a closed beta test, meaning it wasn’t open to the public. Once their business model proved to be a hit in the beta phase, they moved forward to launch. Now Spotify has over 130 million subscribers.
How to Implement an MVP
Your minimum viable product will look different than someone else’s, but there are some steps that you can follow, no matter what your goal is. To increase your chances of success, you should plan your business model thoroughly and carefully.
- Market Research and Finish MVP Design
Close examination of the market is crucial to your venture. Is this needed? Is it going to be better than similar products or services? What sets your company apart from all the others who are doing the same thing? These questions and many more have to be answered.
A helpful strategy to use when finalizing your MVP is the Business Canvas Model, which is an outline of all the major components you should consider. It includes things such as key resources, activities, and partners; delivery channels, cost structure, and potential revenue streams.
2. Focus on Functionality and Basic Features
A good MVP does not contain all the benefits and features a finished product will have. You must decide what are the most important aspects to include in the MVP, and ideally, they’re the ones that will give you the most information about the market.
Success doesn’t happen overnight. There is a lot of trial and error that goes into creating a flourishing business, and MVP creation is no different. This cycle is straightforward: build the MVP, measure the data through customer feedback, and then draw conclusions based on the results. Learn as much as you can from your MVPs, and use that knowledge to improve the next time.
Are you having trouble making a budget for your next MVP? Blocshop can help! Check out our step-by-step tips for how to allocate your software budget here. We can help bring your MVP to life, as well as create custom software for your ongoing projects.