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MVP for Startups: Building, Launching, and Iterating Your Software MVP
However, very few people know what these applications looked like when they initially launched. It can be hard to imagine that some of the biggest platforms were once very basic websites. To grow to their current level, they needed plenty of strategizing, especially toward scalable growth.
According to a study published in Forbes, 29% of startups run out of funds before getting fully off the ground. What’s more, another study has shown that over 70% of tech startups fail because of unplanned scaling.
To prevent such a scenario, you need to plan all your operations around the product. Building an effective Minimum Viable Product (MVP) is a natural place to start.
In this article, we’ll take an in-depth look at Minimum Viable Products and present you with what you need to consider when building a scalable business.
In this article:
- What is the Minimum Viable Product?
- Why do you need an MVP?
- When to start working on an MVP for startups?
- The benefits of having an MVP
- 5 questions to answer before building an MVP
- Who should be involved in designing an MVP
- Most popular MVP Models
- Stages of MVP development for startups
- Best practices of MVP development
What is the Minimum Viable Product?
The founder of the “lean startup” methodology, Eric Ries, described the MVP as “a product which has just those features and no more that allows you to ship a product that early adopters see. The MVP is the earliest iteration of your product.”
An MVP (sometimes called the Minimum Marketable Product) contains only the features that are absolutely essential. It lets you test your business concept against its first adopters and provides you with invaluable early feedback. An MVP can come in the form of anything you consider the core of your business, from a single landing page to a detailed demonstration of your service.
Why do you need an MVP?
Naturally, when launching a product, you always hope for its positive reception.
In the early stages, you probably looked at preexisting data and spoke with industry professionals. However, the best way of knowing what potential customers think about your concept is asking them directly.
Releasing an MVP is a relatively cheap and highly effective way of collecting customer feedback. Best-case scenario, it can also lead to you getting financing or the product getting (hopefully) good press.
When to start working on an MVP for startups?
The best time to start working on an MVP is right when you pinpoint the exact problem your product can solve.
Once you know everything there is to know about the target market trends, you can start the software development process. An MVP is an early showcase of your achievements, and if presented correctly, it will increase your chances of achieving product-market fit and capitalizing on market needs. Potentially, you’ll also reduce your expenses on post-launch market analysis and performance updates.
The benefits of having an MVP
Aside from allowing you to course-correct your business strategy and get high-quality instant feedback on your key features, an MVP also offers the following benefits:
# Early testing and feedback
Collecting such feedback early will make deciding on the next steps easier. A well-developed MVP provides you with data on user interactions, pain points, and the overall potential of your product. The immediate nature of an MVP helps you access this data before the final product release date.
# Faster time-to-market
MVPs significantly cut your time-to-market down by simplifying development processes. Analyzing user data lets you identify your MVP’s essential features, address the most pressing issues, and develop your product faster. An MVP-driven business model also requires a significantly smaller amount of conventional market research, helping you save plenty of time and resources.
# Getting closer to developing a monetization strategy
Once you understand your product and users better, you can start fleshing out your monetization strategy. Depending on customer behavior and preferences, you can begin testing models like subscription-based or pay-per-use.
# Iterative development
An MVP lets you test your product and helps with its further development by providing relevant data to use instead of relying on artificial prognoses. MVPs allow you to take an approach driven by concrete and applicable data. This doesn’t have to be the last time you present your product early – developing multiple iterations or releasing your product in stages will let you roll out features depending on explicit and verified demand.
# Acquiring funding
If you’re among first-time entrepreneurs or are looking to attract investors to your early-stage startup, coming equipped with a well-built MVP can make a huge difference. According to a study by CBInsights, 75% of startups that raised more than $1 million were MVP-ready. Startups with an MVP were also shown to be ten times more likely to attract funding compared to those without one. An MVP can be a huge factor when talking to investors.
# Testing UX and Usability
Despite being a bare-minimum test of the must-have features, MVPs are perfect for evaluating user experience.
As a product grows, it’s easy to lose its initial scope. MVPs prevent you from overdeveloping your application and adding redundant features. Relevant customer feedback will help you better understand the user perspective and speed up further product development.
A recent study by CBInsights showed that 70% of startups fail after raising only 20% of their starting capital. In most cases, the cost-efficiency could have been improved by better planning and more research. Some startups put considerable funds into market analysis and product development without verifying market demand first. An MVP significantly reduces the chance of misallocating resources by backing market demand with hands-on feedback from real users.
We’ve seen it first-hand – an effective MVP can have a transformative impact on establishing a market presence. Our advice to entrepreneurs is to always focus on the user and those core functionalities which actually solve their problems. Remember, a strong MVP is not your end product but its early iteration; built to collect user feedback and verify market trends. COO, ASPER BROTHERS Let's Talk
5 questions to answer before building an MVP
Now that you understand the benefits of making an MVP, let’s examine how you can prepare for building one. The best way to begin the development process is by answering five fundamental questions:
#1 What’s your goal?
Tech companies often underestimate the importance of good planning. For instance, some software products are not designed with generating revenue in mind, and monetization has to be added in later. Although this approach seems reasonable in theory, transitioning from offering something for free to convincing people to pay for it presents a considerable challenge that most likely could be avoided.
To drive your business objectives with conviction, it is essential to understand the purpose and angle of your MVP and clearly define its group of early adopters. Identifying and answering customer needs is the foundation of a successful business with excellent customer experience. Prioritizing this aspect will give you a more straightforward path to follow during product development.
#2 What problem can you solve?
Although this one has become an almost textbook question, it’s imperative to get it right. Studies published in Harvard Business Review showed that the most significant factor behind failing startups was attempting to solve problems that didn’t exist. This is why having an initial understanding of your targeted market is essential when working on an MVP. Before settling on a solution, enunciate your potetcustomer’s needs and wants.
However, there’s always an exception to the rule. While it’s true you have to learn rules before you break them, doing so can lead you directly to innovation.
In a recent interview, OpenAI co-founder and president Greg Brockman said that after spending “months just writing down all the different ideas that [OpenAI] could work on,” they ultimately decided against confining their approach to just one area.
While carving out a profitable niche in Med- or Fintech was a safer bet, making it would postpone the AI revolution for at least a couple of months.
#3 Who will be using your product?
No matter how well you market it, you can never sell meat to a vegan.
Customer research is crucial to finding the early adopters of your product or service. To identify your target audience, it is important to ask yourself the following questions:
- Who would benefit from using your product the most?
- Are you focusing on a particular market or region? What similarities do those people share, such as demographics, motivations, or values?
- Do you have any direct competitors?
A lack of direct competition is not enough to prove your product’s market viability. It’s crucial to ensure that it delivers specific solutions to your potential users.
#4 What’s their end goal?
When selecting basic features for the minimum viable product (MVP), it is important to prioritize those that will bring value to paying customers. Having them in mind will help you tweak your MVP and make it attractive to more users.
- What challenges or issues does the target audience face?
- Which limited features can address these challenges effectively?
- Why would your potential user desire these features? Are there existing alternatives in the market that offer similar functionalities? If so, what makes yours inadequate, or what needs improving in the current product iteration?
#5 Is it all scalable?
When building an MVP, you must account for manufacturing costs and ROI. If your expenses significantly increase with scaling, you should opt against it and stick to hinting at future expansions instead of risking it all only to overdeliver.
The cost of scaling is strongly dependent on the nature of the product. If you’re making an app or a website, you probably only need plenty of man-hours and some extra computing power. But for an eCommerce platform, scaling may imply adding new warehouses and hiring more staff. Estimating the total cost of scaling will help you make the right decision here.
Who should be involved in designing an MVP?
The MVP process is a collaborative effort. It requires joint input from all the stakeholders and interested parties within the development process.
# Product Manager
Your product manager is tasked with determining the MVP’s vision, goals, and scope. They are responsible for coordinating the workflow between designers and developers and ensuring the MVP meets the established requirements.
# UI/UX Designers
Designers play a critical role in MVP development, as they are directly responsible for the user flow. They make sure that the MVP is visually appealing and intuitive to navigate while remaining true to the product’s character and following industry norms.
# Software Developers
Software Developers bring the technical expertise required to implement the MVP’s features. They work with software and frameworks dependent on the nature of the project.
Customer feedback is crucial to product development. You need hands-on user feedback to test your core features and eventually develop a successful product.
Most popular MVP Models
MPV models serve as strategic frameworks that guide the development and implementation process of an MVP. Each model brings its unique approach, suiting different business contexts and product types, and they’re favored for their effectiveness in reducing risk, saving time and cost, and getting valuable market feedback early on.
In the forthcoming section, we’ll delve into the most popular MVP models, their characteristics, benefits, and real-world examples to help you determine the best fit for your startup venture. Understanding these models is crucial as they can significantly influence how you shape your MVP and ultimately, your startup’s success trajectory.
A piecemeal approach to building an MVP is focused on introducing a product with minimal investment. Instead of beginning product development from scratch, the piecemeal model employs preexisting tools and solutions. Piecemeal involves incorporating other tech to create the foundation of the product. For instance, if you’re building an MVP version of an online store, you can leverage platforms like Shopify and eMarketplacer instead of building everything yourself.
An excellent example of a piecemeal MVP is one from Groupon. Groupon connects customers to local retailers, travel agencies, and restaurants. Their main selling point lies in their time-exclusive deals, offered at attractive prices for a limited time.
For their MPV, the Groupon team used WordPress with an array of third-party plug-ins for the back end. For example, when customers make a purchase, Groupon utilizes FileMaker to create a PDF coupon, which is then automatically sent to clients, along with a QR code, by way of an Apple Mail script.
# Wizard of Oz
The Wizard of Oz is an effective MVP-building method for startups offering a service, such as catering or flower delivery. Although your product may appear complete to your customer group, it is actually all you, working behind the scenes, controlling and adjusting everything. Besides saving money, the Wizard of Oz model presents unique opportunities for research. Working directly with your clients allows you to analyze their behaviors and preferences more closely.
Zappos is a perfect example of a Wizard of Oz MVP. The founder, Nick Swinmurn, took pictures of shoes from physical stores and displayed them online to gauge people’s interest in buying shoes without trying them on first. Today, Zappos is a household name generating billions of dollars in annual average revenue, and Swinmurn eventually sold it to Amazon for $880 million.
# Concierge MVP
If you were to start a new beauty-box service that sends samples uniquely suited to your age and skin type, a Concierge MVP model would be the way to go.
You can easily find volunteers interested in testing your product, and you begin testing by manually analyzing their data and matching them with appropriate samples. Once you confirm your product idea works, you can develop an application that automatically gathers user feedback, analyzes the data, and assigns suitable products. In short, a Concierge MVP involves manually validating your business model.
A well-known example of a company that started with this MVP method is Food on the Table. It’s a mobile app that asks for your food preferences and presents a list of recipes and grocery stores with the best deals.
Stages of MVP development for startups
In the process of MVP development, it’s helpful to understand the progression through several critical stages.
Each stage plays a crucial role in the process. They are not necessarily linear and often require revisiting as startups learn more about their market and users. The goal is to continuously refine and improve the product based on user feedback and market validation until a product-market fit is achieved. This dynamic and iterative process is at the heart of building a successful Minimum Viable Product.
# Ideating your unique value proposition
Once you’ve identified the problem and the solution, you will need to determine how you’ll provide it. At this stage, you must figure out how to differentiate yourself from the competition.
This unique value proposition (UVP) – the distinctive advantage that makes your solution stand out in the market – could be something as simple as a unique feature or as complex as a completely novel approach to the problem.
The discovery stage is all about validating your idea. Is there a real demand for your proposed solution? Is the market ready for it? Who are your target users? You can validate your idea through different methods, such as conducting surveys, interviews, and studying market trends.
At the end of this stage, you should have clear user personas and a validated idea for your MVP.
The discovery stage involves all the research and takes place before MVP development. This is when you identify your early adopters, their problems, and needs. Having at least a preliminary grasp of your target market is essential to building an MVP.
Market research can be a great aid in understanding market trends and scope; and pre-development, it’s the only one you have. By identifying the segment that needs your product the most, you can figure out how to tailor your MVP toward it.
Benchmarking is a stage often conducted parallelly with the Discovery stage, but it deserves its own emphasis due to its importance. It is the process of comparing your startup’s product or business processes with the best in the industry or those of the leading competitors.
Benchmarking can offer valuable insights into what works in the market and what doesn’t. It involves assessing competitors’ products, observing their strategies, and learning from their successes and failures. It’s not about copying what others are doing, but about understanding the market standards, user expectations, and identifying opportunities for differentiation.
Startups can use this information to determine their product features, user interface design, pricing strategy, marketing tactics, and other aspects. Benchmarking can also help in setting realistic goals and KPIs for your product.
# Prioritizing MVP features
At this stage of your MVP product development, you must identify your product’s most vital features. These will serve as the backbone of your early product.
Remember, the goal is to build a ‘minimal’ product. This means focusing on core features that directly solve the user problem and demonstrate your UVP.
To prioritize features, you can use techniques like the MoSCoW method (Must have, Should have, Could have, Won’t have), or the Value vs. Complexity matrix, which helps you identify the features that provide high value but are less complex to implement.
# Mapping out the user flow
To design an impactful product for your initial customers, you must learn to look at it from their perspective.
Once the features are set, you need to map out the user flow, from launching the application to accomplishing goals within your product. Consider critical tasks like account creation, cart completion, and product search.
Think about the user’s journey from their initial interaction with your product to the point where their problem is solved. Every step in the user flow must be thought out carefully to provide a seamless user experience. This involves designing a simple, intuitive path that users can follow.
# Prototyping and architecture
The next natural step is to develop your product’s base architecture. This process involves planning out all components and their interactions which you can then incorporate them into a functional prototype.
Part of the prototyping stage involves creating a visual representation or mockup of your product, which helps in getting a better sense of the final product. Tools like Figma, Sketch, or Adobe XD can be used for this purpose.
Simultaneously, you should also define the system architecture for your MVP. This includes deciding on the tech stack, database design, server setup, etc., based on the chosen features and expected user load.
# Building and launching an MVP
With your prototype and architecture in place, it’s time to start developing your MVP. Agile methodology is often favored in MVP development, as it allows for iterative development and continuous improvement.
Once your MVP is ready, you can launch it to your target audience. Make sure you have set up all necessary analytics tools to track user behavior and gather data.
At launch, consider implementing a digital marketing strategy or presenting an initial offer structure.
# Collecting and analyzing user feedback
The true value of your MVP can be assessed when you collect and analyze customer feedback.
To get insight into user behavior, you can use validated learning tools. Of course, A/B tests are the primary method of gathering various user stories, measuring success and user satisfaction, and evaluating your product’s performance. Analyzing this data will help you understand user interest and discover the features customers enjoy the most.
This iterative process of build-measure-learn is a crucial component of Lean Startup methodology and a vital aspect of MVP development.
# Reiterating Your MVP
As the poem goes, even “the best-laid plans of mice and men often go awry.” While your product may work perfectly during development, issues often arise only when active users test it. When it happens, you shouldn’t worry too much – after all, this is precisely what MVPs are for.
After collecting and analyzing user feedback, it’s essential to translate this information into actionable improvements. Taking note of what works and doesn’t to tweak your processes is the bread and butter of any business. The same goes for your product – you can improve it only through continuous critical evaluation.
The process of iteration involves making changes to your MVP based on feedback, testing these changes, and continually refining the product. These changes could be anything from adding new features, enhancing existing ones, fixing bugs, or improving the user interface. The goal is to better align your product with user needs and expectations, thus increasing its value proposition.
During this stage, be prepared for the possibility that your MVP might require substantial changes or even a complete pivot. Flexibility is key here, as the ultimate objective is to create a product that resonates with your target market.
Keep in mind, improving and reiterating your MVP is not a one-time process but a cycle that repeats until you achieve a product-market fit. The learnings from each cycle should fuel the next, leading to a progressively better product.
Best practices of MVP development
Figuring out the process of MVP development can be multi-faceted and challenging. To help you wrap your head around the concept and settle on priorities, we present best practices of MVP development.
#1 Optimize your data measurement
To gauge your MVP’s potential, it’s important to constantly measure how your initial users engage with the product. By keeping track of these metrics, you’ll gain invaluable insight into your product’s performance. This information will help you determine whether your product is on its way to market success or requires further improvements in functionality or marketing. Here are some essential metrics to consider:
- Sign-up numbers.
- Download and launch rates.
- Percentage of active users and user behavior
- Costs associated with acquiring new clients
- The lifetime value of clients
- Bounce rates
#2 Choose your team wisely
When picking a team to build your MVP, make sure their experience level and communication skills are on point. Consider their portfolios. Ensure that your team has experience working on projects related to your field. Your goal is to build a team that develops creative solutions and takes unique approaches to problems. Your development team should comprise only the most competent specialists with verified technical expertise. Agile development practices can be especially beneficial here.
#3 Make sure the UX is great
Since less is usually more in design, you’re in a good spot. To create a successful MVP, you must figure out how to streamline your user journey. Opting for a simple, straightforward design is usually the way to go in the very beginning since you want to focus on high functionality anyway.
Plenty will change in the UX before the final release, and there’s no point in showing off now. However, you want to avoid making any mistakes that could hinder your user’s actions and make their experience lacking or outright negative.
#4 Keep it focused
When developing your minimum viable product (MVP), it’s essential to focus on features that address an issue directly.
Including too many functionalities can make the product too convoluted, resulting in difficulties during development and testing. Keep your MVP simple and user-friendly, and make sure people can learn it without having to refer to external tutorials or manuals.
Priority lists of end users’ problems are your friends here. Remember that your MVP should come only with essential functionalities. You shouldn’t try including all the features of the final product.
Developing an effective minimum viable product can be immensely helpful in conserving resources. The early feedback it offers will maximize the odds of a successful launch while keeping costs at a minimum.
In business, leading entrepreneurs like Steve Jobs have credited MVPs as a critical tool in swaying public opinion. Even a maximum amount of theoretical data won’t help you predict your customers’ response to the final product like a practical demonstration of an MPV can.
So if you’re considering building a product, starting with a well-designed MVP concept is the best way to market success.
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