Here’s a very interesting but unflattering statistic. Out of every 10000 trailblazing startup ideas with world-changing potential that meet an investor or a VC, only 2 manage to loosen their wallets.
We know, that’s a crude way to put it.
In simpler terms, getting funding for your startup isn’t as simple as it appears to be.
VCs and investors are more likely to identify risk than an entrepreneur who’s deeply in love with their own idea.
That’s precisely why having a Minimum Viable Product or an MVP app before you seek funding answers some of the most critical questions that investors seek answers for.
If you are still on the fence about creating an MVP before fundraising, then here are a few reasons why the MVP might be your ticket to a smoother funding experience. We validated this with multiple founders who worked with Ideaction.io.
A Fully-Functional Prototype with Minimum Resources
When we talk about startups, almost everybody talks about the billion dollar ones that are crammed with features today.
There’s FourSquare, AirBnb, JET, DraftKings and Uptake that’s basking in the glory.
But if one were to rewind the clock and go back to their first iteration, the apps would seem like primitive shadows of their current self. That’s because they tested the waters with a fully-functional prototype with minimal but solid features.
In the early days, Foursquare just let users check-in to a location and offered badges for completing different levels of check-ins.
The first iPhone didn’t even have a camera and you couldn’t create a folder in it for some reason.
For an investor, a lean but functional MVP app lets them feel the product and touch it before they consider investing in it.
Your First Customers
By releasing a product that your customers can use from the first stage itself, you minimize your time to market and receive firsthand feedback from the early users.
This is a win-win situation for you. It shows you your products from your customers’ perspectives, something that’s lacking until an MVP is launched. Secondly, this also brings you your first paycheck.
If your idea is right on the money, you can pitch it to an investor with a blueprint for timely scalability and the possibilities that it holds. Else, you can go back to the drawing board and rework some of the features that may need improvement.
If it fails, you still save on time, resources and money that you’d have otherwise wasted to build a fully functional product that nobody needs.
The Most Critical Element: The Pain Point
One of the most critical elements of a successful startup is the early identification and analysis of customer pain point.
Unless you have unabridged customer feedback and early indicators that your product is solving your customer’s most devastating problem that they are motivated to pay for, you have no product to sell to an investor.
The MVP app answers this very question in the least amount of time and resources. By the time you meet an investor, you already know the answer to this question and have modified or tweaked the product (multiple times possibly) to meet the expectations of the customer.
Why You Must Build an MVP App
An MVP is not an assurance that you will have investors queuing up. Instead, consider it as a testing ground or a validation for your idea. It may or may not work. But if it does, you maximize the opportunity of getting funding.
