Feb 21
Minimum Viable Product for Startups
I’ve been thinking about MVP (Minimum Viable Product) for some time now and it’s relation to startups. In the reading community I belong to, someone asked this question a few days ago - "explain an mvp to me like I’m 8 years old". That question has led to this writeup.
It is the minimum functionality required to validate you are heading in the right direction. According to Product Plan, it is a product with enough features to attract early adopter customers and validate a product idea. Another explanation by IniOluwa Karunwi, it is the smallest part of the larger vision of your product that you can sell and acquire users with.
One of the advantage - the biggest infact of building an MVP is that it helps you validate your idea quickly to decide if it's worth pursuing further and how to modify it if its worth pursuing. MVPs are only effective when the market feedback received is listened to.
Startups arise around the idea that a proposed product will solve the underserved needs of a particular market segment and will be readily accepted by that market. While proposing this product idea, the founder often expect the product to deliver an unprecedented Return-on-investment (ROI).
Startups generally are faced with a high level of risk and uncertainty compared to established companies. Established companies usually serve a familiar, established customer base while startups do not enjoy the same level of certainty. It is advisable for Startups to operate in such a way that they have a chance to learn while making sure their idea is viable. MVPs act as an effective way to minimize risk and uncertainty within a relatively short time.
The best and most efficient way for startups to learn is through experimentation and testing. i.e different versions of its products are experimented and tested against various key metrics. Experimentation and testing reveal the validity or invalidity of the original idea.
Startups are based upon two key hypothesis namely
- The value hypothesis (creating a product that provides value) and
- The growth hypothesis (creating growth in the market).
By testing their product, founders of a startup can put themselves in a better position to solve the problems of people in their target market.
Steps to building an MVP
- Comprehensive Research - Before a business initiates an idea and embarks upon an MVP Development process, they should ensure that it fulfills the target users’ needs. This can be accomplished by conducting surveys. You can never go wrong with conducting research. The more information a business has, the higher the chances of success.
- Competitor Analysis - It is important to keep an eye on what the competitors are offering and how the product idea can stand out. A survey conducted by CB Insights revealed that the number one reason for a startup’s failure was a ‘lack of market need.’
- Identify Your MVP’s Core Features - The first step to MVP development is finding out what features you want to include early-on in the product. The following questions should be answered when identifying the MVP's core Features. What are the problems of your users that you’re trying to solve with your product? How are they dealing with the existing problem today? How does your feature help them tackle the problem in an easier way? Which of your product’s features are ‘needed’ and which of them are ‘wanted’?
- User Testing - It is recommended to conduct user testing using as many mediums as you possible.
- Release and Keep Iterating - The whole idea behind an MVP is to release early and keep adapting to users’ feedback.
For a startup, it is important to validate its growth and value hypothesis as soon as possible. In order to do that, the company has to come up with a version of its product that is complete enough to demonstrate the value it brings to its users - MVP. It then needs to design experiments that will use the MVP to confirm or refute its value and growth hypothesis.
