Any aspiring entrepreneur looking at the success of big tech companies like Facebook, Instagram or Snapchat is likely to feel intimidated to just compare their own idea with the success of big players. We can agree that the gold rush is over. We won’t see another Facebook, Instagram, Snapchat or other massive tech company in this industry. It’s not even worth trying to replicate their success in the same way they achieved it, but that doesn’t mean that the industry is dying. It simply means things are changing, and while everyone talks about self driving cars, AI, Virtual and Augmented reality, there’s a silent revolution happening elsewhere.
The next wave of game-changing entrepreneurs are likely to be from a non-technical background. As the industry matures, and technology becomes more of a tool than a complicated new thing accessible only to experts, we will see people connecting the right dots in industries which have low saturation in tech innovation.
You might be one of the next game-changing entrepreneurs. And if there’s one lesson worth remembering from the success of big players, it’s that they didn’t start out big. Features that cater to every need and surprising interaction tidbits that make an app enjoyable are all useful to consider, but not when you are starting your entrepreneurship journey. In fact, the way they started out, the way you should start out as well, is by defining your Minimum Viable Product and putting it out there to be tested.
What is an MVP?
The term Minimum Viable Product was first coined by Frank Robinson and was popularised by the LEAN startup figureheads Eric Ries and Steve Blank. Eric Ries describes it as: “[the] version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort”.
It is also worth reflecting on the descriptors of the product itself:
• Minimum — meaning to put in the least amount of effort and resources
• Viable — meaning capable of life or normal growth and development; in the startup industry, it has the meaning of being self-sustainable.
An MPV is valuable for your business development in several different ways.
• It validates your product idea. You are delivering a functioning product that people are trying out and giving you feedback on. By gathering all the usage data and analysing it, you can tell if you are on the right track instead of wasting energy and resources.
• It’s the foundation of your marketing strategy. Through your MVP, you are making a value proposition to your future users. You can start defining your brand, your voice and to start growing your user base.
• It helps you raise funds to grow your business further. Your MPV is a real and validated first version of the product you want to build. Investors will feel more confident investing in your product if they have the opportunity to see it in action and to see the feedback you’ve received on it.
It is also worth keeping in mind that the bigger the value you offer, the more willing your users will be to overlook the incomplete features or bugs that every MVP comes with. In fact, if you are willing to invest in the quality of your MVP — in other words, have the specific features you offer at their best possible version — they are more likely to value your product more. User experience is too often overlooked in the race to finish line, but it can make or break you in the end.
To better understand what an MVP is and how it is useful, imagine you happened to be the first person to see the potential in using wheels as a mode of transportation.
You wouldn’t start out by balancing on one wheel, as you’d just fall on your face. But you would start by building a skateboard (if you’re terribly short on resources, you could build it with three wheels!). You’d test it to see if people were interested and willing to use it, and get feedback like: ‘oh, this is nice’, and ’I’m moving much faster’ and ‘I wish I didn’t have to stand all the time’. Your skateboard checks both the minimum requirement (a board and three wheels are straightforward to put together), and the viable requirement (people are using it and giving you feedback, so you have reasons to make more and improve them). Moreso, because in our hypothetical scenario, you are the only provider building and selling skateboards, your users are willing to forgive the learning curve and the occasional accident because you’re solving a very pressing need.
Your next step would be to make a bicycle: more comfortable and safe to use, requiring less effort. Attract the attention of an investor, and he might offer you the funds to put in an internal ignition engine. Now you would be making motorcycles. Turn them into cars, basically motorised boxes on four wheels, and you can start the process all over again. And remember how you started out with a wooden board on three wheels?
This is why MVPs are valuable — they allow you to incrementally build better things, by giving you opportunity to test out consecutive versions.
The iterations of building transportation on wheels.
So how do you define your MVP?
Not every entrepreneur sets out to build cars. Some set out to build a meal ordering business, others a couch sharing network, others matching applications. Some will understand their industry very well, but not know the specifics of app development. Others will have the technical background but falter at market research.
Building a solid MVP starts with defining it, and this definition is a process in itself. It is dependent on the needs of the people you want as users and the industry you’re trying to enter. One more thing you need to be aware of is that not all products have the same starting point: some products are created to solve an existing problem, other products bring added value to a want your audience has. Being aware if you’re building a problem-solving or want-based app will keep you on the right path when deciding on your product objectives.
Before entering the process of defining your MVP, make sure you know the answers to these questions.
1. Who is your target audience?
As they grow, products can offer value to more than one type of audience. But your first 1000 users should be the ones that require the least amount of effort to give you the most return of investment — both from a financial point of view and the quality of the feedback they will provide.
It’s better to have 100 people love you than a million people sort of like you. — Paul Graham
Brian Chesky, co-founder of AirBNB, remembers the best piece of advice he received from his first investor, Paul Graham: “it’s better to have 100 people love you than a million people sort of like you.” The way Chesky has seen it in his own experience: “if you can find 100 people that love your product — as long as there are more people like them in the world — then you have an idea that I believe will spread around the world. It’s not about blind faith, but it’s about if you’ve solved your own problem or seen people be deeply connected to your product. But if you can’t get 100 people who absolutely love your product, then you do have a problem.”
Before starting to define your MVP, make sure you:
- Build a profile of your target audience. Describe your target audience in terms of sociodemographic information, what interests would lead them to use your app, in what context would they decide to use your app and what are they trying to achieve.
- Validate your target audience. Test out your value proposition on your target audience with surveys and pre-release teasing and sign-ups. If your assumption of the target audience is correct, the pre-release testing will validate if you are on the right track. It can also determine you to change course if you do not get the response you had expected.
For example, if you were trying to build an app that helps you find the best ice cream nearby, your ideal first 100 users would be under 30, live in urban areas, like to travel and are foodies with a special interest in desserts. You’d prioritise this kind of user as they would be the most likely to try out more locations and share online any new recommendations.
2. What are your competitors doing?
By researching what your competitors are doing, you become aware which are the needs they respond to well and which are left unaccounted. Understanding the value they offer and how they have translated this into their features will help you differentiate yourself. Competitor analysis is helpful in defining your MVP also because it can pinpoint at what complexity your product becomes viable.
There are different ways in which you can research what your competitors are doing.
- Google them. Looking up competition on the web is still the simplest way to get first insights into what and how your competition is acting.
- Read the reviews they get. Reading reviews on app stores, independent IT journalists and comments on their social media is a good way to get some insight into what your competition’s users enjoy and dislike. If you have the chance, getting some in-depth interviews with these users becomes useful data in defining your own MVP.
- Test out the competition yourself. Nothing brings you closer to what is in the user’s head like becoming one yourself, so don’t hesitate to test out competitive products. Especially when building a want-based app, being aware of where you can add considerable value in your product experience will make a difference in the success of your app.
- Come up with a point of difference. Sum up all of your findings to understand what your competition does well. Once you have that, find something to either do better, or add new value to the mix.
Going back to our best ice cream finder app, you know there are many products recommending all kinds of restaurants, like Yelp or TripAdvisor. You also know that their recommendations are extremely diverse and complex. But an ice cream specific directory would be appealing to a niche through its simplicity. Remember that having a strong competition shouldn’t deter you from your idea — it should motivate you to validate it and find the niche where you can offer the most value.
3. Define your value proposition
At this stage, you have a clear picture of who your first 1000 users are going to be and you know what your competition is doing: both good and bad. This is the moment where you take your initial business idea and define what value proposition you are building your business on. What are you trying to achieve for your users? What problem are you setting out to solve for your target audience? What added value are you giving them?
Write down your value proposition in one line of text. Don’t be afraid to test it out to make sure it is clear. One simple way to do it is to have people around you explain it back to you. As you set out to define your MVP, keep your value proposition at the top of your mind — it should guide all of your future decisions.
For example, you know your ice cream finder app is targeted towards a young, urban audience, with a passion for desserts. You also know that your competition is very diversified with their recommendations, and complex in the information they offer. So the value proposition for your product could be:
“It’s like TripAdvisor but just for ice cream.”
Defining the scope of your MVP
Now that you’ve done all the background research you need and decided on a value proposition, you can get started on defining the scope of your MVP: the list of features you have to include in the prototyping phase, to turn your value proposition into reality.
Keep in mind that the value proposition you come up with shouldn’t translate into many features. In fact, many features have a tendency to dilute the value you’re trying to offer to your users, by creating conflicting paths of action and a steeper learning curve.
Beyond the visual design differences, notice how the MVPs of famous products like AirBnB and Instagram are focused on very specific tasks: booking places (AirBNB) and taking and sharing photos (Instagram). Both MVP features are the product’s value proposition put in practice. Additional features, which enriched the offered value to a wider audience, were included in the next versions.
In the next section, you will learn about two techniques that help you identify the features that enter into the scope of your MVP.
List and sort features
Start listing features you’d like to have on post-its and organize them into a three column table. The three columns will focus on must-have, should-have and nice-to-have features.
- Must-have features
The must have features are obviously the most important of all. These features are aspects of your product that have to be part of it from the very start. If even one of these is missing, the product has failed to deliver its value proposition. Considering these are make-or-break features, be careful when you assess which features are deserving of the title.
For example, your ice cream finder app must have a map, a list of ice cream vendors and a rating system.
- Should-have features
Should-have features are features of high priority, but that aren’t vital for the viable functioning of your product. These are aspects that should be included in your product if the time and resources allow for it to happen, as they would add a great deal to its working quality. However, if there’s no feasible way to develop them in the MVP stage, they can be put on the backburner without doing significant harm. They’re not critical to launch, but would be of great importance to the user.
The ice cream finder app should include a way to save favourites and share them with friends.
- Nice-to-have features
Nice-to-have features represent a diverse range of features that, while adding to the general quality of the product, will not impair its overall functionality as an MVP. You can use this column as an ideas box for features that could add more value and functionality to your product, but that aren’t urgent to prioritize or allocate time for at this moment.
Continuing your ice cream finder example, it would be nice-to-have photos for the users to see and upload, a paid recommendations system for vendors, special offers for different audiences or events.
Determining whether each of the features you’ve thought up should go into the scope of the MVP is essential, so adding a prioritisation method leaves less room for errors. This is where the BABOK Guide comes in.
The BABOK guide will help you prioritise the features you’ve come up with based on rational, well-defined guidelines. These are tailored to product development and will ensure that you define the best version of your MVP. It provides seven criteria for assigning the appropriate priority to every feature of your product:
Business value: How much business value does a feature provide? If it is of particular importance to the well-being of your future business, it will be of utmost priority.
Business or technical risk: Every product involves features that put its overall success at risk if not implemented efficiently. There are two ways of going about them: assigning them top priority to ensure they are implemented successfully or assigning them little priority to ensure that the minimal amount of resources were used in case of failure.
Implementation difficulty: If a feature is particularly easy to implement, it could lead to a quick win. Easy implementation also allows your team to get used to the project and the workflow before diving into more complicated assignments.
Likelihood of success: If potential investors require an MVP as soon as possible, you may implement the features that are easiest to handle and most add to your viability first, to ensure you stick with the required timeline.
Regulatory compliance: When a product has to meet certain legal requirements, these take the top priority. Compliance with laws and regulations is non-negotiable.
Links between features: Some features go hand-in-hand. If one of your top priorities requires the implementation of another aspect, the second should also take a top spot on your list.
Urgency: This one is pretty self-explanatory. IF something is urgent, do it first.
The MVP you choose to build has the potential to turn your idea into a successful business, but also to take you out of the game before you’ve even started playing it. However, if you do your research and approach the process with a clear objective in mind, it will end up being the unique product that sets you apart from the rest and acts as a stepping stone to big, brilliant things.
Remember to identify your target audience and its pain points, consider your competitors carefully and prioritise according to what your users need, not what you’d like.
In the end, all companies start with a product, but the truly great ones build a quality foundation and validate it first. So roll up your sleeves, get a notepad, and start mapping out your future business. Once you get into it, you’ll notice the finish line is closer than you’d think.
Have you started defining your own MVP? Let us help you out with a free one-hour consultation to turn your idea into a world-class prototype.