Developing an MVP for SaaS Startups: Technical Insights
How to develop an MVP for your product while avoiding technical pitfalls? Why do some ideas become a source of monetization while others fail? In this article, you’ll find answers to these questions, including startup performance recommendations and all possible technical issues.
What Does MVP Mean?
MVP (Minimum Viable Product) is a test version of a product or service with a set of basic functions that provide value for your end consumer. The MVP’s concept includes a cycle with 3 stages:
It allows you to receive a meaningful snapshot of what users need in a product and find out if they’re ready to buy.
MVP development allows you to reduce the project launch time by creating only the necessary functions and start getting real feedback. Thus, the minimum viable product allows:
- to test a hypothesis based on real data and prove the viability of an idea;
- to relegate the possibility of financial losses when launching an unsuccessful product;
- to decrease costs on eliminating unnecessary functions;
- to identify unaccounted customer needs;
- to optimize product testing and speed up the search for errors;
- to build an initial customer base before a full-scale launch.
The key concept of building an MVP is creating a real workable product that can be offered to customers, then getting the reaction to it and finally refining the solution according to the preferences of the user.
About 45 % of startup failures are due to lack of market demand and mistiming of the release. An MVP ensures that the product is either in demand or needs to be quickly abandoned because it’s not commercially feasible.
Most of the well-known startups in the US and Europe started with a simple MVP version. Companies test the market, build a customer base, prove their idea to investors and get necessary investment capital. After the market validates the need for the product, then it’s possible to start adding new options to the product and continue to build on its tools.
What are MVP’s for SaaS Startup?
SaaS startups are noted as cloud technologies that help to use the software as an online service without installing it. The user accesses the service through a browser or API. The SaaS model is a ready-made solution — pay for access and gain access in a flash.
The most widely known example of SaaS is Google Docs. No specific drivers or installations — get an account, follow the link and work with texts, spreadsheets and presentations via browser. When it comes to SaaS, the user can contact the company admin at any time. Regular updates are available to all customers of the service. For a large company, this means saving on software. The program doesn’t need to be purchased and separately installed on each computer as several users can work in it. Only username and password are needed for access.
Back to the beginning of the MVP’s cycle: development → measurement → feedback learning. The logical connection behind MVPs helps start your SaaS product: the longer consumers wait for a product to be developed, the more money is spent on development, thus the more chances of risks and failures.
Money is worth more today than tomorrow. An MVP released at the right time, when enough money has been spent on it, reduces the risk of low ROI and helps with the formation of stable cash flow in the future scaling of SaaS products.
Software companies meet a lot of challenges during product launches. The first one is deciding whether the engineering team is building an MVP, proof of concept, or prototype. All 3 terms refer to a “lightweight” variant of the product but mean different things.
How Can a SaaS Startup Benefit from an MVP?
SaaS MVP for startups is an ideal option for making a minimal investment for a good product, especially if you are working with a reliable technical partner who is immersed in the specifics of your business and has expertise in the domain. What are the other benefits of the MVP approach?
1. Time to generate revenue
You get all the feedback data for future upgrades, win over more users and attract more investment without overspending.
2. Fast product launch speed
The period of developing an MVP is much shorter than the classic one and the whole process takes from 3 to 6 months.
3. User feedback
Because of the feedback, MVPs are often in a process of regular changes. At this stage, the best solution is the “cupcake method”. First, you invite your customers to taste a small cake so that they appreciate the dough, filling, cream and give feedback. If guests like the way the cake tastes, you start making a huge wedding or birthday cake of actual size.
4. Partnering with your future investors
When a project is young, it has just entered the market. Investors’ commercial proposals will give you an advantage over the competition and a chance to bring ideas to life. Here are several benefits:
- often investor is a guarantor of further product development;
- additional experience in competent product management;
- possibility to open preliminary sales and start reimbursing the project budget.
5. Design testing
Design is a way of communication with the target audience. User experience and sustained brand identity are key factors in brand retention. And finally, design helps to tell a story that can emotionally impact the user. It sets you apart from competitors, makes you brighter, cooler, easy-to-use and clear.
What Technical Insights Should Be Considered When Developing a SaaS MVP?
Everything that was listed above is extremely important for understanding the process of project implementation. To further explore this question in-depth, we decided to show a more detailed description of building a SaaS MVP and related technical issues.
We’ve prepared the list of common technical pitfalls that startups face building a tech product. Follow the link with the original article and find out:
> The best practices from a technical point of view
> The factors that enable fast and high-quality development
> The must-have features for SaaS products
