Minimum Viable Product: Define the Best-fit Type, Method, and Follow Simple Building Stages
If there was a book about the most epic startups’ fails, it would have at least a thousand pages. Everybody makes strategic mistakes, even such giants as Amazon. In 2014, it declared a $170 million loss after the failure of Fire Phone. The reason for it was simple: no one needed this phone except Amazon. The gadget was intended to connect users directly to their shopping platform. Customers had been using iPhones and Android smartphones to connect to Amazon. The lack of customer research played a mean, expensive trick on Amazon.
If you want to succeed, you have to be sure the product you are going to offer is exactly what customers need. What is it supposed to be like? Developing a minimum viable product (MVP) can give you the answer.
What is an MVP?
An MVP, or a minimum viable product, is the earliest version of a product that has only required features, enough to deliver the core value and verify it to early customers. Basically, MVP is deployed to gather feedback and see whether the product is needed by users at all. Early adopters may also share their vision on the functionality so that the insights into customers’ needs and preferences would allow developers to adjust the product accordingly and plan further updates.
The MVP strategy, therefore, allows reducing the development cost as well as the risk of financial failure resulting from bringing an undesired product to market.
Eric Ries, entrepreneur and the author of The Lean Startup, gives a concise definition of an MVP highlighting the learning perspective an MVP provides. According to him, an MVP is “that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
It’s important to understand that the MVP strategy is not about building a small product to meet a short-term goal. The technique suggests developing the first, most simplified version of a product available for public use. The improvements made to this version are always based on feedback. The goal of building an MVP is to find out what features and experience the product should deliver to a targeted group of users.
The difference between proof of concept (PoC) and MVP
The MVP should not be confused with a proof of concept. The latter can be interpreted differently depending on the industry.
First and foremost, the proof of concept is not an early version of a product. A PoC in software development describes processes aimed at finding out if the software concept is technically viable. The team may also choose this approach to determine the required scope of work and best technologies for development, identify possible technical problems, and find solutions to them.
Drew Houston, the founder of Dropbox, made and narrated an explainer video of how Dropbox is supposed to work. Nearly 75,000 people subscribed to it during the first night. A similar technique can be realized via a blog, in which you can share ideas with the audience about the product you want to develop. While some consider this as MVP itself, we tend to classify this explainer as a PoC.
The terms MVP and PoC are interconnected but not interchangeable. The proof of concept realized in an optimal way becomes a minimum viable product.
Types of MVPs
There are many approaches to building an MVP. Let’s discuss the main types.
The Wizard of Oz (some also call it the Flinstone MVP). The two names for this type of minimum viable product stand for its work principle. Just as the Flinstones wanted to create an illusion that they have a real car and the Wizard of Oz used tricks to pretend to be a giant green head, a fairy, a fireball, or a monster, this type of MVP just seems to be completely functional. In reality, a startupper does the entire job manually instead of using a software system or a team is hired if needed. There is no underlying software at all but a product concept that requires verification.
Nick Swinmurn, the founder of Zappos, has proved this strategy works. At the beginning, he spent zero dollars on shoe purchases and warehouse rent. He posted shoe photos on a website. Once customers started ordering shoes, he went to a store, bought the needed pair, and shipped it. After having realized the project is viable, he added functionalities to the website.
Concierge MVP. Entrepreneurs who choose a concierge MVP also provide hands-on services. But in this case, a customer knows that a real person stands behind a provided service. Wealthfront, a service for financial planning and investments, started from a concierge MVP. Wealthfront workers communicated directly with clients that needed wealth management help. Another important difference from Wizard of Oz is that that the concierge type is aimed at generating ideas about the future product, providing services, communicating with customers, etc., rather than verifying them.
Piecemeal MVP. The idea of piecemeal is to deliver value using existing tools instead of building a custom solution. A product prototype looks like a complex product though. You may use simple software, put it together, and add necessary functionality after you get feedback. Groupon is a great example of a piecemeal MVP. Its founder, Andrew Mason, launched a WordPress website and manually posted pictures of meal deals every day. He generated offers as PDF documents using AppleScript and emailed them via Apple Mail. That’s how he validated the Groupon hypothesis.
A single-feature product. And, finally, an MVP can be the real software with the bare minimum of features, just the core ones needed for verification. With its help, you will be able to narrow down a target group, receive, and analyze feedback and concentrate on testing.
But regardless of the type you choose, there are several main steps to follow to create an MVP.
Steps to building an MVP
A product always starts with an idea. What distinguishes a successful product from an undemanded one is that a popular product is a result of a feasible idea transformed via a thorough development plan.
We offer a step-by-step guide on how to validate your idea and turn it into a product. You will be ready to start building an MVP in seven steps. Step zero is an introductorion to the main principles and techniques. The eighth and ninth steps are about project management approaches you can use and how you can test a product.
Step 0. Acknowledge the basic MVP principles and techniques
Prior to any actual work, it’s worth spending some time to outline the basic MVP principles and techniques and then make sure that your team adheres to them across the entire process. The following points are critical for all stages across your MVP initiative.
Try spending as little money and effort as possible. The entire idea of an MVP is to cut the time and resources necessary to verify your business idea. Identify the simplest type of MVP that is sufficient to generate feedback and stick to it.
Focus on building awareness. Leverage as many media channels as possible to ensure that you have critical number of early adopters. This may be done within your PoC activities.
Try pre-selling the product. You can use Kickstarter, other crowdfunding platforms, or directly sell your product to meet two main goals. The first and the most important one is to get feedback and the second is to invest this money into further development. You’ll be able to see if people like the product’s concept in the first place.
Interview customers all the time. Regardless of the step you’re on, invest time interviewing your potential customers to launch adjustments as early as the first wireframe and keep actively interviewing until you transition from the MVP stage to version 1.0. After that, you still should follow this practice, but enhance it with A/B testing and other advanced verification methods. You can use online survey forms or talk with customers face-to-face. Articulating the right questions not only will help you learn about the problems bothering users but also figure out if they are worth solving. Ask what disturbed them the most when they faced the problem and why, when the last time was they experienced it. Let them tell you how they tried to solve the issue and what they didn’t like about solutions they used.
Set up a feedback loop. The feedback that you receive either through interviews or other channels should be systematic and have real, short-term impact on your product. Keep track of all feedback, generalize, and convert ideas that you receive into concrete tasks for your team.
Besides principles, to set a feedback loop, you should consider the main channels to letting your users try the product and provide the means to share their ideas and concerns.
Create a landing page. The page should contain the description of the product and its features as well as a sign-up form with free and paid solutions. With the landing page, you can define optimal pricing for your product.
Use social media. Such platforms as Facebook, Reddit, and YouTube will be the most straightforward sources of insights, given that you’ve acquired enough attention. We also recommend using blogging tools, either owned or public, like Medium.
Start an ad campaign. You may use such platforms as Google, Facebook, and Twitter to see if the MVP reaches its target audience. These advertising platforms have very flexible and detailed segmentation capacities, so you’ll be able to test your personas hypotheses by targeting multiple narrow user segments.
Step 1. Define a problem you want to solve
The first thing you should do is articulate the product’s purpose. Try simply answering the question “What do I need this product for?” Once you’ve clearly communicated in several words the value a product brings, you can proceed to the next step. For example, if you want to open a meal delivery service, the issue you want to solve may sound like this: “Allow users to get meals from local restaurants to go.”
Step 2. Define the target audience and narrow it down
Trying to satisfy the widest group of people is a mistake. Increase your chances and choose a certain audience you want to offer your product to. Create a full description of a person who is not only going to like your product but also will buy it without hesitation. You should know how old and how educated this person is, what he or she does for a living, and what earning level this job brings him or her. Habits and hobbies will complete a description of a potential customer. To learn more about creating buyer personas, check our story on starting a SaaS business.
The knowledge about customer’s lifestyle allows you to find out if your future product aligns with the exact problem he or she faces.
Step 3. Evaluate your competitors
Don’t overestimate the exclusiveness of your product, especially when you know there are other companies within your industry. Evaluate your competitors. Find out their strong and weak points to define the functionality of your future product. You may also group them according to the way they compete for market share.
Define your competitors and the added value they provide. Analyze who your top three rivals are, how long they have been in the market, what products or services they offer. Define whether they have a competitive advantage and estimate your ability to offer something better.
Find their market share. You should research their past and current strategies, sales volume, revenues, financial, and marketing objectives. This data will help you understand how profitable and successful they are.
Use primary and secondary sources of information. The information companies share about themselves is the most reliable, primary source for analysis. Visit their websites to read presentations, white papers, annual reports, blogs, advertising materials, and other publications. Secondary sources of information, such as magazine and newspaper articles, videos, survey reports, and books, represent public opinion about the players. Although these sources might be less reliable than primary ones, they can give you a bigger picture of the industry.
Dig deeper. Don’t hesitate to visit business events competitors take part in, contact their former employer and, of course, use their product and analyze the feedback on it.
Use analytical software. Various online tools for competitive analysis will make your life easier. Such services like Similar Web, Ahrefs, Quantcast, App Annie, or AppFollow gather data about websites and apps. With them, you can find the rank of your competitor’s app or a website, its monthly traffic, audience interests, geographical locations of customers, and see related products.
When you know key market players’ weaknesses and strengths, you will be able to know what makes your product unique or what it lacks to become so.
Step 4. Do the SWOT analysis
SWOT stands for strengths, weaknesses, opportunities, and threats. While the framework is usually applied in strategic planning for mature companies, it’s simple enough to be used for qualifying the MVP idea. To perform the SWOT analysis, you need to answer objectively a series of questions related to the above-mentioned categories. Let’s have a look at how the SWOT analysis may look like for the meal delivery example we mentioned above.
The best practice for the SWOT analysis is to keep descriptions short and easy to comprehend for all team members
The goal of SWOT analysis is to focus the effort on strengths, defining and minimizing weaknesses, avoiding threats, as well as using existing opportunities for further development. Strengths and weaknesses usually relate to internal factors. In turn, opportunities and threats are the external ones.
It also helps companies analyze competitors and to choose marketplace positioning.
Step 5. Define the user flow
User flow is a path a user takes to accomplish his or her main goal while using a product. And this path must be logical and clear.
User flow is a guidance for content and design requirements for a website or app. You should understand what customers expect to get while using your product to build a good user flow. Make sure you provide users with some additional information if they need it and find out possible disinclinations that can stop them from going to a next step.
As an example, let’s list tasks users must take to achieve a primary goal we stated in step 1, get meals to-go from local restaurants. The user flow would be: customize order, manage order, pay for a meal, receive the order. After the steps are determined, it’s time to define features for each of them.
Step 6. Create a list of features and arrange them according to their priority
You need to list all required features for the future product. The story mapping (or user story mapping) technique will help you at this planning stage. By the way, it’s reflected in the user flow example above.
Story mapping is a two-dimensional approach to managing user stories. It allows for concentrating on parts of functionality and, at the same time, not losing the big picture of a product.
The technique was made to help developers choose both useful and valuable features primarily from the user’s point of view. Its author and practitioner, Jeff Patton, suggests that a feature description should contain an action done by a person rather than the means of its implementation.
We’ve listed four steps users do to solve the problem with the help of our product: customize an order, manage the order, pay for a meal, receive the order.
Now we must describe features for every step and write them down on cards.
For example, to customize an order, a user might have to:
- choose where she or he lives
- choose a cuisine
- choose a restaurant
- choose a dish
- choose a drink
- read a chosen item’s description
- add the order to a shopping cart
After you’ve finished with descriptions, draw a horizontal row showing the user flow, place main steps on the map and their features.
The features aren’t prioritized on this stage yet
Now let’s prioritize features. You should find out how important and valuable the feature is, how often the feature is used, how many users will use it, and how risky it is.
Once you’ve arranged features according to their priority, draw a vertical line and place them where they belong. The most important and frequently used ones should be at the top of the list, the least — at the bottom.
Prioritization will help define the scope of an MVP
Step 7. Define the scope of MVP
After you’ve prioritized the features, you can define the scope of the MVP. The first horizontal row on a map is called a walking skeleton. The walking skeleton is the smallest usable version of a product that lacks flesh, i.e. functionality. We should build a walking skeleton first.
In some cases, the MVP coincides with a walking skeleton; sometimes the MVP has some functionality. To understand what the distinctions are between walking skeleton, a minimum viable product, and its further concept, you should categorize features under the headings must-have, nice-to-have, and won’t have.
Now draw a line to separate core features from nonessential ones. The features you give the highest ranks represent the MVP. The rest of them may be added after the deployment of the MVP and feedback analysis.
As features are prioritized, you’re good to start engineering
Step 8. Choose the best-fit management method and engineer an MVP
With a defined scope of work, you can finally start developing the minimum viable product. Now let’s find out what project management methods are applicable to building an MVP.
Lean. Lean is one of the Agile software development methods that is based on several core principles: eliminate waste, deliver as fast as possible, amplify learning, and build integrity in. Practically, Lean applies iterative development with the build-measure-learn pattern. With Lean, developers can delay most of the design decisions, set a rapid feedback loop, and make sure they build a demanded product.
Scrum. Scrum is another iterative approach to software development. It relies on the efficient division of work scope, which helps teams deliver faster. You can manage the development of features for MVP in sprints (short cycles about two and four weeks long) and hire a scrum master who will oversee keeping the whole Scrum process running. MVP may be released after the first sprint, and the development team can update the product according to users’ feedback in all subsequent sprints. While Scrum is more time-consuming than Lean, it may be less stressful for engineers and fit for long-term, incremental development.
Kanban. Kanban focuses on the work-in-progress model and unlike Lean and Scrum doesn’t have cyclic progression. Instead, Kanban suggests focusing on tasks as they appear. This allows for aligning the scope of work with team capacity. Basically, engineers can continuously add tasks to a pipeline as they get feedback from users. Kanban may be applied after the first version of MVP is released. It will be a powerful method if feedback is ongoing.
Extreme Programming. XP is a set of engineering practices, such as code refactoring, small releases, simple design, coding standards, that allow for improving the code and upgrading it within the shortest timeframe possible. Development cycles with XP don’t exceed one week, so you can deliver the first version fast and then scale. XP will be a good fit for MVPs that heavily rely on code quality.
Choosing one of the iterative development approaches is critical as it allows you to build a consistent feedback loop.
Step 9. Apply Alpha and Beta testing
Alpha is a so-called in-house test: A limited group of people, mainly friends and family members, evaluate a product. If a product has passed this test, you can proceed to a beta test and let the real users try a product for one to two weeks. Analyze the feedback and decide what functionalities you need to add or replace to make the product better and more complex.
After you’ve collected enough feedback, you can start upgrading the product, test it, and gather feedback again. The number and time frames of build-test-learn cycles depend on the product. After you’ve completed multiple cycles, you can either go back to step 0 and pivot or keep iteratively improving your product.
MVP plays the role of an airbag and gives an opportunity for forecasting a commercial and technical potential of a product’s vision as well as its implementation. It gives you the opportunity to make business and technical decisions based on facts rather than assumptions. Therefore, testing the concept or the product in the market is the key goal of building an MVP.
Originally published at AltexSoft’s blog: “Minimum Viable Product: Define the Best-fit Type, Method, and Follow Simple Building Stages”