An MVP or Minimum Viable Product is the first market ready version of your business idea. It is built encompassing the most basic features of your end product, but in a way that it provides real value to the end user. For example if you are launching a shipping platform, maybe you don't include every single category of items at launch, or select more common payment methods, or limit your initial launch to just one or two payment methods. These are all ways to test out your product in the real world, and to gauge adoption, without spending the time and resources it will take to launch a full product. Even with the above limitations your product will cover its purpose from end to end, and bring value to clients, just possibly in a limited market that you have pre-selected for testing your idea.
MVPs help you to vet your ideas without incurring significant financial and time costs. Many massive tech corporations in the world today started as simple MVPs. Among them are giants such as Amazon, AirBNB, Facebook (also go ahead and Google Facemash for fun), and Twitter. Each of these tech giants started off as a much smaller investment that helped the people behind them to test out the waters and gradually grow into the brands we know today.
But why build an MVP?
As discussed MVPs help us to leverage many benefits on our product ideas. Let's break it down even further.
Test out a hypothesis
The success of any product idea, no matter how good it may seem to you, depends solely on market adoption. Until you bring a product to market and see how it is accepted, you are simply working with a hope of success. Getting something to market fast is obviously advantageous from this point of view.
Create a feedback loop with users
Putting a fully fledged product to the market means that you have already invested significant time and money in its creation. Any changes demanded by your users will be a massive overhead. In some cases these changes can make or break your product's adoption, but to make the changes you need to go back to the drawing board. With an MVP, your target market gets their hands on a product that is created to demonstrate the base functionality. We WANT them to tell us what else they would like to see, or how the flow of the product itself should change. The process has already taken into account the 'significant changes after launch' mindset as we haven't spent all our funds on the initial product launch. This goes a long way to making products more user centric and improving the user experience index.
Another major benefit to MVPs is the ability to use the funds that are available to create the initial product, and then use that to prove your idea, thereby attracting further funding to create your final product. Just look at Facebook's meteoric rise. After the initial MVP, better known as TheFacebook, they initially received funding of USD 500,000 in 2004. The idea was so successful and had such reach and adoption that in 2009, the series D funding was USD 200,000,000. For more information just visit https://www.startupranking.com/startup/facebook/funding-rounds
Had the minds behind Facebook decided to wait until they had perfected the product and launched the final version from the get go, rather than a website for HArvard students to share their contact details, the story might be very different. By launching an MVP they were able to enter the market fast, capture the users' interest, and work within their initial budget.
Designing a successful MVP
We have established that an MVP can go a long way to helping you pave the way for your product launch, to help you understand why your product will actually not make it in the market, before you invest so much that you can't recover. However, it is equally important to focus on building your MVP correctly. There are a few rules that you need to follow before, during, and after your MVP creation, to maximize the benefit.
Decide and research on your target market
If you have got a product idea, then chances are you have already identified who the product is aimed at. In any case, do your due diligence and research your target market. Proper user research is mandatory to understand your users' demographics, dig deeper into their pain points, understand their level of comfort with technology, and how they will use your product.
Decide on the essentials
Decide with your team on the essential pain points which will be addressed by your MVP. Remember, having too many targets will derail your MVP and end up costing you time and money.
Research the market
Does anyone already offer a similar product? What differentiates your product from your competitor? Why would people choose to go with you? If you have no existing competitors, then question why. Have you actually identified a previously unknown niche? Or have people already researched this area and decided that it's not profitable? Is this a problem that is being addressed or made redundant?
Feedback based development
Once your initial research is done you can create a design based on continuous feedback, this way you create a product that works well with your users. Incorporating your users' feedback changes the design in a way that ensures maximum usability, which ultimately leads to higher adoption.
Create a product that tests your hypothesis
A product idea is usually based on one or more hypotheses. You need to also make sure that your MVP is able to test out and provide valid data on those hypotheses. Without this information it will be difficult to convince venture capitalists or find other sources of funding for your product.
Once your MVP has been launched publicly, the next thing is to gather feedback. See how well your product idea is performing against your forecasts, and if it proves your hypothesis.
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An MVP is a great way to test out a potential product idea without investing so heavily that you cannot recover. It gives you the added advantage of being able to get into the market faster and be able to test out your hypothesis while gathering valuable feedback from actual users. To get the maximum benefit from your MVP you should follow a few rules during the MVP lifecycle. These will help you to not only create a great MVP, but to also be able to gather feedback in a useful way to further improve your product and impress potential investors.