With the rise of technology, there is a surge in the startup game. Every day we come across smart entrepreneurs, proposing out-of-the-box ideas for their indigenous products. And these entrepreneurs are in a constant state of converting their ideas into reality.
Scott Belsky, Behance Co-founder, rightly quotes, “It’s not about ideas. It’s about making ideas happen.”
Truth be told, 9 out of 10 startups end up failing even before placing their feet in the market! This is because they build a product, spending hundreds and thousands of hours and money, only to find that no one is interested in their idea.
“There is nothing so useless as doing efficiently that which should not be done at all.” – Peter Drucker
So, how do you turn your idea into a full-fledged product? A well-planned MVP is the answer.
But what exactly is a Minimum Viable Product (MVP)?
The term MVP was coined by tech CEO Frank Robinson in 2001, and was popularized by Eric Ries through his book, “The Lean Startup”.
A Minimum Viable Product ( MVP) is a basic version of your product, with minimum yet must-have features. It is launched in the market with the intent to test and validate the product, attract early adopters and gauge their reaction to it.
In the words of Eric Ries, an MVP “allows a team to collect the maximum amount of validated learning about customers with the least amount of effort”.
Are MVP and Prototype The Same?
While an MVP is the basic and launchable avatar of your actual product with minimal features intact, a prototype is simply the first draft of your product, which is discarded once it is tested.
Difference Between MVP and Proof of Concept
Albeit the approaches are the same, an MVP and a Proof of Concept (POC) serve slightly different purposes.
Unlike an MVP, a Proof of Concept seeks to prove that a product concept actually works.
Why do you need an MVP though?
1. Cost and Time-Friendly
MVP helps you minimize expenses and saves time and test the product in a real market without betting it all in one go.
After all, it’s better to have a failed MVP than to have a failed final product.
2. Minimal Risks
Another advantage of building an MVP is that it is often developed with minimal risks. The biggest names out there, Airbnb, Facebook, Instagram, Snapchat, Spotify, Uber, Zappos, etc started small and grew consistently.
3. Opportunity to test early
If you’re in a dilemma about your idea actually working, the MVP approach can help you test and determine your idea from day zero.
4. Focus On The Main Functionalities
We’ve talked about feature prioritization and that’s what MVP facilitates.
Redundant functionalities consume time and money while diverting focus from the real problem statement.
5. Early Relationship With Users
The quicker you develop and release an MVP, the quicker you’ll be able to communicate and build a relationship with your users and work on their feedback.
Time is of the essence to understand their needs and find ways to address them. Your beta users can also be instrumental in promoting your product within their network.
6. Launch faster
Be the early bird to catch the worm. With the MVP approach, you can launch your product faster and have a competitive advantage in the market.
A well-designed MVP is the heart of a successful product system. Agile methodology is the spirit. And when the two work together, magic happens.
Challenges While Building An MVP
An MVP doesn’t have to be perfect; it is built to make the final product perfect. Your MVP must always be able to address the problems faced by the customers.
Let’s discuss some of the challenges and how you can fix them.
1. Failing To Identify The Right Audience
Most startups working on their MVPs fail to identify their target customers and their needs and end up with a product no one needs.
Avoid this by conducting extensive research on your users’ needs to drive maximum satisfaction.
Suppose, I invite my neighborhood kids for lunch. I assume their choice of food and prepare a special dish for them. However, when served, the kids can’t eat it as it is a spicy dish. I failed to understand their needs and wasted both my time and energy. A little research on what they like could have prevented that.
2. Opting For An Inappropriate Project Management Methodology
There are two popular project management methodologies: Waterfall and Agile.
The Waterfall model is a classical model consisting of a strictly defined set of development phases. In this model, there are no internal iterations and no space for reflection during builds.
Agile is a more flexible system; with ample room for iterations and reflections. The process of development is split up into sprints focusing on certain goals.
Most companies also opt for something in between the two and bend a few rules here and there to suit their requirements. Feel free to experiment.
How to Plan Out A Successful MVP
1. Identifying And Prioritizing MVP Features
Prioritizing involves identifying the must-have features of the MVP. We emphasize: Do not flood your MVP with excessive features. Overloaded MVP functionalities take more time, effort, and money during the beta phase.
Thus, verify the list thoroughly; then prioritize them one at a time. MVP feature prioritization helps you to filter and keep those functionalities that are indispensable, and discard the ones that aren’t necessary at all.
Once you’ve come up with the functionalities, categorize them based on priority
- High-priority features are the must-have functionalities
- Medium-priority features are the less important features that can wait
- Low-priority features aren’t at all important and mostly affect the excitement level rather than utility.
Mistakes To Avoid While Building an MVP
Here are a few common mistakes to avoid while building an MVP
1. Opting for and Solving the Wrong Problem
Before developing your product, ask yourself what is the market/user problem you seek to solve. Verify if the problem is real or something that you just think is a problem. Doing that will help you find out:
- Your target demographic
- The effective solutions to address their problems
2. Omitting the Prototype
Imagine skipping the early years of school and getting into college. Unless you are a wonder of nature, that would not be pretty, would it?
A prototype is exactly like that. Omitting this part solves nothing but instead can throw at you ugly surprises during the actual development.
3. Gathering Wrong User Feedback
Post-prototyping, it is important to gather user feedback to validate it. Many fail to identify the right target audience to do that.
If you think that ‘Everyone’ is your targeted audience, your product will cease to exist even before entering the market. Instead identify your niche customers, because only they can relate to the problem you seek to solve and give useful inputs.
4. A Giant Team
It might look cool to have an oversized team on board; and you might also think that the more people you have, the faster you can launch your MVP. But that’s not really true. Instead, it could drop the development speed, slow down performance, and hinder financial growth. So, make sure your team size is proportionate to what you actually need.
5. Excessive User Response
Accept that you can’t please everybody. Excessive user feedback slows down your development pace, resulting in the delay of the MVP launch.
So, narrow down the responses to fulfill your product’s key objectives and the needs of your target user group.
Testing the MVP
Testing is the greatest purpose an MVP can serve but some businesses tend to ignore that. We hope you don’t do that and so here are a few popular ways to test an MVP.
1. User Feedback
Receiving user feedback helps you understand how your product is being perceived by your customers. There are two ways to do that:
- From a selected person of your choice (this is known as alpha testing).
- From user communities and listening to your mass users talking about your product on online forums, and social media and monitoring their reviews
2. Introducing Your Product
Have a landing page for your product and exhibit your product directly to the visitors on it.
Speak in the language of your users to help them understand your product better and build empathy. Be transparent with your vision to avoid looking like snake oil sellers.
3. A/B Testing
A/B testing, also known as split testing, is a process where you create two different versions of the same product and show it to your users to check which version attracts more audience and is effective for them.
Although this test is apt for landing pages, email marketing campaigns, and internet ads, this can also be used during the prototyping stage.
4. Fund crowd-sourcing websites
Fundraising websites are quite popular these days. These can help you find out if people are willing to pay for your product based on the idea you share. Websites like Kickstarter and Indiegogo have a huge crowd ready to donate/invest money in your ‘not yet released’ product.
5. Pre-order Pages
On Pre-order pages, you can post about your work-in-progress product and consumers can place an order beforehand for that product (if they like it).
Engaging blogs by you or by influential tech folks is a popular method these days. This can create curiosity among your target users and validate your idea.
Cost of building an MVP
Building an MVP isn’t cheap. You need money to account for the time you spend building, the infrastructure, the tech stack, and the people you employ among other things.
However, there are a few ways to minimize these costs. Let’s take a look at a few options:
1. Hire freelance developers
This is one of the economical ways to get your project started. There are many freelance developers on popular freelance platforms like freelancer.com, upwork.com, Fiverr, and so on.
Make a list of features, develop some samples/mock-ups of how your site should look along with the technology that best fits your product, and get in touch with them.
Cost reference: Freelancers charge you by the hour. it could be somewhere between $10 per hour to $200 per hour for mid-level developers. Experts might cost you more than that.
2. In-house Development
This is when you hire a team of designers and developers to work for you as employees of your business and pay them salaries. Undoubtedly, it gives you more control over the process and smoothens many aspects of development, but this means you need to consider a place to set up your business, add infrastructure costs, and maintenance, and get all legal aspects figured out.
Cost reference: Simply hiring a full-stack developer could cost you around $2500 per month in addition to other team members and costs.
3. Local App/Web Development Companies
While going for development companies locally might take the burden of setting up your in-house team, most of the time, it is not the most pocket-friendly option.
Cost: A consultant may charge about $400 an hour. Assuming that your project would be completed in 6 months, the MVP development may cost you around $64,000 per month.
4. Outsourcing App/Website Development
For startups with a minimal budget in hand, outsourcing to companies located in developing countries can be a cost-effective option. Since the cost of living in these countries are comparatively lower, the expected expenditure on your part would be below as well.
We at Tech Variable are responsible for major projects which have been outsourced to us. In return, we delivered beyond expectations. (Add URL to case study page)
Cost: On average, this would cost you somewhere around $25, 000 per month.
Guidelines To Target The Ideal Market While Building An MVP
According to Harvard Business Review, 85% of 30,000 new product launches failed because of poor market segmentation.
To ensure you are on the other 15% of this report, do these:
1. Study Your Competition
NEVER consider your product special. Your product might have some unique functionalities but there will be similar products flocking to the market and competing with you.
Keep an eye on them and figure out what they have to offer and how they are doing it. Knowing their strengths and weaknesses will come in handy because once you know them, you will be able to fill up the gap in the market.
2. Dividing Your Users Geographically
Divide your target user base geographically. Businesses often implement this effective tactic to accustom themselves to the features based on the location that comprises a particular target market.
Suppose you are building a learning app. You’d need to consider:
- If users from a specific location have access to an internet connection
- If the language you use is applicable to them
- If they are technically adept
Since you’ll have users from different places, their needs, and cultural attributes will vary as well. Thus, make sure you develop an MVP that meets all of your users’ requirements.
The six factors that pertain to geographic division with the help of which you can segment your customer base are:
- Climate and season
- Cultural preferences
- Population type and density (urban, suburban, exurban, or rural)
Measuring the Success of an MVP
Scaling your product requires metrics to measure your MVP’s success. Let’s look at a few ways to measure that.
1. Listen to Customers
Communicating with customers is one of the most effective ways to measure the success of your MVP. Pay heed to what your users have to say about your product, and jot down all the issues they are facing.
Customer statements are the foundation of improvement. It lets you gauge the current as well as the future values of your product.
“Focus on how the end-user customers perceive the impact of your innovation – rather than on how you, the innovators, perceive it.” – Thomas Edison
2. Download and Launch Rates
Download and launch rates show whether your product is interesting enough for users. Higher download and launch rates mean higher user interest.
3. Number Of Active Users
Keep a check on the number of active users you have regularly. You should analyze users’ behavior and keep track of the number of daily active users and monthly active users.
4. Percentage Of Paying Users
Keep yourself updated with the percentage of paying users you have. You should also keep a check on who these paying users are, how they are using your product, etc.
5. Lifetime Value Of Customer
Determine the amount of time and money customers spend on your product, during their lifetime, before stopping to use your product. This is how you can know your product’s worth in a customer’s life.
6. Churn Rate
Churn is the percentage of users who have stopped using your product. These should be measured separately if you have both free and paid users.
Successful Minimum Viable Product Examples
The MVP approach is popular as it has helped many entrepreneurs successfully launch products. The giants of today are no exception. Let’s look at a few of them.
Amazon, one of the e-commerce giants, began as an online bookstore back in 1994. The first website consisted of a catalog of books where customers could order a book, and Amazon, purchasing it from the distributor, would ship it to the customer. Over time, it evolved and a myriad of features and products are now added to the platform.
Facebook was launched, with a simple MVP, to simply connect with friends (schools and college students especially) through messaging, and organizing gatherings.
Built on the basic model of an MVP, it was released to test among real users. And luckily enough, it successfully did that in a short period. Presently, Facebook has more than 2.8 billion monthly active users.
Two friends, when unable to hail a cab on a winter night in Paris, came up with an amazing idea of having a timeshare limo ordering on an app. And thus, the cab-hailing app Uber was born.
They purchased the UberCab domain back in 2009 and started creating a prototype soon after. Their prototype, in 2010, had only three cars which enabled them to book a cab with just a single tap of a button.
Initially, it had a few functionalities – booking a cab, tracking movement via GPS, and making payment via a card. Now, with the help of user feedback, many new features are included in the app like driver live tracking, fare splitting, ride-sharing, fare estimation, mobile wallet linking, etc.
Obtaining Qualified Traffic For Your MVP
Often well-designed MVPs with exceptional functionalities go unnoticed by users. To ensure product evolution, it’s important for you to take effective steps to get eyes on your MVP. And for that, you can try out these steps:
Why Not Start With Potential Customers?
To obtain qualified traffic for your MVP, identify which platforms your potential customers are most active on. Since most people are active on social media, creating an ad campaign for those platforms could help.
Innovate ways to connect
To encourage user engagement, gamifying your product is one of the best options to obtain qualified traffic for your MVP. Running online contests among your users, or providing vouchers or discounts if they provide detailed feedback is one way to do that as well.
Let SEO Rule Your Landing Page
With Search Engine Optimization (SEO) the chances of people landing on your website increase. That can directly translate into possible users or can at least spread the word about it.
Success is yours if you implement these MVP methods to validate your product as early as possible. With the right MVP development approach, you’re already on the path to success! So build, measure, learn, and iterate the process until you finally get the desired outcome.
We hope this blog will help you in your business journey. If you have any queries, feel free to reach out to us.