When companies come up with new products or services, they can spend many months developing their “perfect offerings,” which they load with features they think customers will love. However, when they finally release these products, many of them find that customers aren’t interested. Clearly, this is a disaster!
Instead, they could have developed “minimum viable products,” or MVPs. With this approach, you release a bare-bones product, so that you can quickly learn what people want and what they don’t. You can then make fast adjustments based on early feedback, so that, in the end, you create a product or service that’s valuable, useful and desirable – or scrap it early on with minimal investment.
What Is a Minimum Viable Product?
Eric Ries, author of the influential 2011 book “The Lean Startup,” was one of the first people to popularise the concept of the MVP. According to Ries, “A minimum viable product 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.”
Put simply, it’s a very basic version of your product or service that you market to test your assumptions about your business model. It has the core features required for the product to work, and nothing more.
The purpose of an MVP is to test the market and to give you more accurate information about your customers’ needs. By offering a simplified version of your product or service, you can gain important insights into what people want, and you can avoid creating something that they don’t want.
Advantages and Disadvantages
One objection to the idea is that MVPs could be a waste of time. After all, why spend time and resources creating a prototype that might be incomplete, or that might be too simplified to appeal to your target market, when you could use focus groups, market research or customer surveys to find out what customers really want?
MVPs don’t have to be (and often shouldn’t be) expensive and complex; most of the time, they’re very focused. They enable “early adopters” to identify and define the features that they do and don’t want, and provide valuable feedback on what works and what doesn’t. This can be difficult to measure in a focus group or survey, particularly because people may not know what they want until they see it.
MVPs also give you the opportunity to see firsthand how your customers use your product or service, which focus groups and surveys don’t – after all, the predictions that people make in those might not be accurate. This feedback can be invaluable to the learning process.
They then allow you to develop your product through repeated iterative cycles until you have one that robustly meets the needs of your target market; or, they help you conclude that your idea won’t work, so that you can “fail fast,” then “pivot” and try a different idea.
When you create an MVP, you can accelerate your learning using minimal resources, and you can reduce inefficiency and waste. You can also limit risk, because you’re unlikely to invest in a fully fleshed-out product if your MVP doesn’t receive positive feedback. An MVP can be as simple as a basic website or advertisement, or as complex as a working prototype.
On the downside, this strategy can be hard to sell to key stakeholders, investors and leaders. They might see it as a risky way to launch a new product or business, because you present a limited offering to your end user. However, most organisations will carefully target MVPs at people who don’t see them as low quality.
MVPs can also meet internal resistance; after all, the product might be full of bugs or missing features that your team sees as essential. Unless the leadership team supports the initiative and communicates the benefits of this learning experience, team members may not feel comfortable releasing a minimalistic product that competitors will have access to.
Organisations can use MVPs to test new products, services and ideas with external and internal customers. Here are some examples:
- Your company’s IT team comes up with an interface that will help people navigate the company’s knowledge management system. They decide to release an MVP of the new system that is very basic. Its users provide the IT team with important feedback on what they need, what they don’t need, what works, and what doesn’t. The team then uses these insights to develop a highly customised interface that works for everyone.
- A young startup company has an idea for a search-engine plugin that could revolutionise how people find information on the internet. It decides to create a landing page with streaming video that explains the technology and its value proposition, to see how customers react to it. On the site, it asks people who are interested to follow the company’s Twitter feed. This allows the company to gauge customer interest, ask and answer early questions, and build a list of testers. In this case, the MVP is the website, not the plugin itself.
How to Create an MVP
Essentially, you create an MVP to run a structured business experiment that validates or invalidates your proposed business model.
Follow the steps below to develop an MVP.
Step 1: Identify Your Assumptions
One of the core concepts of an MVP is that it tests critical assumptions that you have about your product, service or idea. In “The Lean Startup,” Eric Ries argues that the purpose of the startup is to test and prove your assumption that people will pay you in some way for your product, and that you will then be able to scale the business successfully.
So, it’s important to begin by clarifying what your assumptions are. For example, Ries outlines two assumptions that media businesses often have:
- They can capture the attention of a large enough customer segment on an ongoing basis.
- They can sell that attention to advertisers.
Look at your organisation’s business plan, mission and vision statements, and target market. What assumptions have you made about what your customers want and value?
Consider these questions:
- What is the core problem that this product, service or idea will solve for your target market? Is it worth solving? Use the 5 Whys technique to answer these questions.
- What is your USP (unique selling proposition), and is this valuable to your customers?
- What is this product’s value proposition?
- What do you most want to learn about your customers’ wants?
After you’ve considered these questions, write a testable prediction or hypothesis about how customers will react to your product or service.
Step 2: Identify the Minimum Features Needed to Start
Your MVP should have only the minimum number of features needed to test your predictions about your business model. This can be a difficult concept to grasp, as you can be tempted to keep adding features or services to make it more viable and more appealing.
It’s important to remember that every unnecessary feature wastes time and resources if customers don’t like the product. So, keep your MVP as simple as possible, and aim to release a product or service with the most basic functionality that early users will, in some way, pay for.
Keep in mind that your MVP can be anything: a landing page or website, a prototype, or a streaming video, for example. So, how you test your MVP depends largely on its format. As an example, you could create an MVP by having a website with a user interface, but with all of the “behind the scenes” functions of the website carried out by people.
One useful strategy is to make a simple list of basic features that your MVP will contain. Then, reduce this list by half, and by half again.
Step 3: Build Your MVP and Test Your Hypothesis
You now need to build your MVP and test your hypothesis in the minimum time and at the minimum cost. What is the simplest way that you can prove or disprove it?
Do this as quickly as possible, and try the product or service out with carefully selected early adopters.
Step 4: Gather Feedback and Modify
Once your early adopters have had a chance to use your MVP, ask them what they liked and didn’t like, and what they thought was missing from this initial offering.
If your MVP solves a real problem, their feedback will show you how to fill in the gaps and refine your offering. If it doesn’t, then these early testers will let you know – even if this is by giving you negative feedback about your product.
Your goal is to go through quick, repeated cycles of development of the MVP, based on the feedback that you receive, until you have a well-developed, well-targeted product that meets the needs of your market.
Don’t be disheartened if the initial feedback is negative. Remember, this is still valuable information!
Listen to what early users tell you. If you have to scrap your entire idea, so be it – by using an MVP approach rather than launching a fully featured product, you’ll have saved time and money, and you’ll still, hopefully, have time and resources left to “pivot” and try something else out.
Use this opportunity to find out what your customers’ real problems are, and to think about how you can solve them.
This article is merely an overview of an MVP approach. To learn more, I strongly recommend you read “The Lean Startup” by Eric Ries.