In order to release a complete, error-free product to the market and reach a large number of users, an MVP version should be the number one candidate in getting user experience to the development team and laying a foundation for an optimized version in the future.
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What is a “Minimum Viable Product”?
A Minimum Viable Product (MVP) is the first version of a new product launched to the market with minimum features. It helps businesses (Product Developers) reach their first clients, and gather the client’s feedback with minimal effort.
MVP helps businesses understand the market and clients’ needs for their products. With the feedback, the company will continue to research and improve its next versions, which move toward the most optimized version in the future.
Why should we begin with an MVP?
Let’s say a business wants to make a car for sale, but they are uncertain about the market’s demand for this product. Moreover, the manufacturing of the car takes a lot of time, money, and effort. Therefore, the most “possible” option, in this case, will be to launch a skateboard product to meet the “minimum” customer’s requirement: move faster. After experiencing the product, the business will collect customer feedback, then research the market and improve their product accordingly.
Note: MVP consists of 2 basic elements: “viable” and “minimum”. From the above example, it can be simply understood that a business can launch a wheeled product because it can also move. But no one will buy wheels to move. Therefore, this product is not “viable”
According to Frank Robinson, co-founder, and president of SyncDev, who introduced the term Minimum Viable Product, MVP isn’t just about identifying the right set of product features that deliver the highest ROI—it’s a mindset for the product and management team:
“It says, think big in the long term but small in the short term. Think big enough that the first product is a solid launch pad for itself as well as the next generation and roadmap, but do not think so small that you will let your competitor get ahead of you.”
Reduce risks for the project
You may not know this, but according to a study by Statista – a German company, 70% of technology startups fail. Of the more than 20 listed reasons for failure, up to 42% of startups fail due to providing products that do not meet the market need, and another 29% fail due to running out of cash.
Thus, it is extremely important to do market research and collect product feedback from customers. By offering the latest version that meets the minimum needs of customers, businesses will receive the most realistic feedback from the user experience.
Learning is the “key factor” of an MVP version. It’s not a new idea, because your needs are also the market’s needs. Furthermore, every business would love to include everything that people need (or at least they think so). Meanwhile, the development team always wants to do everything in the most basic way because that will limit the risk.
Instead of creating a product that we are unsure if it meets the market demand or not, MVP will help businesses “listen” to customers, learn, research the market to improve the product, or even change their orientation if necessary.
Furthermore, the issue of cost is also a factor that makes MVP necessary for businesses. In the beginning, it takes a lot of human resources to build a product that includes great features, and the cost is also exponential. This is also the reason why many startups run out of capital. Therefore, MVP is the basis for the brand to create a product that meets the demands of the market.
Avoid “rebuilding from scratch”
What if you invest a lot of money and effort in launching a product, but then receive negative feedback, or can’t earn revenue because the market doesn’t need your product?
The possibility of running out of capital, burnout, and failure like 29% of startups encountered above is not counted out. Even if you have the capital or ability to fix some bugs in the product, it means having to “rebuild” the entire project. Then the business will start from scratch: collecting ideas, researching, implementing, …. And of course, they will cost lots of money.
Therefore, MVP will help limit this cost by being the most “optimal”, and “available” version. If unfortunately, the MVP is not well received, then you still have the resources, and you can get active feedback to improve the product.
How can we build an MVP?
There are 5 steps to build an MVP:
1. Draw an ecosystem map
Your business ecosystem map is a diagram showing all the users who will use your product.
First, create a diagram that shows the path the MVP will take to the market: users, customers, partners, communication channels, your customer’s customers, and other entities.
Next, define value — what your users get for using your product. Note that the value can also be indirect. The money received by your customer’s customers, for example.
Third, draw a line that defines who shall pay whom.
Finally, illustrate how your product is delivered, including the sales and marketing channels used to reach the end users.
2. Define the value proposition for each stakeholder.
What are the high-level benefits that each stakeholder in the ecosystem gains, and what are they willing to trade? What are your users’ biggest pain points and where can you add the greatest value? Chris Chilidot from ClearBridge calls this a “pain and gain” map.
3. Prepare a final MVP.
To determine your final MVP, think about the basic product features you need to deliver to each stakeholder to achieve the value you proposed in the previous step. Describe what the final MVP looks like.
In addition, in this step, you must determine how much users “pay” using the MVP and how much you measure to determine the viability of the MVP aka your success criteria.
4. Identify the greatest risk
To validate key assumptions, outline and rank the risks of the business model from high to low. The goal of this exercise is to identify potential roadblocks and points of failure early. That way, you minimize the risk of failure and major capital loss before building a full-fledged product.
5. Create a roadmap for your value.
In the final step, you’ll map out a value roadmap — the Customer Discovery journey that takes you from your current position to your final MVP. From the table, you created in the previous steps, list the core assumptions you need to test for each Risk. You will likely have assumptions that you will need to test using a combination of customer development interviews and prototype/product features.
In summary, MVP is a product version that reaches customers quickly and helps the development team to customize the product in time according to the actual needs of the market through the customer experience.