When it comes to software development, adopting the Minimum Viable Product approach is a wise idea. It allows startups to save time and money and receive valuable feedback on the solution and its primary features. With this approach, entrepreneurs will find out whether their idea is worth investing in or not.
So what exactly does the term “minimum viable product mean”? And what benefits does it bring to startups? In this article, I will shed some light on the topic of the MVP and discuss the most famous examples of minimum viable products.
Basically, MVP is a version of your software product that comes with only the most basic functions. It is launched with the purpose of getting feedback from early adopters. Their reaction will show what should be changed/ deleted/ added in your software product.
The concept of the minimum viable product can be illustrated the following way:
Significance of MVP for a startup
According to the statistics provided by CB Insights, the absence of market need serves as a reason why 42 percent of startups fail.
Given these figures, it becomes clear why building an MVP becomes the first and foremost task for any startup. Its core idea lies in getting feedback before you proceed to developing a fully-fledged project. You analyze the customers’ feedback and decide what to do next. Basically, you have two available options. You can pivot your business idea. The term “pivot” supposes that you can iterate your strategy to create new hypotheses and test it. Alternatively, you can give up your business idea completely.
Either way, the launch of a minimum viable product helps your startup save costs and avoid failure.
Expected benefits for startups
Let’s outline the key advantages of the MVP approach for startups briefly.
1. Quick launch
Since a minimum viable product requires only basic functionality, specialists offering MVP development services will build it much faster than a full product.
As a result, you get better chances to release your product before a similar solution enters the market.
In its turn, a fast launch will help you test marketing strategies earlier and scale your business properly.
2. Gaining investors
Investors need to see the initial interest in your product to provide you with financial aid. On that score, the launch of the MVP is a sure-fire way to show the demand for your product or service.
Provided that the feedback from pioneer users is positive, you can freely present your business idea to investors.
3. Cost efficiency
Since the functionality of your minimum viable product is limited to one-two basic functions, developers will complete your project within a shorter time-frame. Consequently, development costs will be lower.
Besides, the immediate feedback from pioneer users will allow you to add new features and improve the existing ones gradually. With this approach, the product development process is getting less costly.
4. Narrow focus
The MVP concept will make it easier to come up with the unique and compelling value proposition. You will not be distracted by adding sophisticated functionality that may turn out completely unnecessary. Instead, you stay focused on the distinctive advantages of the product you want to sell to your potential customers.
To achieve this goal, you will become especially selective as for the functionality you want to include in your minimum viable product.
5. Better insight into your potential customers’ needs
Comprehensive research of your target audience is crucial, no doubts about it. However, honest feedback from the first adopters works better than even the most advanced business analytics. It provides you with the most accurate data.
Your customers can tell you what features should be added in the new release and what functionality you can easily do without.
Examples of the most successful MVPs
There is hardly a person who does not know about Facebook. Today it is a complex platform offering different products and services. Not to mention its status as the dominant social network.
However, few people know that, initially, Facebook had a simple concept. It was designed as a universal directory for Harvard students only.
By narrowing their focus, Zuckerberg and his team avoided pitfalls common for many startups in their early days. For example, they did not spend too much time and money on building unnecessary features.
After several months after the release, Facebook added three other prominent American universities that are Yale, Stanford, and Columbia.
On September 26, 2006, everyone aged 13 years and older got the chance to register on the platform. Thus, Facebook gradually became the biggest social network as we know it today.
Spotify is a classic example of an MVP with one dominant feature that came off with flying colors. Daniel Ek and Martin Lorentzon set themselves to create the best music streaming product. So, they stuck to one main feature, which was, as you may guess, music streaming.
Spotify’s MVP was a desktop version of the app presented to the closed beta. This way, the company tested the feasibility of their business idea in the most cost-effective way.
The product offered at a freemium price became popular among music fans, including influential music bloggers from Sweden. They saw the true value in this desktop application and started promoting it further.
In the short run, Spotify enhanced their product by building a mobile app.
This company also decided to develop a minimum viable product with a single prominent feature. The application should allow users to check-in in different places and receive badges as a reward.
As soon as the application became popular, Dennis Crowley and Naveen Selvadurai started iterating their product. They added recommendations, city guides, and other functions.
MVP is a great concept that will help you validate your business ideas in the early days of your startup. With its help, you collect initial feedback from pioneer users and investors without significant expenses. As a result, you can grow a client base and enhance the product.
Dmitry Chekalin, CEO, Codica