When planning for development for your startup, how are you going to prioritise your development? Do it with an the intent to build a MVP. Minimum Viable Product (MVP) is a product that has core features for early adopters and the limited group of initial users of a product. Wikipedia has a comprehensive explanation of what exactly MVP is.
There are two main ways of thinking when it comes to MVP.
People belonging to the first school of thought argue that MVP is the first shippable product that is delivered to users. Kickstarter and other such platforms have numerous prototypes that have been built by developers. Many find that making a product available to early users is an effective way to gauge how the product is going to be received.
Contrarily, others believe that the use of MVPs would help validate the existence of demand for a product, or in certain cases, the product itself. It helps create interest for a particular product even before the full version of that product is ready for publishing. If you make a sales page and have interested visitors sign up, you may be able to generate a revenue stream even before your product is ready to be launched in its full version. You can read more on TechCrunch on how to create a Minimum Viable Product.
Besides these two schools of thought, there are a number of hybrid versions that are worth taking a look at. Since there is no one way to do MVPs, a large proportion of the conversations centered around MVPs look at a wide range of examples. In fact, some understandings of MVPs have deviated far from a traditional understanding of the word “product”. For instance, Dropbox used a video, which by no stretch of the imagination falls under the conventional definition of product, to measure interest.
Ship to Market for Early Validation
One of the biggest advantages of building an MVP is that it helps you validate your product, service or idea quickly to decide whether to continue pursuing your product idea, and if so, whether and how to modify it. MVPs are only effective when you listen to the market feedback you receive.
“One of the most important lean startup techniques is called the minimum viable product. Its power is matched only by the amount of confusion that it causes, because it’s actually quite hard to do. It certainly took me many years to make sense of it.”
– Eric Ries
In most cases, startups are based on a vision that revolves around a new product or service, one that is believed to be embraced by a market due to its ability to solve an urgent problem faced by that particular market. Like many established setups, startups opt to create a full product based on their initial vision and subsequently make it available to the target market. This works many times, but it is often the case that there isn’t quite as much traction as initially thought. This could be either because the market was not chosen carefully or the product was not compelling enough.
That is exactly why there is a high degree of risk associated with developing a full product and then testing it in the market. The high level of uncertainty that is associated with startups is further elevated because the product or service being offered has not been tested. The obvious question that arises is how it is possible to test a product that has not been fully designed or implemented.
Although established companies and startups operate on largely the same management foundations, established companies usually serve a familiar, established customer base while startups do not enjoy the same level of certainty. That is why it is advisable that startups operate in such a way that they will have a chance to learn while making sure their vision is viable. MVPs act as an effective way to replace ambiguity with certainty with minimal risk and over a relatively short time period.
The most efficient way for a startup to learn is to experiment and test different versions of its products against the various metrics. Such experimentation helps reveal whether the original idea is valid or invalid, and any possible changes that can increase the level of viability of the product.
Test Your Assumptions
One of the biggest problems faced by startups is that any startup is based upon two key assumptions, namely the value assumption (creating a product that provides value) and the growth hypothesis (creating growth in the market). By testing their product, founders of a startup can put themselves in a better position to solve the problems of people in their target market.
It is necessary for a startup to validate its growth and value hypotheses at the earliest possible opportunity. For that to happen, it is necessary that the startup develops a version of the product that is at a level of completion whereby it can show the level of value that it can bring to customers in the target market.
Since MVP contains just the bare minimum core features of a product, they require less time to develop as opposed to a completed product. Yet, for an MVP to be an effective testing tool, it is necessary that it includes the capabilities necessary to measure its traction in the market. It may be difficult for designers to avoid including features requested by users into the initial development, but they should resist such temptation and instead focus on the various experimentations that will help measure the impact of the MVP.
It is essential to note that the metrics designed to test the effectiveness of an MVP should go beyond feel-good results and go to the real business impact of the core product. Vanity metrics, as they are often described, on focus on the sticky engine of growth, and track just the number of customers newly acquired. Even though steady growth indicated by this metric may be encouraging, it is not necessary that the startup is making any real progress if customers are being disengaged at the same or a higher rate as they are being engaged.
The startup label is typically applied to small, new companies, but it can also be extended to companies that are already established but are trying to break into a new area to boost their level of growth. Regardless of whether the startup is a group of inexperienced people or an established enterprise, it can benefit from the learning and ideas that result from testing versions of the minimum viable product against relevant metrics. This helps businesses create products to target their customers in a particular market with greater precision and effectiveness.
Lean startups must focus on improving the efficiency with which they develop products, and the speed at which they reach their target market with the right products, availing the all-important first-mover advantage. It is imperative that startups reduce wasted development resources by releasing an MVP at the earliest practicable opportunity. A lean startup uses MVPs to target customers and test the growth and value hypotheses using relevant metrics. The initial focus of development should be on answering basic questions related to the growth and value hypotheses. Only after this should the focus shift to the actual engine of growth. Occasionally, more than a single type of engine propels growth but a majority of successful startups focus on one engine at once.
The concept of a lean startup is that the real product is a single or group of experiments that help reduce the high levels of uncertainty at the initial startup period. Startups can monitor their progress based on the learning that results from such experiments. The higher the rate of acceleration, the more chance the startup has of releasing a product that closely matches what customers in the target market are looking for.