What Is a Minimum Viable Product (MVP) and Why Does It Matter?
When it comes to building new products, the "all or nothing" approach might not be optimal. After all, a business's resources aren't endless, and a quicker market release can sometimes make a tremendous difference.
Hence, the rational distribution and use of time, effort, and money are essential when planning the creation of a new product. Below we explain what does MVP mean and provide the minimum viable product definition and the major MVP benefits.
What Is a Minimum Viable Product (MVP)?
Let's start with the MVP definition. A minimum viable product is the quintessence or backbone of the product. As a rule, an MVP is its first functioning pilot version with a basic set of features that people can use. This minimal feature set makes the product stand out, attracting users by providing a solution to their pain points and bringing them value.
Although a minimum viable product is usually small and may be simple, it's a working solution that users can interact with (this is what sets it aside from a demo or a prototype). Such an early version of the product allows us to put hypotheses and proof-of-concept (POC) findings to the test. This way, you get to obtain lots of valuable insights early in the product development lifecycle.
Moreover, a minimum viable product is about gradually developing a solution instead of investing resources in something large-scale and complicated from the beginning. Generally, it takes at least a month to build a decent MVP with limited functionality. And as time goes, the MVP design will be altered and the product expanded with new elements to evolve into its complete, full-scale, feature-rich, and market-ready version.
What can serve as an MVP? Depending on the aim of the project, you can opt for various types of minimum viable products. Actually, anything from a landing page to a website, web app, or another kind of simple but working early product version can be used as an MVP.
For example, a sleep app that only has essential features (like a simple login and sleep tracker that logs when you wake up and fall asleep) can be the MVP. Then, when the team proves that there's an expected market response, the app could be enriched with more intricate functionality (like tracking the heart rate and pulse, changes in position, sleep stages, etc.), insomnia activities, a chat assistant, and other features.
What Is the Purpose of an MVP?
The major purpose of building an MVP differs from making a minimum lovable product or a minimum marketable/sellable product. As such, one of the main reasons why entrepreneurs decide to create minimum viable products is to test the viability of their ideas in the real market without devoting much time and effort to development.
A gradual approach to product creation allows for saving the business and startup budget and mitigating risks, as massive development projects take lots of time and require substantial investment. Hence, if you've poured lots of money into a product no one cares about, this can lead to business failure.
Another major aim of working on a minimum viable product is quickly launching a product. It has to be fitted with just the right number of features so that early adopters and customers can gain value from it. Thanks to thorough planning and detailed feature prioritization, the team picks out the must-include functionality that'll form the foundation of the future product. They work on it first and release it fast to check hypotheses and analyze performance. Then, based on observations, they figure out how to move on with the project most optimally.
Importantly, since the MVP meaning focuses on the "viable" too, this is done to obtain feedback from the audience and make conclusions on what works, what needs improvement, and how to proceed with further development. In essence, the lean startup methodology allows you to iterate and learn as you go, forming the product development roadmap and other major components based on what you've learned as a result of trial and error. First, you build, then measure and analyze the outcome, and, as a result, aggregate knowledge that'll help you steer the business in the future.
Benefits of Minimum Viable Products
By working on a minimum viable product and releasing it for the world to see, the team gets multiple wild cards. In fact, giving a few MVP examples, numerous renowned brands like Airbnb, Spotify, Dropbox, and Amazon have used the approach to their benefit. Now that we know what is an MVP and what it's for, let's line out which gains it can offer.
Hypotheses Testing and Idea Validation
Validating market need and demand with a functioning product is much more effective than running surveys about a hypothetical one. As such, your team must have come up with lots of ideas during the discovery phase when you gathered for brainstorming sessions, shared research findings, and planned how to bring the product to life. But is there really a market need for it? Is it worthwhile, and will the investment pay off? You won't know for sure without releasing a real product.
An MVP can provide the opportunity to screen your ideas, validate hypotheses, and test out their feasibility early on. You can find out whether you were right about the shortlisted project requirements, brand hypotheses, market findings, concept, and profitability forecasts. It's somewhat like an experiment or tool that shows the product's real impact. It hints at how to keep developing it best according to the conclusions you make from applying various MVP testing methods.
Dodging Big Strategic Mistakes
What's for other risks that can be avoided, an MVP is perfect for testing how your business model and strategy are working in the real world. Once again, you could be wrong in assuming that your approach is optimal and could have overlooked something in your messaging, marketing, pricing, or other strategic areas. You can make such discoveries thanks to useful MVP tools.
Furthermore, the market is prone to change, and sometimes you need to be alert about the sudden need to alter things and change the plan. The truth is that at times there's no other way but to decide on a startup pivot if you want to keep the product floating. By focusing on startup analytics and listening to feedback on the MVP, you can safeguard your project from a disastrous outcome.
Mitigating Investment Risks and Cutting Costs
Surely, many business owners would prefer their target audience to see and use the final version of the product straight away. But there's a risk of pouring in tons of resources and investment that might not bring the expected return. What if you're wrong and no one needs the product or that elaborate feature you'll spend months developing? An MVP can clear things up.
One of the advantages of minimum viable product development is that you can test the user response to what you're building. It's like a security net or insurance that can safeguard you from tons of lost investments. Plus, the MVP cost is much lower than what you'd need to create a full-scale product. This way, you focus on the basics first and then build upon them, releasing improvements step by step.
Freeing the Team from Useless Work
As follows from the above, by choosing the minimum viable product development path, you could better allocate your team's effort or that of the company you've hired, helping them focus on the work that truly matters. It's a bridge that takes you from assumptions to clarity, getting you closer to achieving product-market fit.
It's always disappointing to admit that what you've spent hours of human resources on was worthless. Not to mention that the developer rates are usually high, so wasting engineering hours on full-scale development on guess-backed features won't do the business good.
Quicker Product Release and Efficiency
Another undeniable pro of minimum viable products is accelerated development time and delivery. This is crucial for those businesses that have the desire to reach the market faster than competitors do.
If you work on core features, leaving the rest for later, it becomes much simpler to release a working MVP much more rapidly than if you'd build the whole feature-packed solution straight off. Certainly, an agile minimum viable product has to be bug-free without any glitches. So it should only go live after going through a detailed QA testing process.
Building a Better Product
An MVP is a solid way to connect with the audience via a tangible product to collect feedback and analyze user satisfaction. By looking into the product performance metrics, first-hand comments, and customer behavior, you can find out which flaws need fixing, how to make usability better, pick out what to build next, or make informed decisions about which direction to move in.
You can also discover that some features don't resonate with the audience, are unneeded or require amendment. Agility is a definite strength of MVPs, so you become flexible to make changes before the product grows too big and complicated to be easily modified.
Plus, modeling the product around the end-user needs instead of your guesses is one of the pillars of product-led growth. This is when the product brings so much value that it becomes quickly widespread among the masses naturally on its own and is what most entrepreneurs aim at achieving.
First Traction and Possibility Profit
Importantly, an MVP launch gives you a chance to attract your first clients and maybe even make your first sales. Early adopters are invaluable for startups or new projects as these people will be the ones to give your product its first test drives and provide you with reactions to assess. Thanks to their contribution, you can better understand the actual customer experience and how well your product is received.
Of course, if you have a monetization plan in action, your can already start making money on your minimal product version while you work on after MVP expansion. And an influx of cash won't hurt, right?
More Chances to Get Funding
If you're a business planning to raise funds, then having a functioning minimum viable product is integral when pitching to investors. The thing is that potential investors really care about the feasibility of an idea, and they want to see proof of traction, paying clients, numbers, and analytics to verify that the product is worthy. Such points have to be accounted for during pitch deck creation.
Long story short, when you have a working product to demonstrate and some traction to show, your chances of getting money and an investor or VC interested are much higher during a startup funding process. On the contrary, by choosing to invest in full-scale development without traction, you can deprive yourself of the possibility of convincing investors and getting funds.
On a Final Note
The bottom line is that opting for the minimum viable product development path provides you the chance to ensure whether a specific business idea has a real shot at being successful or not. It accelerates lots of processes, too, as you get to confirm or refute your assumptions in a rather quick timeframe without risking investing too many resources.
An MVP is a scaled-down yet usable and clean-cut version of the product with a small and sufficient feature set that solves a real user problem. If so, it becomes a way to discover business opportunities and breaches in the current strategy, evaluate demand, mold a more solid plan toward success, and craft a better product that'll live up to user expectations. Basically, this is what the MVP meaning in business involves.
If you need a team to help you build a decent and high-quality minimum viable product within a short time, Upsilon provides MVP development services for startups and mature businesses. We have already helped over 25 companies create MVPs and scale their products. Plus, we're transparent about the pricing, so feel free to make a quick estimate for your project using our MVP calculator or contact us to get a more detailed estimation and discuss your ideas!