Minimum Viable Product: Tasks, Stages of Creation, Examples

Co-Founder

Alexandra Kazemir-Yampolska

Releases in the IT industry occur daily, but it becomes obvious that not everyone will be able to stay afloat. We see many startups fail for various reasons – lack of funding, and indifference of consumers.

To achieve success and become famous, pay attention to such a tool as minimum viable product (MVP).

What is MVP?

The statistics are relentless: 20% of startups are waiting for a disappointing ending, and 67% of new projects never become profitable. MVP is designed to prevent such a scenario. This is an early version that has limited functionality, but these features are enough to draw the attention of the audience, shape the attractiveness of the product in the eyes of consumers, find the pain points that customers have, and close them.

The main task of the tool is to test the solution in order to gain the reaction of customers, which allows you to explore the market segment at the lowest possible cost. In addition, it is cheaper than releasing a product of full value. And the whole process is faster. This method was used by Amazon, which helped the company achieve tremendous success. Another example is Dropbox.

The development of an MVP with minimal functionality requires less operational costs, and therefore, when testing it, the budget is saved. And if it is already limited, this advantage of MVP becomes very important.

 

Main MVP tasks

The minimum viable product allows testing an audience response, which will be the basis for testing the concept of the system for viability. MVP helps answer the question of whether the product is popular among clients and allows you to evaluate the effectiveness of your project in order to direct all efforts to its further improvement.

The reviews of the consumers who were offered the initial solution help developers to improve quality work on updating a full-fledged product and incorporating additional features into it. The analysis of customer responses allows you to detect the disadvantages of the first version at the initial stage of its creation and quickly eliminate them.

 

Main principles of MVP

 

Building MVP radically changes the attitude of investors toward your product if the goal is to raise funds, because the persons concerned are more supportive of ideas that are embodied, and not just reflected on paper. In addition, you learn to understand the audience and analyze consumer needs at an early stage of a new project, which allows you to get ahead of your competitors.

Pay attention! There is a misconception that MVP is designed to speed up a product launch when a company plans to take its place in the market faster. However, it is not true. The goal is to test the economic expediency of the project.

 

Business MVP benefits

Creating MVP is the key to developing a complete product that has the best qualities for the consumer. Thanks to this solution, it will not be difficult to interest users, surpass competitors and prevent financial risks.

 

MVP benefits

 

TOP 4 benefits of the minimum viable product:

  • Initial target audience research. In order to find out the opinion of the audience about your product earlier and analyze its functionality, the demo version should get to users faster. If you note the involvement in your project, then we can conclude that the functions that were presented to them satisfy them.
  • Testing the entire project. Despite the fact that MVP has a minimal number of functions, its development allows you to evaluate the concept of the entire system. On the other hand, when launching an application with wide functionality, it is much more difficult to adapt it for testing on the target audience. And as a result, unnecessary features will be identified that will have to be disposed of, although you have paid for their implementation.
  • Economic efficiency. The development of cross-functional applications, which is usually a longer process, also requires more financial investments than the phased creation of MVP. In the second case, it becomes possible to detect weaknesses, improve the product based on this information and increase additional functionality by reinvesting the profits.
  • Attracting investors. The issue of financing a startup is of extreme importance, it is important for persons concerned to see the product, and not just ideas on paper that have no implementation, so MVP is the most appropriate solution that increases your credibility.

 

Stages of creation of MVP

It is important to plan strictly the sequence of actions that you will follow before creating MVP. Let’s consider in detail each step of its development.

 

Stages of MVP development

 

  • Market research. This is the basis of all thriving projects, which will help not to go broke. Before starting the development process, it is important to make sure that the website or application of MVP will be of interest and benefit to the consumer. With the help of paid surveys, for example, on the SwagBucks, OnePoll, and Toluna sites, make up a portrait of your client. Do not forget to analyze the actions of competitors.
  • Creating a clear idea. Before developing MVP, a business owner must conduct a detailed analysis of his project and identify what problems has a consumer in a particular area, and determine how his product is able to close these pain points, how it will be useful to the target audience and why it is needed in general. Having formulated the answers, the result will be a clear idea that concerns the main qualities of the product.
  • Definition of a function list. When creating MVP during the development of a startup, the developer should be provided with a complete list of the desired components of the future application, so at the planning stage, such a list should be compiled. Developing a minimum-life product is not connected with the implementation of a complex framework or fancy design.
  • Building and running the MVP. Having carried out all the preparatory work, you can begin to create a minimum life product. The main task is to make it prosperous, and this is possible only if it is balanced and interesting to consumers and investors at the same time. MVP should be of high quality and bug-free, professional, concise, functionally uncluttered, and capable of solving fundamental user problems.
  • Feedback analysis. When creating MVP, you should set yourself the task of getting positive feedback in advance; otherwise, the meaning of the development is lost. And by analyzing the feedback, and the collected analytical data after testing the solution, an understanding will come of what additional functions are needed, or that it is necessary to look for and eliminate errors. To keep the MVP relevant for the selected market segment, the minimum viable product needs to be constantly improved and updated.

 

Examples of successful creation of MVP

The world knows many successful stories of creating minimum viable products, as a result, startups have become well-known international companies, and their founders have become the owners of successful businesses.

Twitter

Odeo, after losing the audio/video market due to the iTunes analogy, set out to launch a new microblogging product called “twttr”. CEO of Twitter Inc. says that you should ensure that every detail is perfect while limiting their number until you reach perfection.

Initially, the platform was used as an internal service for employees, but after the recognition of the team, it received a second wind and became open to the public. The future social network did not immediately become popular and acquire subscribers. The decisive moment was the SXSW conference in 2007.

Airbnb

The story began in 2007 when 2 men from San Francisco, with limited funds, decided to start a business. During a design conference in their city, they rented out the top floor of their apartment to people who didn’t have hotel rooms. The MVP in this case was a landing page containing photos of the property.

Brian Chesky, CEO of Airbnb, says renting someone else’s home requires building a level of trust that’s different from Facebook. To confirm the concept, the MVP marketplace was used, and the result of the project was a platform aimed at short-term rental housing.

 

Some more MVP-based companies

 

Disadvantages of MVP Implementation

When implementing MVP, it is necessary to take into account the pitfalls and important nuances, without knowing them it will not be possible to make your project profitable. Let’s find out what can interfere with the creation of a successful minimum-viable product.

Reasons of an MVP failure

 

  • Wrong priorities. If you don’t have a specific goal for which you are developing MVP, or if you focus on solving the wrong problems, the consequences will be negative. For example, your product will not attract enough customers. To avoid such a situation, it is necessary to formulate the concept accurately, define the features that will make your offer unique and distinguish it from others. If you have problems with this task, you can contact business analysts for help.
  • Lack of iterations. When developing a minimum viable product, you should always consider alternative solutions and compare your proposal with the alternative. This tactic will help make the MVP sustainable.
  • Lack of feedback. It is impossible to understand the needs of the target audience and find pain points if you do not ask the consumer and get feedback. Remember that it is important to collect customer feedback for a specific market segment, dividing them into small focus groups. In each of them, ask different questions, rewarding for answers, for example, you can give as a present a subscription to use your application.
  • Excessive functionality. Excesses in the process of creating a minimum viable product will not be useful and can annoy customers, as well as poorly designed features. When implementing the MVP functionality, you should always focus on the mainstream of consumers, and the needs of the secondary target audience should be taken into account in the second place.
  • Late start. The reason for failure can also be an untimely start, that is, the MVP should not be launched too late, however, and an early start will not lead to anything good. The balance is important, and no accelerated implementation of the minimum viable product in order to create quickly a solution that has the maximum possible functions.

 

What will happen after the development of the MVP?

After the development of the minimum viable product, everything is just beginning. Let’s talk about what’s next.

  • Minimum Marketing Product (MMP)
    MVP, once created, needs to be properly tested and then updated to make it relevant and find a way to the first practical alternative to a solution that has a limited set of features useful to the main audience. It is at this stage of project development that large rounds of investments are made, so MMP is an opportunity to monetize your solution, however, not without drawbacks.
  • Minimum Attractive Product (MLP)
    It is important for a company to develop useful features, but the product must be pleasant to use. This is how it can be made attractive to the target audience. If the client likes the design, they will tell others about it. Therefore, when preparing MLP, you should start with the UX of the product and constantly strive to create the wow factor.
  • Minimum Product Specification (MMF)
    If you want to make a product attractive to investors, pay attention to MMF. It is a feature set of the solution that is valuable to the user, which is completely new, allows you to close the pain of the consumer at a lower cost and increase loyalty of customers. The company’s expenses will be reduced and revenues will grow.

 

How to find out the effectiveness of MVP?

The process of creating the initial version has been completed, now it’s time to track the effectiveness of the product. To do this, you should calculate the following indicators:

  • Retention. The indicator allows you to analyze not only the primary audience but also the secondary one, that is, to find out how many visitors paid attention to the product for the second time. Repeated interest in your proposal suggests that the MVP has unique features.
  • Speed of activation. Analyzing the reaction of customers, you need to know their impression of your offer. You need to understand exactly how consumers relate to it, whether they turn actively to close their pain.
  • Churn rate. This ratio is necessary to determine the rollback. When creating a new product, information about how many consumers can refuse to use it is of great importance. Based on the data obtained, the disadvantages and defects of the development are determined for their further elimination.

To make MVP complete and interesting to the client, you have to go a long way, on which it is important to take into account many nuances and analyze a large number of indicators. A thoughtful approach to creating a product will be the key to the success of a startup founder and will allow him to turn a new project into a profitable business.

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