As a StartUp, you and your co-founders need to take an important decision pretty early on. This concerns whether you would build an MVP (Minimum Viable Product) or not. While the majority in the StartUps’ believe in the idea of an MVP and talk about its advantages there are others who see it as a futile exercise. The critics term it as a waste of time and even say that MVPs are mere sustaining innovations and not disruptive innovations – something which should be the core philosophy of a StartUp. However, when the pros and cons are compared side by side, an MVP is definitely a great idea for any StartUp. Listed here are a few pointers as to the importance of an MVP for your StartUp and the benefits it offers.
What Is MVP?
Minimum Viable Product (MVP) is a product development concept where a product is developed around its core idea or with sufficient features to launch it in the market for early adopters. The final product is launched based on the acceptance of the MVP and the feedback received from its early adopters. It is a stripped down version of your idea or something that you would launch in the early stage of development. An MVP is defined by three important characteristic –
1. It should have enough value in terms of features and usability to attract early adopters
2. It should establish the future potential of the product
3. It should facilitate a feedback mechanism for future development
Benefits of MVP for StartUps’
Defines Core Proposition
One of the greatest incentives for building a Minimum Viable Product is the fact that it allows you to define its core proposition. Your core idea is after all that you plan to attract your customers with. Every product is designed around a core idea and along with it, there are add-ons that improve its value against the competition. For instance, if you are building a taxi app, a majority of your customers would use it to book their rides. Other features such as hotel bookings or information on the best shopping destination in the city would only add to the value of the core idea. If your core idea doesn’t attract customers nothing else will. In fact not defining your core proposition in the early days may make it tough to attract loyal customers to the fold.
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Reduces Time To Market
In the StartUp ecosystem, the first mover always has the advantage. There are chances that what you are developing is being developed by another group of entrepreneurs elsewhere and the one who hits the market first among the two of you will have a huge lead over the other. Imagine the number of social networks that entered after Facebook (it wasn’t the first though) but none of them have had the share of success as Facebook has had in the last decade. When you opt for the MVP model it allows you to reduce your time to market substantially and this can prove to be a deciding factor for your success.
Lets You Test Your Product
An idea is as great as the final product and how well it is accepted in the market. Success stories of the top StartUps’ would tell you that there is no better way to measure the success of a product or gauge the customer expectations than to try it out in the market. There are two assumptions that you would have before launching your product – value assumption (the product offers value to the customers and solves their problems) and secondly growth assumptions (the product would grow at ‘x’ rate and reach so and so numbers in terms of customers or profits). When you introduce an MVP, you would have a clear idea on how close your assumptions were to the actual market acceptance of your product.
Yes, StartUps’ are all about dreaming big and bringing disruptions in the market. StartUps’ founders are driven by the adrenaline rush and are always willing to take risks. But it would be foolish for any entrepreneur to not notice the telling signs of failure. This is where an MVP adds an extra layer of the safety cushion to your idea. The feedbacks that follow the launch of an MVP allow you to identify your strengths as well as weaknesses in your idea. It will give you the perfect platform to work on your strengths and mitigate risks by working on the weak areas. In fact, most investors like to invest in StartUps’ that have gone through an MVP model or plan to launch one soon as it reduces risks substantially.
Facilitates Smarter Product Redevelopment
Irrespective of how good your initial product offering is, it will have to go through redevelopment to withstand competition and also meet the growing expectations of your customers. Since MVP allows you to gather extensive feedback on your product you will be able to work on all the issues raised by the customers in future stages of redevelopment. It is definitely a better deal compared to redeveloping an entire product that often delays you by months and can ruin your bottom-line, turning potential investors away. In other words, MVP provides you the skeletal structure of your work on the entire product based on the demands of the market.
To sum up MVPs not only help in creating a strong brand identity and reduce the risk but they also serve as a great learning exercise for the founders. If you don’t listen to market feedback and don’t make improvements (pivot) to your products the entire MVP exercise could fail. As they say, MVPs are only as effective as you make them out to be, by listening to the voice of your early adopters.