How To Grow Your Startup With Minimum Viable Product

Everything you need to know about building a Minimum Viable Product (MVP), before you even start your business.

But let’s start from the beginning.

You’ve just figured out what your product is all about. You’ve talked to investors and they kind of like an idea, but would like to see it first.

You are excited about bringing it to the world.

So you’ve started to look for developers to make it for you, because you don’t have a team yet and / or no technical skills to do it yourself.

When you finally found one, it occurred that it’s going to cost you more than you have assumed, consuming even more time.

After talking to developers they suggested to create an MVP first, instead of developing a full product that you are not even sure if it’s going to fit customers’ needs.

Sounds familiar?

If so, you can rest assured that those guys don’t want to trick you into something. This is actually the best what they could suggest to you.

Let’s now make clear, what this ”MVP” is all about.

 

What is Minimum Viable Product (And Why You Should Take It Seriously)

MVP

The idea of Minimum Viable Product is quite simple – to build a product that offers the core functionalities to show it to the customers, but doesn’t have any of those extra features, that will be added in the final version of it.

Eric Ries, the author of The Lean Startup book and startup advisor, defines an MVP as:

 

“…that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

 

In other words, it is the product that is simply “enough” to put it in the market.

But is it, really?

 

MVP is not a prototype of your idea

So an MVP is like a prototype of my idea?

No, it’s not.

Sergey Sundukovskiy, CIO, CTO, Chief Product Officer with 15 years of experience in software development, has put it this way in his presentation:

Prototype is the way to:

  • Show that you are serious about your idea
  • Show it to others (e.g. stakeholders, investors)
  • Get seed money to develop an MVP

An MVP is not just a version of your idea with chopped of extra features, that you can ship to the market ASAP. It is more than this.

It is a product that can help you to:

  • Validate your ideas
  • Listen to your customers’ reactions (get feedback)
  • Test hypothesis about your product
  • Test the market

It can help you to find out things that you wouldn’t have come up with the other way, brainstorming with your team in your office.

To really help you to find what’s best and what’s missing in your product, an MVP should have those 3 features:

  • It should bring enough value for customers to make them willing to pay for it.
  • It should be able to show early adopters the benefits of using it.
  • It should provide feedback for further development.

This way your MVP will help you not only to show your product to the customers faster, but also will help you to improve it based on their opinions.

 

Why You Need To Build An MVP Before Starting A Business (To Save Tons Of Time & Money)

what is mvp

I’ve talked about some of it already, but now let’s recap the benefits of building an MVP before even starting a business.

Let’s start with the advantages of having an MVP:

  • You have the physical form of your product
  • You have the first round of feedback from your customers
  • You can better evaluate your idea
  • You can iterate this approach for better results
  • You already have a group of early users when launching the final version of the product

Having all this will help you to not only better evaluate your idea and develop features that your audience really want, but also will help you to save a lot of time and money.

Let’s do a quick math:

Let’s assume that you have an app idea, which development (final version) will cost you $50,000.

You are so sure about the idea that you decided to build it all at once and launch it with a lot of enthusiasm.

The problem is – no one really cares about it.

So you start to ask users what’s missing, and based on that you redevelop half of features, that will cost you another $20,000.

Congratulations, you have wasted quite a lot of money (and time, which is also money).

Now the often asked question about an MVP is this:

How much does it cost to build an MVP?

Numbers can differ depending on the product, but we can fairly assume the 30% of the overall app’s cost.

Let’s get back to your $50,000 app idea. 30% of that is $15,000. Not so much after all.

You now have a product you can show to clients. Based on our example, they don’t like half of the features, so you take it in the consideration and develop the complete app that you know they will fall in love with (because they already told you what they want), adding the missing $35,0000.

Congratulations, you’ve just saved $20,000! How cool is that?

And it may even turn out that you will raise more seed money with your MVP, which you wouldn’t do without it.

You now have the final product that people like, so the only thing left to do is to focus on customer acquisition and retention.

And if it would turn up that people don’t like the idea, you’ve just lost $15,000, not $50,000 or $70,000. That makes a difference, don’t you think?

People often ask how much time does it take to build an MVP. Again, the numbers can differ depending on the project, but assuming the 40% of the time needed to develop the complete app is a fair shot.

Disclaimer: The numbers I’ve used above are intended only to show you how valuable it is to create an MVP. The real cost of an MVP can be much higher and depend on the project.

 

Brands That Nailed It With MVPs (How To Build An MVP The Right Way)

Now, when you know why it is so important to build an MVP, let’s take a look at 3 examples of the companies that are well-established now, which started with an MVP.

 

1. Sell the idea of what you want to make

When Drew Houston released the video about Dropbox on Digg on March 2008, it drove 70k signups for it, the product that didn’t even exist.

The idea behind this simple product-explaining video was to incorporate many references that people at Digg were familiar with, so they wanted to share it. And it proved to work, as within 24 hours video gained more than 10,000 diggs.

The video played the role of an MVP, as it helped to place the product (Dropbox) in front of thousands of new potential users and gained tons of comments on its functionalities.

 

2. Test hypothesis about your product

Buffer is an app that let’s you to schedule all your social media posts across Facebook, Twitter and other social platforms.

It’s founder, Joel Gascoigne, had been in doubt if people (especially at marketing departments) really would like to use a tool like that, so he decided to test it first, without even building it.

Buffer MVP

Image source: Buffer

As a result he created a simple landing page, where he put the benefits of using Buffer, explaining what it is all about. Then Joel emailed those who signed up to get valuable insights and opinions about the product.

The feedback he got proved the idea was great, allowing him to start developing an app.

 

3. Learn from the feedback

Before Spotify became what is now, one of the most famous music streaming service worldwide, it was a startup that incorporated a four-stage product development outline: “Think It”, “Build It”, “Ship It”, and “Tweak It”.

It started with a landing page and beta version of the desktop application, where they focused exclusively on music streaming experience.

Every stage of their development process pictures the steps of building and launching an MVP, including concept testing, releasing to early adopters and collecting feedback.

Henrik Kniberg, Lean and Agile coach at Spotify & Lego, explained it this way:

  • Think It – answering the question “what are we building and why”
  • Build It – building a physical MVP
  • Ship It – gradually rolling it out to all users
  • Tweak It – iteration of the process for even better results.

With this approach Spotify is sure that every feature is exactly what users need, learning constantly about what they actually want.

 

Make Smarter MVPs

Let’s quickly sum up what you’ve learned today.

What an MVP is not:

  • It is not a prototype
  • It is not a product with simply less features

What an MVP really is:

  • Tool to present your idea in action
  • Tool to gain feedback from early adopters
  • Tool to test hypothesis about your product
  • Tool to test market fit

The most important thing to remember about when building the Minimum Viable Product is to bring value.

With it you can count on meaningless feedback that will help you to create better product that people actually want (and you will be sure about it).

Using feedback you can decide either you need a responsive website over native app, or even whether to build iOS or Android application.
If there is anything else you’d like to know or have your experience in building an MVP that you’d like to share with us, we would love to answer your comment about it.