Building a minimum viable product for a startup is practised globally by thousands of companies. Developing a minimum viable product, using the lean startup approach, is a necessary starting point for new and emerging companies. Instagram, Uber, Spotify, what do they all have in common, apart from millions of global customers and billions of dollars in annual revenue? They all started with a minimum viable product.
Do I Really Need an MVP?
There is no doubt then, that developing a minimum viable product or MVP, is beneficial for your business. It’s an essential component for startups to understand how their product performs. Yet, it can be easy to look past the importance of an MVP and go straight into developing a full-featured product. Entrepreneurs are eager and impatient, but, just like how the turtle always beats the hare, going slow can be beneficial.
How do you build an MVP and how much does it cost? Luckily we’ve already covered these topics. It’s important to understand the full aspects of an MVP and their advantages. Before taking the plunge, make sure you’ve done your research and how much you need to budget. MVPs can provide a good return on investment, but only if they’re developed along with marketing. Minimum viable product development services can assist with this.
MVPs have many benefits such as providing feedback through consistent user behaviour data. But, they also provide entrepreneurs with a lean method to make quick changes. This flexibility is one of the core concepts behind the minimum viable product lean startup method. In his book, Eric Reis lays out the process for why an MVP is essential for all businesses. By allowing entrepreneurs to test assumptions and understand what features users want. Businesses are more likely then, to achieve long-term sustained success, rather than betting on an expensive initial product.
7 Reasons to Develop an MVP
1. Test Assumptions
Are you 100% certain you know exactly what your users want? Do you know how they will use your product? What features they will or won’t use? Do you know how they will behave? What will make them bounce? What colours will make them more likely to click your Call To Action? Do you even know if there is a demand for your product? What about copywriting? Are you 100% certain that your copy encourages users to take the actions you want them to take?
Didn’t think so.
It is impossible to create a perfect product from day 1. Every successful company created an initial product, tested how their customers reacted to it and iterated.
The main problem with developing a product is that because it is your product, you create a bias over how great it is. Do you know who isn’t biased?
When creating a product, entrepreneurs make many assumptions on how they think their customers will behave. Successful startups recognise this and seek to test those assumptions.
Let’s be frank for a minute. It is impossible to create a perfect product from day 1. Every successful company created an initial product, tested how their customers reacted to it and iterated.
This is a key concept to business strategy. Recognise that you are making assumptions about your product or service. An MVP tells you which of those were right and which were wrong. The longer you continue to spend money developing a product that you aren’t sure is working, the more money you’re going to waste.
2. Ability to Pivot
Have you ever played Blackjack? The simple card game where players have to collect cards that equal 21 without going over? During this game, players have the option to “Stick or Twist”. Either keep the cards they have or ask for more.
Like building a startup, entrepreneurs must ask themselves whether they need to “Stick or Twist”. Do you want to continue and stick with what you have? Or do you want to twist and try a different strategy?
Understanding when to pivot is necessary for developing a successful product. MVPs allow for flexibility in your development since they are small enough.
One of the most famous pivots in recent history is Instagram. The company started small, developing an app that allowed users to share photos. But, growth stuttered as competition such as Tumblr offered a similar service. The owners of Instagram noticed that customers enjoyed adding filters and editing their photos. By focusing on this feature and pivoting the business to give users the ability to filter and edit their photos, Instagram’s growth exploded. This lead to a $1B acquisition from Facebook only 2 years later!
Don’t be afraid to consider pivoting your business. Building an MVP is all about learning. Once you learn how your customers use your product better, a unique opportunity may arise that you don’t want to ignore.
A fully-featured product, however, will limit your ability to pivot, don’t make this mistake.
3. You’ll Spend More on Communications, Marketing & Sales Than You Think
Building a fully-featured product will require a significant investment. Especially if your goal is to make one that will get your product in the hands of customers. It will need design, branding, development and maintenance among other things. Spending on development only will take the budget away from other, important areas of your business. Areas such as project management, communication, marketing & sales. Without any marketing, how will people know about your product!
An MVP allows for your budget to be distributed equally. By allocating accordingly, the minimum viable product for a startup is more likely to be successful. Customers will know about it through sales and marketing and all those within your business are aware of their necessary jobs and tasks. Take off the blinders, there is more to building a business than just developing a product.
4. Ability To Launch Early
Speed is the name of the game here. The quicker you can launch your product the faster you will be able to learn about it. Customers that interact with your product sooner, provide important feedback necessary for product quality. Also, every industry has competition. Competition makes us better and floods the market with improved products. Yet, being first can help improve your brand recognition and image.
An MVP allows you to get into this mindset, to develop a product for a specific niche and test it. Select the subset of customers that are most likely to buy your services instead of reaching out to any customer type.
Getting your product in-front of customers quickly can provide an amalgamation of benefits. An MVP allows for this. Whereas, concentrating on building a fully-featured product takes much longer. In that time a competitor could have developed an MVP, tested it and made improvements while you work on features that might not be necessary.
5. Start Small, Grow Big
A common misconception among startup entrepreneurs is trying to develop a product for everyone. While there are Super Apps out there, these started small and collected data as they grew. If you try to serve everyone, you will please no-one. An MVP allows you to get into this mindset, to develop a product for a specific niche and test it. Select the subset of customers that are most likely to buy your services instead of reaching out to any customer type.
6. Minimum Viable Products for Startups Promise A High ROI and Minimal Risk
A project takes a lot of hard work and and years of development before it can be considered as complete. Created over time, a perfected product involves a higher cost that is extended over long periods of time. Making even tiny changes in a fully-featured product is not only time-consuming but is costly also. This can lead to a massive waste in investment, especially if the change fails to deliver as expected.
Although, when developing an MVP, long-term investments are not required. So if smaller iterations to the product are required, the costs will be lower. Making these changes early in the development of a product stands to benefit everyone later down the line.
Buying Amazon stock in the early 2000s is similar to making changes to an MVP. It won’t cost that much when it’s young but can be incredibly valuable as it gets older. When something breaks down when changes are made, the risk is much lower compared to making changes to a fully-featured product.
7. Improves Your Chances of Funding
An MVP that shows significant promise in its early days of development is more likely to get funding from investors that can see its potential. Venture capitalists are always looking for a good return on investment. They understand that the risk and cost of making changes to an MVP are lower compared to that of a fully-featured product.
Other examples of companies today that began with an MVP include Dropbox, Evernote, Twitter, Groupon & Amazon. These companies were able to achieve significant early-stage funding due to the strength of their MVP’s. If an MVP is good enough for companies with a trillion-dollar market cap, it’s good enough for you.
Building a fully-featured product, that instantly gives users exactly what they want is a romantic idea. The reality is, it’s simply not possible. An MVP is not only a good idea, it’s essential for any startup with a plan on becoming profitable. MVPs are all around us, products and services you used today all started with an MVP and we’re all better for it. Without MVPs, businesses would make products no-body wanted and that contained unnecessary features.
Yet, building an MVP is no easy feat. Without the right team and tools, it can take years to develop an MVP that is good enough to market and gather feedback. This is where minimum viable product development services come in. Here at StartupOasis, we can help build your minimum viable product startup using the many resources and skills at our disposal. Startup Oasis has the skills and expertise you need to build an MVP. One that you can use to pitch to investors and let you know whether your idea will make it in the market or not.
Don’t be the hare. Don’t try and develop a fully-featured product full of assumptions and features that nobody wants. Be the tortoise. Start small, test as you go along and develop as necessary. Build an MVP for a specific market so you can serve loyal fans rather than trying to please nobody.