What is MVP, and how is it important for the success of any startup?

Whether a product from a tech world or non-tech industries, are we giving a product with features that are necessary and at the same time amazes the customers? How much are we focused on the time and cost relation when taking the product to the market? How many work hours are we spending to take the final product to market? Are we taking the right product to market? Companies need to ask these questions whenever they start working on a product. The solution that would arise is to build a product that is customer-centric.

Well, you might think everyone builds products for customers! That might not be customer-centric when we sit and assume what they need unless you are building what the customer actually needs and they themselves told you so. So, how do we communicate with customers and know their requirements? This is where Minimum Viable Product plays a vital role in building the "right product".

Importance of MVP in Startup/Product success

Every startup/product company starts with an innovative idea, and they build a product based on assumptions. We bring in a lot of assumptions based on trial and error. But the companies which test these assumptions in the market at the earliest and figure out which of them are working would be the winners. Others end up failing to create a market for themselves.

As per stats of CB insights after postmortem of 111 Startups since 2018, they came up with 12 potential reasons.

Of these, at least seven issues could be fixed if they are building an MVP and testing their product.

1. Ran out of cash
2. No market need
3. Got outcompeted
4. Flawed business model
5. Pricing/cost issues
6. Product mistimed
7. Poor product

What is an MVP?

The minimum viable product is that version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort- (by Eric Ries, author of The Lean Startup)

What is not an MVP?

There are many misconceptions and confusions about MVP. Still, many of us think MVP could be a product with all features, MVP is a product, a prototype, a Proof of Concept, a one-time activity, and many more.

All of these could be an activity in the process of building an MVP but should not be called a MVP.

Advantages of MVP?

Early testing opportunity: We could know if the product works before spending the total budget.

User Feedback: We could know what the user actually wants and does not in the final product. This would save us the cost as we are making corrections and focusing on the right product before spending the whole amount.

Market Validation: We could know if we are offering the right product to the right market at the right time.

How do we build MVP?

1. Idea/Problem: Get an idea or identify a problem that you assume has a market.
2. Market Research: Test the idea by doing some research. It can be as simple as discussing with your peers to collect data and analyze them. If you feel there is a need for an idea, then it could even start with you or your friend, and that would kick start.
3. Improve Idea: After the research, improve on the idea.
4. User Journey: Map the user journey for the product or service you want to bring as a solution to a problem. Always assume yourself as an end-user while mapping the user journey.
5. Identify MVP features: Identify the very core feature/s which could solve the problem. Keep them as minimal as possible and, most importantly viable.

Repeat the below steps as long as your offering is validated against the market, and you are confident it would work

1. Build MVP: Develop the features identified
2. Launch, Test, and Validate: Identify the target group, launch the product, test and collect the observations. Validate the solution offered, but hold tight to the problem you discovered. Always hold loose of your solution as the feedback you get might be totally different.
3. Improve the MVP: After validating the test result, improve the MVP.

Giants/Unicorn which are once a MVP

• Amazon:  Started with the focus of selling books online at lower cost than traditional brick and mortar shops. Now as we all know it is the largest E-commerce platform in the world.
• Airbnb: Started as AirBedandBreakfast, the founders tested the product first by renting out their own flat to industrialists attending conferences in San Francisco. Their basic idea is to test if there is a market for peer to peer renting or home stays. Now Airbnb is the dominant player in this business
• Facebook: Started with the idea to connect Hardvard students with one another via a social platform by just messaging. It is now one of the largest tech giants in the world.

Conclusion

To summarize, Minimal Viable Product is a process where you quickly move from idea to validation by burning minimal resources. The faster you test the product, the better you are with its success. In the process never forget about the viability of the product while focusing on minimal features. Every MVP we build may not turn out to be a success, but we are surely better off than building the whole product and failing.

And why did I say it's a process because it's not a one time activity, where you build, test and make the final product. It is an ongoing process to offer better product/services to customers by continuously testing, validating, and improving.

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