Why and How You Should Build a Minimum Viable Product (MVP)
Brilliant ideas that could make your startup's revenue soar are nothing but hazy concepts until tested on the market. But building a new software product requires taking risks and making major capital investments.
To reduce the risk of failure and increase your odds of success, have a software development company build an MVP first. Minimum Viable Product allows you to find out if there's a market for your product and to determine its customer value.
Let's discover how your startup can benefit from an MVP and who can build it for you.
Minimum Viable Product (MVP) definition
MVP is a very basic version of a product with only those features necessary to validate your assumptions early in the development cycle of the full-fledged product.
As well as knowing what a minimum viable product is, you need to understand what it is not.
First, an MVP is not a prototype. Instead, it is a viable product you create to use as a learning tool. It allows your startup to test a product idea on the market and collect timely feedback from actual customers.
Second, the MVP is not a raw product that customers can't use. Instead, it's a working product that solves a real problem customers may have. Think of the MVP as the earliest scalable version of your final product.
Does your startup really need an MVP?
For the CEO of a startup, an MVP should be a risk-mitigation tool, rather than a piece of tech-jargon that software development companies use.
The first reason most startups fail is the lack of a market for their product, said CB Insights in a 2019 report. And, according to the authors of an article in Information and Software Technology, "most startups fail within two years of their launch because of a poor problem-solution fit and negligence of the learning process during minimum viable product (MVP) development."
So, yes, your startup does need an MVP, if you want to reduce the risk of your product not meeting the customers' needs or, worse, lacking a market altogether.
An MVP allows you to deliver a usable product to the market much quicker and with less capital investment than it would be possible with the full-fledged product. Though an MVP is something you can sell to recover some of your investment, its main aim is to be a learning experiment. You use it to test the assumptions in your business plan and gather valuable information you'll need to achieve cost-effective product development later.
But there are other advantages to building an MVP.
The advantages of creating an MVP
The main benefits of a minimum viable product are that it allows your startup to:
- Discover if there is a market for your software product
- Test the viability of your product with minimum investment of resources
- Use customer feedback to fine-tune product design
- Shorten the development time of your full-fledged product
- Secure investors' buy-in
Let's explore each of these MVP benefits in more detail.
Identify your target market
Thinking that people will want to buy your product is the riskiest assumption your startup can make. Test this assumption before you delve into product development and make a huge capital investment you may never recover.
You can gather lots of information from market research and competitor analysis. But until you have an actual product people can use, you are still only making an educated guess about what customers need. But by creating an MVP you reduce this uncertainty, as well as discover whether there is a market for your product in the first place.
Test the viability of your software product
An MVP also gives you precious information about what your early adopters, or ideal customers, need. So, you'll be able to assess whether your product solves the customers' problem and select what features are necessary.
The information you gather lets you assess the feasibility of further investment in product development.
Get customer feedback to fine-tune your product
"The early adopters of your product are likely to be just as enthusiastic about it as your startup team is" - said Eric Ries, the person who popularized the term MVP.
They'll provide valuable feedback about what works and what needs correcting. Use their feedback to fine-tune your product and improve product design.
If your customers' feedback is negative, you're still in time to change your product, or stop its development, and contain capital losses.
If their feedback is positive, you'll know you are building a piece of software that people actually want, need, and are willing to pay for. Your development team may also identify further opportunities for improvement or come up with new product ideas based on customers' feedback.
Shorten product development time
Once you have a minimum viable product, the development of your full-fledged product will be speedier. As you'll have a clear idea about what features are needed and what aren't, you won't waste time, as well as other resources, on implementing features that nobody needs.
Secure buy-in from investors
Finally, building an MVP is an effective way for your startup to attract investors. You'll have a functioning physical product to show them and the data to back up the claims that the product is likely to be successful.
In sum, the minimum viable product is a cost-effective way to test a product idea and find the product-market fit.
Who should develop a Minimum Viable Product (MVP)?
For many startup companies, developing an MVP has become a crucial step in the software part of their product development. IT outsourcing is a smart way to get an MVP to the market. If you still have doubts, read our blogpost on when to consider software development outsourcing.
At ULAM Labs we have the experience and resources needed to create a minimum viable product for your startup. We know what steps to follow to create an effective MVP: market analysis, audience definition, core features' selection, and more.
Are you interested in developing your MVP with our software development company? Do you have any questions about how to make an MVP? Don't hesitate to get in touch and tell us about your software development project.