Rome wasn’t built in a day. The same works for software products and starting any kind of business, including MVP. The formula of success is to lay bricks step by step.
You may think that such businesses and apps like Airbnb, Facebook, Uber, Amazon, or Spotify were born to be successful and just rushed into this world already popular and swam in money. But only some remember how these apps looked when launched.
Indeed, it is hard to imagine that those software giants started from an MVP with a plain design and limited functionality. And it can be even harder to understand that they gradually grew their business.
Unfortunately, according to Forbes, 90% of startups fail.
And an obvious way to improve your odds is to start with a minimalistic version of your idea before you know it’ll work.
So you start with the MVP:
What is MVP?
A minimum viable product (MVP) is a product with a limited number of features that solves at least one issue of your targeted customer. It helps you to validate a product idea in the early stage and receive feedback from early adopters.
Frank Robinson first established the MVP concept in 2001. However, it became popular only in 2011, thanks to the Lean Startup Methodology introduced by Eric Ries.
According to Ries, MVP was called to drive, develop, and grow a business with extreme acceleration.
He says that the primary purpose of an MVP is to be “a version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort.”
Interpreting it in a more business-beneficial language, your company can opt for MVP development because you are eager to:
release your product quickly
test your business idea before wasting a large budget on the full version that may fail
discover what appeals more to your target market and what is best for their needs
iterate it and improve your final idea
Having defined the MVP term in general, there is a need to understand what MVP stands for: what “minimum” and “viable” parts mean.
So, let’s take a closer look at the “minimum” and “viable” parts:
The combination of “minimum” and “viable” in MVP
Minimum means that we include only essential, most critical functions. It does not mean that we create a terrible or poor product — minimum calls for solving only one issue out of a maximum range.
Viable means that your product still delivers enough value to your early users. The product stays interesting, fast, and useful for a targeted customer.
Minimum and viable mean that your product is without extras but with core functionality. You can think of it like pizza and cheese in your software: all necessary ingredients are included.
But in the final version, you can add tomatoes and chicken.
It turns out that a balance between a minimum and viable is crucial for your success.
You usually cannot build something huge before making a tiny version of it.
You have to build it gradually.
The car on one wheel will not go, and it will not be a full-fledged vehicle.
Thus, we recommend you start small and improve future versions of the product.
Firstly, we learn how to build a skateboard.
As soon as we see that the user is interested, we improve the product, turn it into a scooter, then into a bicycle, and finally, we deliver a car.
[todo: custom image with the above idea]
But, you now may say, “yeah, that’s great, but how can I apply this approach to my specific case?”
And the best way to answer this question is through a few great examples:
Famous MVP stories
There are four main reasons to start lean:
- Save money and reduce rework The founder of Zappos, Nick Swinmurn, did not have enough money to develop software.
Moreover, he did not even know whether people would buy shoes online. So, he decided not to invest a great fortune at first.
Instead, Nick started a simple website with one key feature.
He uploaded photos of shoes he took in local shoe stores. And once someone clicked the “buy” button, Nick went to the shop, bought shoes, shipped them, and handled payments.
He did most things manually at the beginning. It all started as a several-hundred-dollar business.
Now, Zappos has more than $1 billion of revenue.
In shape Zappos is now, it’d take millions of dollars to build.
But Nick did a smart thing. He started small, invested little money, and reduced the total amount of work for the first version.
Most startups change their directions multiple times before they find product-market fit.
It takes less effort and money to make all these pivots with a smaller product and feature set.
So with lean MVP, you save not only once when you launch it but also whenever you redesign your product.
- Release fast and save time Imagine that you’ve decided to develop a web app with a maximum range of features. You put in tons of effort, spent a lot of money, and MVP development took two long years.
Eventually, you launched, and nothing happened.
All your efforts in building any kind of traction fail. People are not interested in using your product. There is no real need on the market, and it’s far from revenue and profit.
It’s the worst nightmare for any founder.
If your startup is going to fail, it’s better to do so within three months instead of three years. No?
MVP is called to minimize the time for software product launch.
Apart from that, a sooner release is a prerequisite for success.
The Linkedin co-founder Reid Hoffman once said: “If you’re not embarrassed by the first version of your product, you’ve launched too late.”
LinkedIn MVP was launched just after six months of development.
The fast release of LinkedIn helped it to differentiate itself and gather early adopters’ feedback quicker than its competitors.
Another great example is Etsy, a marketplace for craftspeople.
Founders launched the first Etsy version just after 2.5 months of development. Now, they are estimated at 2 billion dollars annual revenue.
One more time, fast release led to success.
- Test business idea and learn about your customers sooner One more great example here:
Back in 2006, Spotify’s goal was to gain traction for their music streaming service.
At that time, pirate services like LimeWire and The Pirate Bay were the primary reasons people were not paying for the tracks.
So, Spotify founders Martin Lorentzon and Daniel Ek were thinking hard about making people pay for the music online.
But they haven’t spent months in analysis paralysis.
Instead, they launched a very minimalistic MVP version in a short time and started getting honest feedback from real users.
Fortunately for them, the idea exploded, and these guys proved that people were ready to pay for an ad-free experience.
The lesson of this story is that MVP lets you quickly test your software idea and learn from real users faster than implementing a full-featured product.
- Attract investment According to CBInsights, 42% of startups fail because they don’t appropriately respond to market demands, while 29% of startup ideas fail as soon as they run out of their own money.
So to improve your odds, you need to attract money earlier.
These days investors don’t put money into ideas. They put them into traction, working prototypes, and revenue-generating MVPs.
So the best way to fund your startup is to quickly launch the MVP, test the market and show them the functional product with an early adopters base.
This is how Airbnb, Amazon, and many other famous tech businesses were started.
Now you can see how MVP will leverage your software startup process.
There is a continuation of the article here:
https://www.softformance.com/blog/mvp/
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