Quick Summary: Entrepreneurs across the world are aware of the fact that what a boon MVP is for their startups. However, despite building an MVP for startups before launching their product in the market, businesses are failing. Smart entrepreneurs face struggles to establish a successful minimum working model that is feasible to sustain in the market. This blog encloses the right technique of creating an MVP with the Agile methodology, the step-by-step guideline to develop a minimum viable product for startups, the types of MVP, and the process of checking the performance of your MVP. Also, get to know about the four most successful MVPs that have turned into multinational companies that are making a profit of billions today. Let’s have a look at things you need to take care of while launching MVP.
Table of Contents
The Power of MVP
I start by sharing an incident that took place in San Francisco in 2007. Brian Chesky and Joe Gebbia had moved to New York, and the city was lit because of the International Design Conference. Visitors from across the globe had come to NY, and amongst them were some of their friends who weren’t able to get a hotel to stay. All the hotels, motels, and rooms were booked and reserved. The duo offered their friends their apartment to stay for the night and got some extra cash for their sustenance.
With this incidence, an idea struck their minds, and they utilized this opportunity for a business. They bought a few airbeds and launched a website, “Air Bed and Breakfast.” This was the birth of an MVP. Their business idea was to provide visitors a place to get a bed to sleep and breakfast in the morning.
Their idea succeeded, and their first guests became the first customers of Airbnb. This is how the duo- Brian Chesky and Joe Gebbia built Airbnb- the now $26 billion company!
This young duo’s approach is what we are going to know about today- MVP – Minimum Viable Product and its importance that why startups should always consider building an MVP project before launching a full version of the product.
MVP- The Process
Eric Ries popularized the Minimum Viable Product technique, enabling you to develop a basic working model of your product.
We are going to concentrate on the MVP process rather than how to build Minimum Viable Product. The method of attaining the Minimum Viable Product is used repeatedly by continually modifying the product design and upgrading by the team members until the final one is achieved.
The final version of the MVP product provides the most validated learning about the end-user/customer. MVP consists of all the mandatory and core features that a user wants in your product based on the feedback from early-adopters.
In each step of how to build an MVP for startups process, you discover the risks and clear out the assumptions. You are left with only the core functionality in your product core.
Let us consider a scenario to understand the importance of the MVP process:
An entrepreneur wanted to build MVP for startups – a mobile app for restaurant owners to help them in their internal functioning and set customer bookings. He plans everything with his team and finalizes the set of essential features for the app. He finds few friends who are interested in investing and makes them the app co-founders.
After the hard work of a year, with his team, he built an MVP app as imagined, with the core features that can help restaurant owners establish their business more robust. It contains features like drag and drop interface, event management, reviews, social networking, real-time messaging, check-in options, photo gallery, maps, and more.
However, when he took his app idea to the restaurant owners, they were reluctant to accept it for a few primary reasons:
- They wanted a website and not an app for their restaurant.
- They were not technically skilled to operate emails and stick with the app for the entire day.
- They didn’t need any digital medium to aid their business. They were okay with the ongoing practices.
In such a case, we can relate the entrepreneur’s situation with this quote by Peter Drucker, which says that no matter how efficiently you undertake any procedure, it is of zero use if that was not needed in the first place.
Such a situation of the entrepreneur would not arise if he had gone step-by-step following the MVP process, where, in each phase, you qualify your decisions by asking two questions:
- What am I risking the most?
- What little can I test and experiment to judge my assumption?
As he qualifies and removes redundant obstacles in the iterative steps, he would not have reached the end-product that no one desired.
In today’s digital edge, to build MVP for startups is most required of all the times. Here is the reason why.
In the last few years, entrepreneurs have increased the use of MVPs than ever before. Looking at the startup failure rate, the traditional way of thinking about an app idea and executing is no longer practical.
To roll-out a full-fledged product with success guaranteed, you need to develop a Minimum Viable Product MVP for the same first. Before we go ahead, let us check out the three primary features that your MVP must-have.
Must-have features for your MVP:
- Sufficient features for customers to adopt your product and those features should quantify your base idea.
- A feedback mechanism that will help you learn more about what your customers want in your product.
- Future benefits for your first customers.
MVP and Agile Development
You may either develop your MVP with any one of the two methods: Agile or Waterfall. However, as you compare the traditional Waterfall method with the Agile approach, you will get the most efficient advantage out of the minimum viable product development process done by following the Agile process. You might be wondering how to define MVP in Agile; here’s how.
You can progress your MVP development only after each phase is wholly developed and tested in the Waterfall method. The next stage is entirely reliant on the first. Such a process is lengthier and has a high interdependence rate, which may lead to a crash. You may consider Waterfall is a sequential process.
In the Agile method, how to build MVP in an incremental pattern. Your scrum team starts working on the final version of your MVP. The team works for a short period, known as a Sprint. Within 2-3 weeks, a Sprint delivers a final version of the product, which again enters another Sprint.
During a Sprint, the team regularly comes together for meetings, generally known as stand-ups, quick 5-10 minute meetings. In the stand-ups, they discuss the everyday progress of each team member and find out and eradicate the obstacles that hinder growth.
The Advantages of Using Agile MVP Development process:
- As the Agile MVP development is based on dividing the project onto small sprints, the team can quickly respond to changes or market needs.
- With the help of MVP developed with Agile methodology, your customers get your end-product sooner and give feedback. This feedback can help you with your product’s further development ahead.
- After each sprint, your team tests your product and reworks on it immediately instead of waiting until the project’s end. This saves a tremendous amount of hard work, time and money
- The Agile MVP development method encourages product building keeping in mind your customers.
How to Build MVP for Startups?
Here is a step-by-step guide to build tried and tested MVP. Let’s take a look at the MVP development process and significant thing that you need to keep into consideration while launching an MVP.
1. Market Analysis
First of all, you need to ascertain what your customers need. Your product may be a new invention that fills a needy void, or it can be an upgraded version of an existing solution. Your competitors will have thought of all the possibilities, and hence, you must study the market before you present your product.
To ease your research, you can set up short-term and long-term goals. These targets will enable you to overcome all the shortcomings on your way. Most of the startups fail because their product was not needed in the market- there was no market demand for the solution.
Once you have a clear idea of what you intend to build, you have your unique selling point USP. With this robust and firm pioneering step, your building above is going to stand tall and secure. Some tools that can help you with market research and competitor analysis by providing website traffic, engagement geography, and useful keywords and much more are:
2. Express your idea
Only you can generate the value of your product. It is your obligation to convey the importance of your product to the customer. Bring the following points in front of your target market;
- How will your product be useful to your customers?
- Your product answers solutions for which problems of the customers?
- Why should users buy your product?
As you will express your product idea to the customers and generate an urge, it will only trigger them. So, that’s why it always advisable to build MVP for startups before you start developing the product.
3. Define user flow
Next, you must design your product so that the user gets stuck to your product and senses the next step to take. This is possible if you develop the product in a user-friendly format with a quality user experience. The best example of MVP to make you understand a smooth and intuitive user-flow is the Zappos website.
Zappos enables you to shop shoes online, and hence on the home screen, you will come across all the relevant tasks like finding shoes, buying, managing, and receiving orders. Your customer will be happy as they can solve all their problems with your product intuitively. Once these phases are clear, then you should move to decide the features for your product.
4. Define MVP features
Now that you have finalized all the stages that your user will take to use your product, start creating a list of features that you think your user might want for each step. However, you have to eliminate the features that are so good to have but not necessary.
At each stage, think about which features will be indeed helpful to your users. With that ruling out, you will have a list of minimal features that your product should have. Ensure that your user has just the right parts for a beginner product, which keeps them hungry for more features, yet satisfied with the minimal elements.
After identifying the features, you need to prioritize them. Classify the features like must-have, should-have, like-to-have, and add-ons. Prioritize those with must-have tags because your MVP will have only the essential minimum features.
5. Build your MVP
Finally, now that you have assembled all the MVP features, you must keep a strict balance between the minimum and workable. Other things that you must take care of are:
- Your MVP should serve at least one target audience.
- It should solve one core problem.
- A satisfying and engaging user-experience.
- Develop your MVP gradually and quickly launch it.
6. Build, measure, learn
If you think that developing your MVP has done all the work for you, you are not right. Post delivering your MVP; you have to test its functionality and acceptance from the audience. Collect feedback from the users and start working accordingly to improvise your product.
Types of MVP
It is not mandatory to launch an MVP before you develop your product. Instead, you may follow varied approaches that work in your favor. The idea is to get your target customers’ viewpoints regarding your product. As you get favorable responses and feedback, then you are good to go.
Here are some examples of MVP types that can prove beneficial before you present your product to the market.
A customer will see a gateway to your business via your landing page. It is the first mark of your business. It’s the front-face of your product. Hence, make sure that your landing covers all the explanations regarding your business, your product/solution, and how your product/solution will solve their problems and ease their lives.
Urge your customers to join or sign-up with you on the landing page, and such a conversation will turn into a potential lead for your business.
Airbnb had first set up a landing page, which was their MVP, and ultimately the page enabled their business idea to explode into success.
Videos are so comfortable. Users have to make no efforts, and the video explanation accomplishes most of the work. A video has the potential to present your business idea so aptly, and your users will accept your solution even when they’d not felt the problem in the first place.
Dropbox developed a video as their MVP, and overnight, they had made 75000 sign-ups. That’s the power of an explainer video. Your technical team can portray the functionality of your product, its features in the video.
By sharing a picturization, you share a motion that is much more helpful than just sharing your vague and imaginary idea in front of your customers.
The Wizard of Oz:
In this MVP pattern, you trick your customers showing them that you are selling the fully-fledged product when, in reality, you are making all the effort to do the behind-the-scenes work. Though tricky, this one is a beneficial MVP testing solution.
If your idea gets a lot of appreciation, you will be overburdened. But you can then switch to building your product systematically. The Wizard of Oz technique is also called Manual-First MVP or Flinstoning.
This approach was implemented by Zappos, where the founder Nick Swinmurn would buy the shoes once he gets an order, instead of setting up an inventory.
This method of MVP development is many times confused with the Wizard of Oz. The difference between the two is that you replicate your automated system into a human-service format in the Concierge, and your customers know about it.
Wealthfront initially started their automated service in the form of manually created and delivered investment plans.
Use this method when you are not sure about how your customers will accept your solution or not. And choose the Wizard of Oz method when you have explicit knowledge and surety of your answer.
This MVP is a compound between the Wizard of Oz and the Concierge. The idea is that you use the existing websites, tools, and services to present your business idea. So, you use the bits and pieces of several existing solutions and implement them to check if your idea will be accepted.
Groupon used this way of MVP by combining WordPress, Apple script, and Apple Mail. However, the only restriction of the Piecemeal method of developing MVP is that collaborations might not be easy.
Single featured MVP:
As the name says, this version MVP encaptures only the core feature of your product so that your users are not distracted by other elements. It gives you a clear understanding of users’ feedback.
Moreover, you save tremendously on the development time and efforts. FourSquare had initially used this method by availing simple check-ins on social-media platforms.
Check the Performance of Your MVP
If you think that just by developing a successful MVP will get you there, you are wrong. After creating your MVP, you need to check how effectively it performs and how many customers are interested in your product.
Here are some of the methods to check the performance of your MVP:
You can keep an eye on your visitors by checking how often and who access your application/website. It will determine the current potential of your MVP, along with the future scope of your business.
Word of mouth-
You can predict your MVP success by taking feedback from your users. Things like- what intrigued them to use your product/app, what problems they are facing when using the app, etc. will help you learn your customers’ minds.
Determine your active application users’ feedback, and it shall aid you in qualitative results.
How many users join or register with your application can identify the strength of your MVP.
You must calculate how much you’re spending on the marketing to gain traction from users. This way, you get to perceive how much an acquired user costs you.
A number of active users-
Find out the number of active users using your application regularly. This will tell you more about your MVP compared to the number of downloads and likes tell you.
Frequently calculate the number of users that have reluctantly stopped using your service/application. You can keep a count of your active users at the beginning of the week and end of the week or the beginning and end of the month.
Successful MVP Startups turned Billion Dollar Companies
Let me share some notable Minimum Viable Product examples that have now turned up to become successful profit-making businesses.
Jeff Bezos first started Amazon as an online book shop. An MVP with the idea of selling popular books online in the upcoming two decades became the most comprehensive online shopping destination with exclusive features. Amazon is the largest of all retailers in the world.
A linking platform for college students, earlier known as Thefacebook, has gained the virulent attraction from college students and individuals of all age groups. Mark Zuckerburg’s answer to how to create Minimum Viable Product needs no more explanation to realize its value.
Instagram, which first came as an image filtering mobile app, nine years ago, has become the most frequently used social media platform.
The founder of Zappos, Nick Swinmurn, hiked his great idea of selling shoes online without owning an inventory. His MVP was just the website, where he listed the shoes; on every order, he would purchase the shoe from the store and deliver it to his customer.
I am sure that by now you have cleared all your queries and are ready to build MVP for startups. Remember, your MVP does not have to be perfect! Follow the strategies and steps to build an MVP for your business idea.Optimize your path to success with the Agile leaders at Bacancy Technology, who will help you to develop your MVP in an Agile manner, which will deliver risk-free results. Our MVP development services will enable you to kick-start your Startup.In case of doubt and suggestions on how to build an MVP for startups, feel free to get in touch.