“A Minimum Viable Product (MVP) is a down payment on a larger vision.” — Johnny Holland
In order to be successful, companies must create products and services that delight customers. However, there's another significant component that can influence the success of the product. It's velocity. No matter how original your idea is, chances are some other company has already thought of it or is thinking about it. In other words, you have to develop fast.
Finding that ideal balance between quality and velocity can determine whether a company will be a driver of innovation or not. One specific technique that can help keep these two essential ingredients in balance is called the minimum viable product (MVP).
What is minimum viable product in Agile?
MVP, short for Minimum Viable Product, is a popular iterative process popularized by Eric Ries. It's one of the most important concepts in the product development process.
When building and scaling a new product, some companies make a major mistake. They build a finished product and cross their fingers in the hope customers will like it. Lean startups that follow the MVP technique build their products in small, incremental steps. At the same time, they analyze customers' feedback at each stage. It's believed that once entrepreneurs embrace validated learning about customers, the development process can shrink substantially.
A key concept of MVP is that you produce a basic version of your product. Once the basic version of the product with its core functionalities is built, you offer it to customers to test their response. You don't build a ton of features and functionalities and hope they align with your customers' needs. Instead, you build a single feature, test it, and use the information to plan your next steps.
Why is minimum viable product important?
Building a new product is a risky business. It takes time finding skilled talent and requires hundreds of hours of development time. In the end, there's no guarantee that you will sell your product.
However, with an MVP, you will manage to:
- Build a relationship with your potential customers. You'll get valuable feedback on what needs changing or tweaking. The result will be an improved product that has a community of users.
- Reduce the number of remakes. You'll get the chance to build the first version of the product and test it with customers. Ultimately, you'll reduce remakes of the product's features.
- Reduce costs. MVP helps you find out whether your product appeals to customers more quickly. By learning this information sooner, you will invest less money on a product that you know won't be successful in the intended market.
- Release faster. Building an MVP reduces costs and the number of remakes. You'll get a chance to release your functional final product more quickly.
- Slowly evolve. The MVP focuses on building a simple product with fewer functionalities. You can later start adding new features that are relevant to your customers.
How do you create a minimum viable product?
Before you launch your MVP, there are 8 success criteria to master:
Invest in talent from the very start
MVP development requires intensive programming and an extensive design process. Your product has to be functional and unique. You should launch quickly with a small budget.
To do this, you should have a skilled development team. Consider hiring junior developers instead of experienced ones. You'll realize that hiring one exceptional developer is more cost-effective than hiring a few junior developers.
Instead of spending time mentoring the juniors and fixing bugs, you can hire a senior developer who will work more efficiently. You can hire junior developers once your core product is built, and you start creating additional features.
Do market research
If you want to determine how viable your product would be among people, don't skip on doing proper market research. Before starting building, instruct your team to collect information about your product's:
- buyers personas
- target audience
Get early feedback from professionals
Before you begin building your MVP, seek early feedback from stakeholders. They should have a deeper understanding of your target market and give you valuable advice. Another wise idea is to hire knowledgeable advisors who can assist you with defining your MVP at the initial stage.
Check what your competitors are doing
Before you proceed with turning your idea into a product, conduct a competitor analysis. This type of analysis can give you information on whether there are similar products in the market. See what your competitors are offering and use that insight to make your product unique. It's okay to be inspired by the competition and tweak the product in order to gain a competitive advantage.
List the project features
Another critical part of building your MVP is categorizing features. Make a list based on the priority that will include features of:
- low priority
- medium priority
- high priority
If you want to make a proper prioritization, start by asking yourself questions such as: What are the pain points of my customers? What benefits should the product offer them?
Once you define your high priority features, move on to build the first version of your MVP with the core functionalities. Make sure you stick to your priorities list.
Another tip here is to remember to keep the MVP mentality throughout the entire lifecycle of your product. Every time you release new features, make sure they nicely complement the existing product and resonate with your target audience.
Receive user experience feedback
Your product ideas might be unique, but it matters little if your target audience doesn't approve. Once you finish your first working prototype, hand it over to your early adopters. Ask them to interact with the product and let them ask you questions about it. They will test it and give you their feedback. Chances are you'll notice a consistent pattern in the user feedback.
Sometimes, if you're tracking every aspect of UX you possibly can, you might get overwhelmed. To avoid getting buried in volumes of raw data, identify a few metrics that matter to you the most.
Apply A/B testing
A/B testing can be instrumental in developing better products. Although it takes a lot of measurements and data, it can help you compare two different user experiences. When you apply A/B testing, you're using statistics to see how something you've changed within your product has changed the behavior of your users.
For example, let's assume that your product is a business management mobile app for the health and wellness industry. You may want to try different pricing models to deduce which combination had a positive effect on your customers. Or, you may want to try two different landing pages.
There are several critical metrics you should consider if you want to monitor the success of your product. Make sure you don't ignore these metrics as they can help you make timely and vital tweaks in your product.
- User engagement: this metric can help you measure the current but also the future value of your product. Engagement can also be useful in improving the user experience based on received feedback.
- The number of sign-ups: sign-ups show user interest. By measuring interest in your product, you can determine how many users are converting to paying customers.
- Percentage of active users: maybe your product has 10,000 users, but that doesn't mean that they're actively using it. That's why you should measure how many of those 10,000 users are active and think of ways to make passive users return to using your product.
- Percentage of paying users: if you offer paid services, you should measure how many of your users are paying users. Try to find out why they are interested in your product, what features they like the best, and how much time they used your product before they began using paid services. Keep in mind that the number of paying users will always be smaller than the number of free users.
- Customer lifetime value: this metric can tell you how much time a user spends using your product before stopping to use it or remove it from their devices.
Elon Musk and his Teslas are a fine example of creating an MVP. He started by creating a simple electric car that solved a small problem. He kept on iterating, and continuously solving more significant issues.
He began developing batteries with improved battery life so that cars drive further. He also introduced electric buses and trucks, merged Tesla with SolarCity, and built his Gigafactory. Musk is slowly progressing towards his ultimate vision, which is a planet powered solely by the sun and eventually multi-planet habitation.
Learn from him and take similar steps. You might not be developing electric cars or building Gigafactories, but the MVP technique can be applied to all types of products and all size companies.
Once you get valuable feedback and create your product to fit your target users' needs, you'll be ready to show it to the world. Have confidence in your product and follow your vision. Every day is an opportunity to make progress towards achieving your larger goal.