Launching a new product is almost always a big risk. It may not be in demand by customers or understood by the audience, and competitors may have an easier solution to the problem.
The MVP model will help you check the viability of an idea in advance and reduce possible risks. It allows you to predict the commercial and technical potential of the project, and assess the level of future demand. In this article, we will tell you what MVP is and how to use this tool correctly.
What is MVP
MVP, or Minimum Viable Product, is translated as a minimum viable product. MVP is the initial version of a product that has the simplest functionality, but can solve a client’s task or problem. That is, such a product implements its main value for the consumer, and it can be used immediately.
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For example, the founders of Uber started their work with a very simple application. Previously, it was only possible to order a taxi, link a card and pay for the ride. The fleet at that time consisted of only three cars. This application was the minimum viable product that allowed them to test the relevance of the idea.
What business problems does MVP solve?
The main goal of MVP is to test the demand for the product and the viability of the idea in practice, as well as to confirm that the direction of work is correct. But this tool also helps in other matters:
- Saves resources, reduces time and effort for product creation and testing.
- Allows you to receive feedback from the market, identify unaccounted for audience needs, analyze points of contact with them and subsequently adjust the strategy.
- Reduces risks, protects against obviously unsuccessful ideas.
- Provides preliminary information about the product’s business metrics , including customer acquisition cost and conversion at different stages of the sales funnel.
- It helps to attract investors, because it is easier to get money for an existing product than for a hypothesis.
- Reduces the cost of developing the final product by eliminating unnecessary functions, which means you don’t have to spend extra.
- Helps build an initial customer base before a large-scale launch.
In some cases, MVP also allows you to quickly enter the market, open a business and get ahead of competitors who are developing a similar product, but with full functionality. If the countdown is in months, then MVP will give you an advantage in this competitive struggle.
When to Use MVP
According to Forbes statistics , 92% of startups close and only 8% remain on the market. The main reasons for this were identified by the research agency CB Insights . Thus, in 35% of cases, startups fail due to low demand for the product, and in 19% – due to errors in the business model.
Sometimes an idea seems brilliant, and the founders of the company customer engagement in the age of ai have an inner feeling that everything will work out – and the work begins with global plans. But later, in reality, it turns out that the model is raw, unfinished, or even wrong. It is worth knowing about this before starting large-scale development and before you have attracted investments and decided to spend a significant amount on the project.
Pros and Cons of MVP
But the MVP concept also has a number of disadvantages. Here are the main ones:
- Reputational risks. If the product is unpopular or of low quality, users may develop a negative perception of the company as a whole. Sometimes this is critical for large businesses.
- It is difficult to determine the composition of the MVP. Developers may argue about which function should be considered the most important. Sometimes it is simply impossible to cut the functions that are the basis of the project. In addition, the MVP method is not always compatible with innovative high-tech solutions .
Types of MVP
There are several approaches to developing a minimum viable product. Here are the main ones.
Monofunctional product
Such an MVP has one main function, but it does it well. For example, the first version of the Airbnb website was a simple landing page, where the founders of the company offered to rent out ph numbers part of their apartment. All the hotels in San Francisco at that time were overbooked, the idea turned out to be successful.
Another example: the popular Spotify service at the start of the project could only perform one function – stream music. Interestingly, later they added not only smart algorithms for recommendations and selection of melodies, but also author’s selections, the ability to follow friends’ music and much more.
Flintstone method
The idea is that you don’t design the entire product, you just create the illusion that it’s fully functional. So Flintstone’s car didn’t have an engine, he moved it with his feet.
Concierge service
In this method, technology is replaced by the work of a living person. For example, you want to create an aggregator site for finding people who will walk dogs for money. At the MVP stage, you can assign a special employee: he will start manually searching for those who want to walk dogs and pass on information to those who need this service.
