To assess the potential of their business concepts, entrepreneurs build minimum viable products. It’s a product that you can sell and that consumers can benefit from. It’s as simple as it could be and offers only the most basic features. It will take you minimum time, funds, and effort to create an MVP.
Building it should enable you to find answers to the following questions:
- Is there a market niche for your idea?
- How will people use your product?
- How much will they be eager to pay for it?
- Which advantages and disadvantages your product has, from the consumer’s viewpoint?
Thanks to an MVP, you’ll minimize your risks and expenses. If you discover any bugs in your product, you can fix them quickly and cheaply. Relying on your customers’ feedback, you can make the second version of the product even more helpful, powerful, and attractive. Besides, the MVP lets you better understand the value proposition of your product that you can set for your potential investors and when launching a crowdfunding campaign.
90% of startups fail. The remaining 10% survive primarily because their products are ideal fits for the market.
How to create an MVP of a digital product
Let’s imagine that your ultimate business goal is to launch a website. Its MVP can be its landing page. It will reveal the vision of your product. Your first clients will be able to sign up by sharing their emails with you. Three elements will allow you to test the viability of your offer:
- User interest
- Usage data
Before adding other pages to the website, you should analyze your clients’ feedback. If they say your MVP is awful, it doesn’t mean you need to close your business. Try to build a new landing page and keep testing it until you come up with a version that people will like. Thanks to the MVP, you’ll build the initial community around your product which will serve as the foundation for your customer base.
Types of MVP
All the MVPs can be classified into two categories: low-fidelity and high-fidelity. Let’s analyze the examples of both types.
A low-fidelity MVP can help you to
- get a better understanding of your consumers’ pain points,
- find out whether it makes sense to try to fix these pain points,
- predict how valuable the solution that you can offer will be to your clients,
- detect which solution of those you can offer will have the highest value.
Below, you will see the most common types of low-fidelity MVPs.
Instead of trying to sell your product to a client, you should ask them what they like and dislike about it. Let the consumers tell you their opinions about the functionality of the product, its price, promotions, and opportunities to purchase it.
By saying “micro” we mean that the survey includes just one or two questions. An average user gets distracted in 8 seconds. People will be much more enthusiastic to complete a short questionnaire rather than a lengthy one. Besides, their answers will be much more reliable.
To conduct such a survey, you can add a popup to the main page of your website. Once the user fills in their answer, they will get a reward — for example, access to exclusive educational materials or a discount for their first purchase. Try to make your questions specific and open-ended.
Most entrepreneurs perceive blogs only as a marketing tool. But you can start a blog as a way of testing your MVP. Tell your target audience about your product vision and encourage them to share their opinions. Let them know which variants of the product you could release. The biggest challenge of using the blog for your MVP is driving traffic to it.
Before you begin building an MVP, it would be wise to glance through forums. It’s a great way of identifying people’s pain points and preferences. You don’t even need to join discussions to get a lot of valuable information. If you take part in the conversation, avoid sounding too salesy. People should realize that you’re genuinely interested in helping them and are not just looking for a way of making a quick buck.
Split testing is also known as A/B testing. Users compare two versions of the same item. You might want to resort to this technique after introducing changes to your marketing strategy or product. To measure your customers’ reaction to your new prices, CTAs, designs, or other elements, you should use analytical tools. Entrepreneurs who have never done A/B testing might think it’s a complicated method. Yet in fact, only 7% of companies that have tried it find it difficult.
A perfect explainer video is short and simple. It needs to showcase the features and benefits of your product. After watching it, people should understand why they might want to purchase your product.
The most common variety of paper prototypes is sketches of a user interface. Consumers can have a look at the sketch to tell you which functionality they expect to see in the product. They can share their opinions about the interface and UX. You don’t even need to build a real-life product to get this valuable information.
Feel free to launch ad campaigns to run market validation surveys. Google and Facebook allow you to flexibly set the demographics of the audience who will see your ads. You’ll find out which features of your product people with specific characteristics appreciate the most. Ad campaigns are also great for running A/B tests.
The term “fake” is used because you encourage consumers to sign up for a product that is not available yet. The more people sign up, the higher the demand for your product. Consumers might not be eager to share their contact details with you, especially if they can’t order your goods or services right away. Instead of asking them to type in their email address, you can redirect them to a landing page with a CTA button. Once the user clicks this button, they will see an announcement that says “Coming soon”.
A high-fidelity MVP will allow you to
- discover how much people are ready to pay for your product,
- find early adopters who will be using your product themselves and promoting it among other people,
- optimize your marketing strategy, such as your value proposition, call to action, and communication channels,
- identify the most powerful growth strategies.
Below, we’ll share six illustrative examples of this type of MVP.
This kind of high-fidelity MVP includes prototypes, mock-ups, and wireframes. All three options are focused on the product’s functionality but not design or UX. When building them, you can save a lot of time and funds. Such an approach facilitates the detection of functionality and usability issues.
This variety of MVP costs more to develop and has a more professional feel. You might need a 3D model if you’re working on a product that needs to be manufactured.
Wizard of Oz
In a ready-to-use digital product, processes are automated. The customer clicks buttons on the product’s interface to let the app know what they want, and the algorithms deliver the result.
With the Wizard of Oz, you only build the interface without automating processes. As soon as a client submits a query, your team members will process it manually. The customer won’t know about that. They will have an illusion of using a fully functional product. When building this variety of MVP, you’ll need to invest a lot in its front page — but you’ll save funds on its technical features.
This one is similar to the Wizard of Oz. However, clients know that they’re assisted by human professionals instead of algorithms. You might not even need to build a product.
Let’s imagine that you want to create an app where users can find advice on dieting and losing weight. To analyze the market, you can start sharing your expertise with customers on a third-party platform. However, it can’t go on forever in this format. Without automation, you’ll hardly be able to scale your business. If you understand that people value your advice and come back for more, it would be reasonable to start building the app.
The concierge MVP is optimal for companies at the initial stage of development that are not fully sure of their products. The Wizard of Oz, by contrast, is perfect for organizations that clearly understand their solutions and are testing the market.
This variety resembles both Concierge and Wizard of Oz. You deliver a fully functional product to your clients with the help of existing tools and services. Some of the technologies might fail to integrate with each other, so you might need to attract human professionals to manage the process. The piecemeal approach allows you to create your own infrastructure while saving money and time.
This method lets you achieve four goals:
- Raise funds
- Test the demand for your product
- Get customer feedback
- Find early adopters who will spread the word about your product.
Crowdfunding works equally well for all types of products, be it a video game or a foodtech innovation. To succeed at it, the best decision would be to create an explainer video about your product.
Crowdfunding often includes an opportunity to pre-order the product. But you can resort to it even if funding from your potential customers is not your primary source of financial support. Pre-ordered products are perfect for startups that require large investments. Consumers get a chance to support a business idea that they like and be the first to get the coveted product. You’ll be able to assess the level of people’s interest and set the optimal price.
The simplest MVP can only have one feature. When consumers test it, they focus on that single feature and don’t get distracted by anything else. This is the most cost-efficient approach. It allows you to get a very clear understanding of your product’s strong and weak points.
A step-by-step guide on building an MVP
Before you start working on an MVP, ask yourself:
- How much time can you afford to spend building the MVP?
- What will your largest risks be, and how can you avoid them?
- What’s your budget?
The cheaper your first tests are and the less time they take, the better. At this stage, your primary goal is to learn, not make consumers happy.
Step 1: Investigate the market
Try to find answers to these questions.
- What’s the market size for your product?
- Which percentage of this market can belong to you if you succeed?
- Who are your competitors?
- What are the primary competitive edges of other businesses in your niche?
- How much money do your competitors make?
- What are the characteristics of your target customer?
- What is the purchasing capability of your target audience?
To get this information, you can rely on the results of surveys. Plus, you can talk to people from your industry, investors, and potential users. You’ll hardly find an empty market niche. Instead, strive to occupy a niche with few competitors or one where you can easily outperform your rivals.
Step 2: Decide on the features
Take the set of the features that your final product must have and divide them into three buckets:
Include only those features in your MVP that improve the user experience and provide your clients with the highest value. Define your unique selling proposition by identifying the features that make your product stand out from your competitors.
Step 3: Investigate your customer journey
Have a look at your product from a client’s perspective.
- Which queries lead them to your website?
- Which path will they go through when dealing with your product?
- Why do they choose your product?
- Which features of the product do they appreciate the most?
- Which problems do they face when using your product?
- At which point do they abandon your product?
Based on this data, you can provide consumers with demos, reviews, instructions, lead magnets, tips, and clues that will improve their user experience.
Step 4: Select a project management framework
The framework will ensure all of your team members are on the same page. You might want to choose from Scrum, Agile, Kanban, Lean or whatever suits the specifics of your product. For each goal within the framework, there should be a responsible professional.
Step 5: Draft a success plan and set indicators
Your product will become successful once it reaches the indicators that you have set for it. If the product fails to reach certain KPIs, you can either improve it or revise your goals. To get a notion of the indicators that you could set, talk to your development team, investors, and users.
The process of testing is always on. Don’t stop it even after the product hits the market.
Step 6: Launch, get feedback, and iterate
Once you’ve released your MVP, you should keep gathering consumers’ feedback and analyzing it. Add new tasks to your backlog. Iterate until the product begins to fully meet your clients’ needs.
MVP vs PoC vs Beta vs MMP
Apart from the minimum viable product, you might come across such terms as “proof of concept”, “beta version of the product”, and “minimum marketable product”. They are not synonyms. Let’s analyze the difference between them.
MVP vs PoC
Entrepreneurs need to get a proof of concept before they register a business. PoC confirms that their solution can help people solve an existing problem. But it’s not enough to build the product to make it viable. Startup founders need to help their products enter the market. They should analyze the size of the market, the purchasing capability of target consumers, the competition, the legal requirements, and so on. Only then, they can switch from PoC to an MVP.
MVP vs Beta
The beta version of the product is what testers end up trying. They are tech-savvy experts who can point out to developers which features of the product could be improved. There might be bugs, reliability problems, or issues with user experience.
An MVP is supposed to be used by the general public. They might fail to notice the technical shortcomings of the product but they can inform the developer whether the MVP is helpful and user-friendly enough. People who get a chance to test the MVP need to answer the three main questions:
- Will you buy this product?
- Why would you buy it?
- How much are you ready to pay for it?
MVP vs MMP
The MMP stands for “minimal marketable product”. Several weeks or even months can pass before an MVP turns into an MMP.
Once the developers receive feedback from the consumers, they improve the product so that it better fulfills the needs of its target audience and is ready to hit the market. When working on the MMP, developers have two options: either release the product early and let it be imperfect or invest more time in its development and make it impeccable.
It would be wiser to stick to the first variant. The longer it takes the MMP to reach the consumer, the more likely the market situation is to change. For example, competitors might release identical products or the consumer’s demand might shift.
Benefits of MVP
To sum up this article, let’s list the goals that the MVP enables you to achieve.
- Analyze the demand. As you come up with the initial idea of your product, it might seem to be a great concept that will generate a huge demand in the market. But you need to back up your subjective opinion with facts and figures. When you test your product, you might find out that it fails to fully satisfy the consumer demand. Or, it might lack a significant competitive advantage over other products from its niche. Thanks to an MVP, you’ll be able to carry out testing with minimum expenses.
- Raise funding. To attract investors to your startup, you need to show them an MVP. Your potential stakeholders should be able to assess the functionality and potential of your product to decide whether they would like to support you or not.
- Test and improve product usability. When you build an app, hundreds of users might download it — but it doesn’t mean they will be using it regularly. The MVP gives you a chance to analyze your clients’ behavior and user experience in advance. You’ll understand why people abandon your product. You’ll be able to improve your offer quickly and with reasonable expenses.
- Prioritize the features of your product. To release an MVP, you need to focus on the most basic functionality of the product. Having seen a sufficient demand for it, start adding extra features. This way, your work will be organized in a more logical way.
- Ensure quick release. The competition in the market is fierce. The quicker you release the product, the higher your chances of outperforming other businesses from your niche. Some entrepreneurs might hesitate to start selling a product that doesn’t 100% meet their expectations. They spend many years and huge budgets on improving their offers — and when they release them, they find out that the products are not viable anymore. The MVP will prevent you from making this mistake. You can start selling early, thus avoiding excessive expenses.
- Get your first clients. Consumers love it when brands let them try new products first and ask for their opinion. Testing an MVP is your opportunity to start building a client base in a highly competitive market. Let people participate in your business growth and show them how you appreciate it.
As for the drawbacks, the MVP seems to only have one. All your team members need to share an identical vision of which basic functions your minimum viable product should have. If you fail to come to an agreement, your MVP won’t be up to its task.
The minimum viable product has only the basic functionality, so you can build it with little effort. The MVP enables you to assess the market potential of your product and gather consumers’ feedback about it. Such an approach allows you to work very quickly and improve the product so that it better meets the needs of its target audience. Businesses that rely on MVPs minimize their expenses, establish a better rapport with their clients, and have good chances of outperforming their competitors.