What is MVP (Minimum Viable Product)?

Introduction

Please raise your hand, if you’ve ever heard about the minimum viable product (MVP) and have no clue what it is. When you talk to software development companies or startups itself, you will often hear about the MVP and Agile Methodologies.

Getting started with MVP + MVP meaning in business

It might be that you have a great idea for a product/platform/mobile app/e-commerce. This idea will make your company grow and moreover show to your bosses what a motivated employee you are. You want to make this idea fast into reality.

So you talk to an IT department in your company, you have a couple of meetings, exchange tons of e-mails. Then you receive an estimation from them stating that they need two months initiation phase, four months coding phase and three full-time resources until they can launch the product – your brilliant concept.

This is a lot of time, meaning a lot of money, meaning that your bosses are most likely going to reject the idea for a product even before having a chance to test the thing or see it materialized.

Well, there is a piece of good news, building a web application/mobile app/e-commerce doesn’t always have to be such a long and expensive process. With the right MVP, you can test your concept with real customers and with their immediate feedback continue to build a product that they will simply love. At this point, you may ask yourself what is MVP?

Well, do not fear, in this post I’ll walk you through what is an MVP, give you 5 examples of the most successful MVPs and show you free tools to build it and links to resources to learn more about it. When we’re done you’ll know exactly what MVP is, how to do it and what tools to use. Ready? Let’s dive in.

What is the Minimum Viable Product all about?

“The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” by Eric Ries

Long story short. The difference between a final product and a minimum viable product is shown in the picture below.

It means that you build a minimum set of features possible to be able to deploy your product. If the problem is: I have nothing to sit on, then probably the basic solution will be to build a chair and put on hold a project of building an advanced hi-tech armchair. MVP is all about solving the problem by the most basic solution. 

One of the most important graphs you need to know while building an MVP is a lean startup circle. Both, MVP and lean startup circle, are taken from the fundaments of lean startup methodology. This cycle says that it is best to build fast and measure/analyze each iteration of your product.

It’s better to change the product (pivot) many times and upgrade a product often (agile) instead of hiding it from everybody and building it for yourself – not the customers. You do this circle so many times as you get product/market fit, which means you will solve the real problem of users and you will know who are they.

The difference between Minimum, Viable, and Minimum Viable Product

See the graph below which shows how you can achieve a perfect balance between building only a minimum or already a perfectly viable product.

Few keywords:

• MINIMUM means that the product is so bad, that nobody wants to use it
• MINIMUM+VIABLE means it’s a mix between those two; minimum enough to solve the users’ problem
• VIABLE means that the product is fast, reliable, optimized, well designed and looks professional

Example:

Problem to solve: It’s hard to find a used bike in Munich.

Minimum: A bike on sale in front of your house with a piece of paper with an offer.

Viable: A web-platform – with user profiles, messaging, notifications, search and best fit system. The website is a fast website and based on the newest scalable technologies like javascript (node.js/meteor.js).

Minimum+Viable: Simple free list in google docs with manually collected offers from classified ads/Facebook groups pages with bikes description, photos and contact details to a seller.

What are the benefits of building MVP?

#1 High ROI with low risk

It’s all about maximizing the value that you will get back as soon as possible at minimal risk. This means that it’s better to find out what exactly customers desire before giving them the polished and finished product.

So, before building 10 features of your new amazing product, ask your customer first about their opinion (do a customer development), because they maybe need only 1 or 2 from those features to solve their problem and you don’t need to build the other 8. By not building the not needed feature you save time and money.

#2 Reduce money and time spent on product development

Verify your idea first then build the product. Don’t build a team, set up a sales/marketing process before you are not sure what problem you are solving and what your customers need are.

#3 Get to know the customers as soon as possible

Show your product to your customers as soon as you have some first version of it, get to know them better, recognize their needs. Then you can build a product/service they really want. This can help you to get the feedback from them as soon as possible – Your idea/product wouldn’t be a hyper viral from day one, don’t even count on it.

Advantages of knowing your customers:

• Getting feedback about your features/product way faster
• Easy to define a marketing campaign or sales process
• Easier to scale, when you know who to look for

#4 Finding the early adopters

“You’re selling the vision and delivering the minimum feature set to visionaries, not everyone.” by Steve Blank

Before getting your product to the mainstream and becoming the second Facebook you really need to know who are the early adopters within your product range (so-called trendsetters). Those are the first users of your product, who are eager to solve their problem despite the basic functionality of the software you offer.

If you recognize the early adopters (who and where they really are) it will be easier for you to set up the marketing campaigns to attract more people, learn from them what features they really need and the most important validate your product assumptions.

What are some great tools for non-developers to build MVP? 

Collect a set of tools that can help you with defining your MVP at each stage. It’s based on a lean startup circle.

IDEAS:

• Business Model Canvas – A framework to describe your business idea. It can be called a business plan 2.0
• Lean Startup Validation Board (Javelin) – A framework to test your hypothesis. Helps you to find out who is your customer, problem and solution.
• Google Docs – Use free surveys to ask your customers for feedback. Use the docs to share your thoughts with early adopters or just simply describe your concept.

BUILD-PRODUCT:

• Landingi.com – Build a landing page, modify it and measure the results (no technical skills needed)
• Unbounce – Another similar tool as above
• Shoplo – Create an e-commerce shop in a couple of minutes (no technical skills required)

MEASURE-DATA-LEARN:

• Google Analytics – Get to know who is your customers, how often they visit your website and how many of them click your Call-To-Action buttons
• Mixpanel – Alternative to Google Analytics
• Freshmail – Create beautiful and personalized e-mails, collect easily e-mail addresses and send mass e-mails to your subscribers.

Share with us your MVP idea and get free feedback: [email protected]

What are some good MVP examples to copy? 

There are many ways to build/test your MVP. The most popular and efficient are:

• Landing Page
• Blog
• Wizard of Oz MVP
• Crowdfunding
• Fake it till you make it

#1 Landing page

The easiest way to test your idea. It’s the first page on which your customer is landing. If you type www.google.com then you see the perfect example of a landing page.

Here you can read a great story of a company called Buffer, which describes step-by-step how they use a landing page to validate their business idea.

DIY Landing page:

• Use one of the free websites like landingi.com to set up a page
• Describe really good what are the benefits of your product to customers (not features!)
• Add one Call-To-Action ex. Collect e-mail address, get the customer to pay for the product
• Get traffic on your website – post on forums, comments on the related blog, set up the Google Adwords
• Measure the results
• Calculate if there is enough interest by calculating conversion rate (users who left an e-mail or paid/unique visitors on the website)
• Interview the potential customers and adjust the product to their needs

When you know what the customer needs, send us an e-mail – we will build you an epic product! 

#2 Blog

Groupon is called one of the fastest-growing companies in history. After 7 years on the market, this local deals marketplace hires more than 10 000 people and serves 48 M customers.

The founders of Groupon started with writing a blog based on WordPress with the group offers. They’ve contacted the small local companies and ask if they will get a better offer if they get for them 30-50 customer for one product.

Then they post the offer on the blog as a blog post and promote within a local community. If somebody bought an offer they send a coupon in PDF. Everything was done manually.

No sales team, no automated e-mails, and notifications – All done with simple usage of Gmail?

#3 Wizard of OZ MVP

The largest online shoe store started by Nick Swinmurn in 1999 is one of those concepts tested by MVP. It was one of the very first shoe online stores.

Nick has used the MVP named in Lean Startup Methodology as Wizard of Oz. He launched an online shop offering different shoes, however with that difference that he doesn’t have any warehouse or any shoes bought.

So if the customer ordered a pair of shoes Nick went to a local shoe shop, buy a pair of shoes and send them by himself. The website was only making a good impression and collecting the customers.

You don’t have to start with the warehouse – Start with a good landing page and do the job by yourself, then automate it when there are enough orders.

#4 Fake it till you make it MVP

When I started a company called Fit Food First (RIP), where we wanted to help people to find healthy restaurants nearby and get a recommendation on the menu, then we verified our business and build the product in just two days.

Despite this, we wanted to make an iPhone app to pack this functionality there, which was impossible, because even none of us got enough technical skills to build it.

We’ve launched a simple landing page and send it to our friends to get them aware of our product and it looked like this.

Then we build our product, which was a simple paper sheet with google maps with local restaurants near the Center of Munich (Marienplatz) and we went there to sell those “products” for 1 Euro each.

We assumed the success rate for the product (conversion rate) at the level of 10%. So if we get this conversion rate this means that it makes sense to go further with our concept and maybe build an iPhone app.

You would be surprised, but from 13 people “pitched” in the city center we sold 5 maps! 

38.5% Conversion rate. 

For a product which was only a piece of paper….

Here you can download for free our pitch deck with conversion rates and landing page optimization

#5 Crowdfunding

The company called Pebble used KickStarter to fund their idea of making an amazing smartwatch. Before building a product they just shared their concept with a crowd on the Kickstarter (Pebble KickStarter Campaign).

Everybody, who was interested could use the page as a pre-order form, which means if the goal of the campaign will be reached (in case of Pebble it was 100k $!) than the watches will be delivered to customers after a given time. It was one of the most successful campaigns on the KickStarter till now (over 10M $ pledged).

They made a video, prepared pictures of the product wrote a press release and spread the word between friends/family/media.

The interesting fact is that they got no. 1 most funded campaign at the Kickstarter in 2015. They doubled the result of the first campaign and got 20M $.

Comment:
However, be aware that the crowdfunding campaign is not so easy as it seems to be… Behind many of the companies that get thousands of $, there are marketing agencies and many experienced people.

Final word

Now you are ready to create your very first MVP. Remember it doesn’t have to be perfect! Just use the described tools and copy one of the MVP examples for your very first product. Below you can find more resources like books or blog posts, where you find more details on MVP.

Have you already build an MVP? Are you already building a startup?

Bonus! MVP good-reads:

Recommended books to get:

• “The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses” by Eric Ries
• Lean Enterprise: How High-Performance Organizations Innovate at Scale (Lean (O’Reilly)) by Jez Humble
• The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company by Steve Blank
• The Lean Product Playbook: How to Innovate with Minimum Viable Products and Rapid Customer Feedback by Dan Olsen
• The Lean Entrepreneur: How Visionaries Create Products, Innovate with New Ventures, and Disrupt Markets  by Brant Cooper

Recommended blog posts to read:

• Guide to Minimum Viable Product made by Eric Ries, who started the lean startup movement
• No idea how to test your product? Get inspired by one of those 15 ways to test it
• Beef Jerky business, before building anything try to sell it by Noah Kagan

Resources:

• http://www.freepik.com/free-vector/team-work-scribbles_759871.htm (image)
• http://transformcustomers.com/minimum-viable-product-how-it-helps-time-to-market (image)
• http://www.syncdev.com/minimum-viable-product (image)