For startups looking to raise money from outside investors, great ideas simply aren’t enough. They’re a good place to start, but smart investors aren’t likely to fund an idea, they want to see something tangible. Enter the “minimum viable product,” or “MVP.”
The MVP is a vital element of the startup journey and can demonstrate future potential to investors. A lot can ride on the MVP, so it’s important to get it right as soon as possible.
What is a Minimum Viable Product?
“Minimum viable product” is a piece of jargon that has become ingrained in the startup lexicon. Initially coined by Frank Robinson, CEO of SyncDev, it was popularized by author and entrepreneur, Eric Ries, in his methodology, “The Lean Startup.” Falling between prototype and final product, the MVP is a basic version of your product used to perform initial market testing. The primary purpose of it is not determining if your product can be made, but if it fulfills a need.
Why is it Important?
Think of it as a jumping-off point from which a startup can begin honing their product in the most efficient way. It can offer a variety of benefits, including:
- Saving time and money by testing the viability of the product – don’t invest more than necessary in a product that won’t succeed
- Testing the market potential to see if the current product is appealing to the target demographic
- Gathering actionable feedback on what features work, what don’t, and how they can improve
- Attracting the attention of future potential investors
Whether the feedback received regarding your MVP is great or just “all right”, it’s highly valuable information. What you do with it can seriously impact your direction and next steps as a young company.
Building Out an MVP
So, with that in mind, how do you build one out? To begin, you should concentrate your efforts on defining your core value proposition. This will help you better define your goals and keep you on track.
Once you have this groundwork laid out, it’s time to determine what features to include in your MVP. A common struggle is finding that sweet spot between too much and not enough. A good way to think of it is “wants versus needs”, needs obviously being paramount. Wants should only be included if they differentiate your business within the market immediately.
Is it Really Viable?
An MVP won’t be as polished as your final product. You do, however, want to make sure what you’re releasing is representative of your core value proposition. Here are a few things to ask yourself prior to release:
- Does this solve the problem we exist to solve?
- Do we have means in place to gather actionable feedback from users?
- Is it bug-free?
- Is our unique value clear?
- If you can’t say yes to all of these questions, you may have work yet to do if you want to get the most out of your MVP.
Testing Your MVP
There are many different ways you can test and validate your product, including but not limited to:
- Customer interviews
- A/B testing
- Landing pages
- Ad campaigns
- Pre-order pages
A great example of this is Airbnb’s MVP. In 2007, Airbnb founders Brian Chesky and Joe Gebbia had just moved to San Francisco. Hoping to make some extra rent money, they wondered if anyone would be willing to pay to sleep on an air mattress in their apartment. To test their theory, they posted their offer on Craigslist. Lo and behold, they tested the MVP of what would become a unicorn currently valued at $31 billion.
What this story illustrates is that testing doesn’t have to be complicated, it just has to test your core purpose. Ultimately, you want to do this in a way that gives you the most amount of useful information using the least amount of time, money, and effort.
The end goal is to use the information you have learned to improve your product so that it better serves the need of the user. The quicker you’re able to adjust and refine your product, the quicker you’ll be able to begin scaling your product and business.