MVP explained: The real value of a minimum viable product
Could an MVP save you thousands of pounds and months of development time? We explore the benefit of minimum viable products for software startups and founders.
What is an MVP?
In short, an MVP – also known as a minimum viable product – is the most basic version of your product. It has just enough features and functionality to meet the needs of your early customers. But, why would you go to the trouble of developing a basic version of your idea when you could build and launch the full version straight away? After all, it’s important to remember that while some MVPs may be able to be built in a couple of weeks, if you’re a FinTech, HealthTech or Aerospace startup, it may take longer. However, without building an MVP, you cannot test your ideas with end users and investors. Let’s take a minute to explore the benefits of MVPs for startups and entrepreneurs.
What is the purpose of an (MVP) Minimum Viable Product?
In software development, the goal of an MVP is to allow you a chance to collect essential information about your idea before spending lots of money and time. Launching an MVP allows you to:
Gather early feedback from potential customers.
With an MVP, you can get your idea under the noses of your customer very early on and receive initial feedback from your target audience. The insights you gain from testing your MVP with potential users are invaluable and allow you to make any necessary changes or adjustments to your product based on real-life customer feedback. For example, you may find that you can remove unnecessary functionality from your app or software or that you should expand on a popular feature or area. Meanwhile, speaking to customers during this early stage could uncover other ideas and push you in an entirely different – but more successful – direction from what you initially thought. All of this could prevent you from making serious and costly errors as you progress with developing your full product.
Test your product’s viability.
Likewise, an MVP gives you a chance to see if people will hand over their hard-earned cash for your product. Did you know, out of the 9/10 startups that fail, 42% of them say that the lack of market needs for the product was the biggest factor? While you might think your idea is genius, an MVP can confirm if it’ll solve a real-world problem and give you a return on investment. Without testing your product’s viability, you risk wasting money and time developing something that no one will use or buy.
Build a relationship with your target audience and potential investors.
Perhaps an overlooked benefit of creating an MVP is the fact that by talking to customers and investors early on in your business journey, you can begin to build strong customer relationships – and potentially nurture a community – with early adopters. This is brilliant for when you come to launch and market your product – you have a group of people invested and ready to buy your product.
Three Key Characteristics of a Minimum Viable Product (MVP)
At DataMix, we use three main principles of successful MVP development:
Sergii Sereda, our Marketing and Strategy Director explains each of these principles:
First, you need to understand the basic functionality required to provide a full user journey for your customers. Your user journey should outline everything from when the user initially signs up or logs in right up until achieving their goal/receiving their result. For example, the result/goal could be finding a customer with the help of a matchmaking SaaS platform or receiving a nutrition plan based on your blood analysis. Some steps in your user journey may be done manually and not programmed. But, ultimately, the end user should receive a full experience and – in the end – associate the service with your concrete product. You may want to use a design sprint to help you understand your idea and figure out the end product by mapping out a clear roadmap. We talk in-depth about our design sprint process in this article.
Scalability is something investors love. If you build a scalable MVP, you can demonstrate that you can continue with further development right after the idea is tested and your round is closed. Developing your MVP with scalability in mind makes it easier to support your app and build new functionality that may have been discovered during testing and the design sprint. It also helps you save time on rewriting and code optimisation, which is beneficial for your pocket and much friendlier for the environment. Read about how we are taking actions to code more sustainably here.
A quality implemented MVP from a technical point of view:
- The implementation is as simple and cost-efficient as possible. But at the same time, it should be flexible and extensible.
- Have the most suitable tech stack. Not only in terms of your MVP, but also the future product.
- Take the decision on the selection and integration of third-party services (e.g. Stripe for payments) beforehand.
- Keep in mind that this is not a “rough draft” that has been made in a hurry and will be thrown out and written from scratch after completion.
At DataMix, our main goal is to provide an investable MVP for you. From a technology perspective, this means it’s built properly and there is no need to waste investors’ money on rewriting. From a functional perspective, this means you’re able to show users see the value in the product. Founders have a lot of things to prove to investors. And we try and take care of this side of things to make sure that the technology is one of the selling points of their product.
How to build a minimum viable product?
Building an MVP usually starts by collecting the general requirements. This is carried out in a series of Q+A workshops, where we talk with founders about their ideas. This brainstorming stage allows us to get a general understanding of the product and formalise all your ideas on paper. It also allows developers and founders to get on the same page and set expectations regarding the functionality of the product. While it might be tempting to charge ahead and start creating a product, this brainstorming stage saves a huge chunk of time and money during the development journey.
Our product managers and designers help visualise your product. We turn it into a clickable prototype, so you can actually see how your product will look.
When you’re happy with the prototype, our Delivery team prepares the development plan and the journey starts. Our main goal is to have everything prepared beforehand to help make your budgets and timelines predictable.
Of course, the nature of a startup means that there may be some changes along the way, but we ensure you have a general direction and clear understanding of your product once built. We try to make it as easy as possible because we know you’ll be spending time talking to investors and getting potential users onboard for launch.
We've actually created PRODUCT CALCULATOR to help you understand how your full-featured product may be built and how to optimize your cost depending on your current challenges from investors or market.
What we can learn from Airbnb’s MVP.
A classic example of an MVP in action is Airbnb. They designed their MVP to get the idea into the hands of users as quickly as possible and test their assumptions. Their assumption was: people would pay to stay with strangers. With their MVP, they demonstrated a market for paid room rentals to attract enough users to the platform. Airbnb’s first website was very basic – it didn’t even have functionality to collect payments. You had to exchange money with the host in person.
As Michael Seibel from Y Combinator points out: “Everyone tells these kind of magical stories about how everything was perfect from the beginning. Airbnb was not perfect from the beginning.”
What is meaning of MVP?
MVP stands for minimum viable product and is usually a product that has just enough features and functionality to meet the needs of your early customers.
What is the MVP used for?
MVPs are used to help startups gather feedback from early customers, test out a product’s viability and gather interest from potential investors.
What is the role of MVP?
The role of an MVP is to test out a product’s viability and trial an idea before spending lots of money on development.
What is an MVP in software?
Software companies use MVPs to test ideas and get reactions and feedback from potential customers before launching a full-scale development project.