MVP is a version of a product with just enough features to be usable by early customers.
A minimum viable product is typically a product or service that has just enough features to satisfy customers or test a hypothesis for business education or customer insight. These products are often never feature-complete but are designed to provide customers with an idea of what the product will look like or how it will function. The goal of releasing a minimum viable product to select customers is to gain feedback that can help with future development of the product. When a minimum viable product is released to early adopters, the company that puts out the product will typically use the feedback to make numerous iterations that solve the larger problems about the product in question.
A minimum viable product is not only used by startups but also established businesses that are looking to experiment or test a product or feature before fully investing in a complete product. There are many examples of popular companies that began by first placing a minimum viable product on the market. For instance, Amazon started in the mid 1990's as an online catalog of books. At the beginning, an order on this website would result in Amazon purchasing the book from the main distributor and then shipping it to the customer. In the years since, the website went through dozens of features which began as minimum viable products to test customer feedback and market fit -- eventually turning it into complete products contributing to the growth of the largest online retailer in the United States.
While a minimum viable product can be used by any startup or established company, it's typically seen as a guiding principle for fledgling startups in incubators. By utilizing the practices of a minimum viable product, these startups are able to acquire valuable early-stage customer insight which is invaluable information to any company looking to better understand their product and market.
Among the primary aspects of creating a minimum viable product is to accelerate learning while requiring minimal resources to do so. To understand how this can be a benefit to your startup, you should consider the opposite of this approach. Let's say you've created a feature-complete product that you decide to put on the market with only the basic customer analysis you've performed. Comprehensive customer analysis is among the most important components of building a strong and successful business. If you know what your target audience wants, you'll be able to more effectively meet their needs, which helps to foster customer trust and brand loyalty.
However, if you've just started your business, it can be difficult to perform a thorough and accurate customer analysis -- especially with the limited resources of a startup. You'll need to rely on information you can gather from other businesses in your industry (secondary information), which can be subject to inaccurate sources and misinterpretation of data gathered. Using an MVP is a great way to mitigate these problems through primary research.
An MVP will help your business learn more about your customers, the product, and the industry as a whole by directly testing your hypothesis with your customer base. You'll also be able to learn this information faster without wasting the amount of resources that you would otherwise need to when placing a feature-complete product on the market. This is a lean methodology that comes with very little risk yet can pay dividends. Since you won't need to spend as many resources in developing a minimum viable product versus a feature-complete product, this MVP approach is perfect if your company is a smaller startup or a business that's looking to experiment with less risk.
Among the most beneficial facets of creating a minimum viable product is that it will allow you to test and validate a hypothesis. It's important to understand that these products can be anything from a landing page on a website to the base of a product that you hope to one day bring to the market as a feature-complete item or service. When you're attempting to grow your business, you'll likely be required to conduct a substantial amount of research into what works and what doesn't.
This research gathered through an MVP approach takes a hypothesis that the business has and attempts to validate it through direct customer insight and feedback. For instance, you might want to branch out to another sector of your industry but might not if customers will appreciate this move and will continue to buy your product. A minimum viable product allows you to test this hypothesis and business concept by essentially dipping your toes into the water. By utilizing an MVP, you'll learn more about how the customer will use the product as well as their overall buying habits.
You can then compare this customer feedback and information to your business assumptions. If the feedback of the MVP didn't validate your business hypothesis, you can retool the idea and iterate on it or drop it entirely. All of this can be done with a limited amount of resources without investing too heavily into a product or idea which you may have discovered that your customers are not interested in. Other business hypotheses that can be tested with an MVP include what people like and don't like about the product as well as what the industry response is to your MVP. If the industry responds poorly, you haven't made a full commitment to the idea, which allows you to change direction or pivot if need be.
While it's certainly possible to test and validate a hypothesis with a fully-realized product, a poor response by the industry or the market as a whole can have far worse consequences if you've spent a substantial sum of money and time developing the product before obtaining these conclusions.
When you've created a minimum viable product, you'll find that testing this MVP with early adopters will give you the ability to rapidly develop the product through an agile methodology. Creating an MVP can often require very little resources and time on your part. However, the benefits you gain are almost certainly going to be substantial. You'll find out exactly how customers and the surrounding industry react to the MVP, which will give you the information you require to iterate on this product. Iteration is the most important element of eventually converting an MVP into a feature-complete product.
When you release an MVP to early adopters, it's likely that this product will develop in iterations in response to the feedback that you're provided with. Going this route with a product means that every element of the product aside from its base is developed with customer feedback in mind, which means that the feature-complete product is almost certain to satisfy. The quick feedback that you're provided with allows for rapid development of the features that people actually want and not what you only think they want.
Whether you've just formed an idea for a minimum viable product or have already created such a product, it's highly recommended that you implement agile product development into your project management. This type of product development is designed with speed and simplicity in mind, which has proven to provide companies that employ this approach with the ability to quickly get their product to the market while also allowing them to save money and bolster employee productivity. The numerous agile methodologies that you can use focus on simplicity, communication, feedback, and courage, all of which align with the necessary components of a successful MVP. The iterations that you make on your MVP will likely be defined by what the customer prioritizes.
While minimum viable products allow you to place a product on the market without many of the risks and extensive costs that come with doing so, there are many common pitfalls that companies tend to make when using an MVP in their business plan. The fact that the benefits far outweigh the downsides of an MVP makes some companies blind to the issues that can occur with a minimum viable product.
The most common pitfall for companies to make with this type of business plan is to not fully understand what an MVP is and how it's intended to be used. Numerous companies will focus almost entirely on creating a product that has a minimal amount of functionality to it without also focusing on learning about the business viability of the product. You need to have a clear idea of how you want to develop the product before you ever release the MVP. With these ideas in hand, you can make tweaks based on customer feedback instead of wholesale changes.
Your minimum viable product must also communicate at least something of what the customer should expect when they eventually receive a feature-complete product. The "viable" aspect of this term means that the product needs to work properly and be of a sufficient quality. Another pitfall that you'll definitely want to avoid is not using the feedback that you receive from customers who test your MVP. Whether you receive this feedback and simply decide not to use it or don't have a good feedback system in place, an MVP is worthless without the feedback from customers who have used it.
You also need to make sure that you don't focus too heavily on the lean aspect of an MVP. While it's certainly true that a minimum viable product is meant to be created and iterated upon without using too many resources, it's essential that you don't starve your team of the resources that they require to develop the MVP into a feature-complete product. If you begin to notice delays in the project or a buildup of obstacles during development, it's possible that your team doesn't have the resources that they need to continue with development.
Even though minimum viable products can be used by any business, they can be particularly advantageous for startups since they require very little resources. If you don't have a substantial amount of funding in the early days of your startup, using an MVP may be a way for you to enter into the market. There are numerous benefits that your startup can obtain from using an MVP, which extend from being able to test a business hypothesis with minimal resources to reducing the amount of engineering hours that you would waste by developing a full product. The base that you create with the MVP could also be used as a base for future products.
It can't be stressed just how beneficial it is to receive quick feedback from early adopters that can be used to rapidly develop the product and build the brand.
Minimum viable products can also be useful for startups within the medtech and bioscience industries. Before you've fully created a medicine or piece of medical technology, an MVP will allow you to test the validity and interest in the product before you've sunk significant resources into it. For instance, if you're developing a drug to help with the treatment of Alzheimer's disease, you can create a full product profile of the anticipated drug and provide this profile to geriatricians, neurologists, patients, and survivors of the disease before you've fully developed the drug, which will allow you to make much more informed decisions while developing the product at hand. When you're looking to grow your startup, an MVP is the perfect way to do so.