MVP: The Benefits of Minimum Viable Products
Thursday, 22 April 2021What defines MVPs?
In one sentence: An MVP is the most simplified version of a product that can fulfill its core function and be valuable to a target demographic.
The big difference between building an MVP and building conventional software products is that you build software based on assumptions. But when developing an MVP you build based on actual user feedback.
Building based on feedback means that you release your product as minimal as possible and just watch how users react to it. The data from your different KPIs then lets you draw conclusions.
These conclusions are what you use to improve the product and its features for the next cycle. This whole process is called the Build-Measure-Learn Method and describes how basically any MVP works.
In the first launch, you should really only include the core features of your product. That’s the only way of knowing if your product is viable enough for users. Any other features you add on later throughout multiple development cycles.
Repeating these cycles over and over is what will get you a fully mature product.
Although MVPs are developed much faster and with fewer functionalities they have to meet user standards in terms of viability and functionality just as much as a final product.
If you want a more detailed description check out one of our previous blog posts!
MVP Benefits
We know you’re busy preparing your next launch, so here is the shortlist of all the advantages an MVP can offer you:
- It’s faster
- It’s cheaper
- Product development is less risky
- It lets you validate assumptions
- You get valid user data
- It gives you a focus point
- It’s a flexible process
- You can develop a user base
- It convinces your investors
A quick launch
That’s an obvious one. Developing a simpler product with fewer features takes less time than developing a mature software product. Your software engineer will thank you for that!
A faster launch thus means earlier user feedback and that you can test your assumptions at an earlier stage.
So basically it’s all about speed. Your goal is to get into the market before your competitors do.
So let’s get started with what they all care about: Money
It’s all about the money right? Understandable! After all, a lack of funding is a problem for many startups.
Since MVPs entail a much shorter development time and thus lower development costs, MVPs are significantly less expensive compared to a full-fledged, final software product.
This is a big reason why MVPs are so popular in the startup scene. An established company probably has the resources to develop a mature product, even if it turns out to be less successful than hoped and features have to be changed afterward.
Startups, on the other hand, generally cannot afford to be so free with their resources. Rather, they prefer to have better control over the scaling of the product.
If that hasn’t convinced you yet, think about how much easier, and therefore cheaper, it is to make changes. Imagine developing a final product all at once. Of course, it would be much more costly to go back and change certain features after many months.
But making changes in an MVP hardly causes any additional effort. It’s in the nature of MVPs anyway that you need to make changes and implement new features.
Both MVP and mybookie casino no deposit bonus allow you to discover an idea in a short time and at a fairly affordable cost. The ratio of costs and time in MVP is similar to the costs and opportunities offered by casinos through bonus promotions: the speed of obtaining a result is one of the key advantages. The casino provides bonuses for the constant play or loyalty of the player, rewarding them for every attitude or activity in the game.
Minimize risks
Lower development costs are not the only aspect that saves you valuable capital.
MVPs show you the hard facts and reveal whether your product actually has a chance of survival. From the very first launch, feedback from your product’s users will tell you if there is sufficient interest in your product.
This saves you and your company from investing in a product that would prove unprofitable anyway.
No market need, after all, is still the main reason startups fail. So why would you spend months building your product only to find out that you’ve invested your time and money in something for which there is no need, when there is a way to find out exactly what users love.
Test usability
Sometimes it’s just one or two features of your product that disrupt the overall user experience and cause you to lose customers. This doesn’t mean that your whole product is unprofitable, you just need to find the pain point as soon as possible.
If you have numerous product features, it will be difficult to find the source of the problems. But as features are added one by one and tested extensively, you can find out which features are holding you back from success and thus easily intervene.
Verify assumptions
No matter what business you’ve started or what product you’re trying to bring to market, you have to make a number of assumptions during the development process. All of these assumptions are essentially about what will work and what won’t work.
These can be about the market, your goals, marketing, design, or funding. However, no matter how much research you have done in advance or how confident you are in the accuracy of your assumptions, there is no guarantee that they will be correct.
An MVP can relieve you of this uncertainty, as the Build-Measure-Learn method quickly and reliably validates all of your assumptions.
This method is a fundamental part of any MVP development process. The process starts with building a product, launching it, getting data through user feedback, and drawing conclusions from that data for the next loop of the continuous cycle.
So by testing your product with real customers as soon as possible, the MVP gives you certainty. It gives you data about what the market wants and what customers actually want without having to invest large sums of money.
Be sure to take advantage of this to better allocate your resources and discard features that customers don’t love.
Provide valid data
Of course, building an MVP is not the only way to get feedback and data about the market. The key difference is that the MVP user feedback is valid.
And why? Because users don’t know they’re being tested. They are real customers who have an actual interest in the product.
Surveys and statistics will only get you so far. People lie. Constantly. It doesn’t matter if it’s intentional or unintentional, for example, because of social acceptance or courtesy.
Let’s say you asked your target audience over a series of interviews if they were interested in the product. Although most of them responded positively, your product flopped after launch.
The mistake you made was that you asked customers about a product idea, but not about the product itself. Possibly the customers are convinced by the idea they had in their head, but not by your idea of the product.
Ultimately, launching the product (preferably quickly) and seeing how actual customers react is the only reliable source of data.
Gives you clarity and a focus point
Because the MVP starts with only the core functionality and must-have features it’s easy to remember what your product is about and which problem it has to solve. It makes you way less distracted by countless secondary tasks or features.
If you have to describe your product in one sentence and what it does, that sentence should stay the same, and not be extended endlessly.
Especially in the long-term run, it helps you stay on track and avoid adding redundant features. Often times entrepreneurs are prone to adding endless features. While not realizing that over time the product changed into something that it wasn’t supposed to be.
Stay flexible
If you want to survive as a startup in today’s highly competitive environment, you need to be able to respond to changes or updates in the shortest possible time.
In the age of digitalization, the market makes new demands seemingly every minute. If you don’t respond with the latest technologies, your competitors will.
Since the development of a finished product can take many months, people are usually too committed to this one product and reluctant to deviate from it. You have to expect that this rigidity will get in the way of your product optimization.
The development of a Minimum Viable Product, on the other hand, has the advantage that you are more positive towards changes since new insights have to be implemented again and again anyway.
The MVP approach also allows you to leverage the latest technology as it becomes available. This way, you ensure that your solution remains relevant and can keep up with any customer needs.
Attract early adopters
Early adopters are much more than guinea pigs on which you can test your assumptions. They are your chance to build a user base that not only likes your product but loves it. Because by developing an MVP, you have a great chance to focus on a few things. In doing so, it’s much more important to be exceptionally good at a few areas of expertise, rather than performing averagely in many aspects.
“It’s much easier to expand from something a small number of people love to something a lot of people love than it is to expand from something a lot of people love to something a lot of people love.” (Sam Altman)
Not only are your early adopters more likely to become loyal to your company, but they could also become ambassadors for your brand.
Win Investors
In the end, it’s not just about what customers like. To secure funding for the company, your startup will need investors. While you can obtain capital at many stages and from many different sources, an MVP can certainly help convince capital providers of your idea.
Especially venture capitalists and business angels, but also traditional banks may be even more convinced by a working product than a PowerPoint pitch.
It’s not uncommon for investors to invest in an idea without ever seeing a product, but something physical that you can see and use will be more comprehensible.
In addition, it may seem advantageous to stakeholders that the product launches to market so quickly. Since most investors are interested in a quick exit, speed is a critical factor for them.
The bottom line
Building an MVP is a great way for any startup to make building a startup less risky. While it can be a scary process and failure is likely methodologies like the MVP can increase the chances of success.
Remember: Even the best MVP can’t guarantee you success, but in the case of failure, it makes sure your losses are bearable.