Entrepreneurs and founders tend to be enthusiastic about their ideas and often lack the hindsight to distinguish between the tree and the forest. In their quest to build the next great thing, they forget to ask themselves simple questions: Am I solving any issues? Do people need my solution? Is what I’m offering needed?
In fact, 90% of startups fail, and you’d be surprised with how many don’t even get to make their first sale. Even if your business plan looks flawless on paper, there’s no point in launching a product without a potential customer. To ensure your product is moving towards success, we’ve got your solution: do you know what an MVP is?
Here’s a brief intro on how to save your startup tons of thousands of dollars on untested products. If you’re building or growing your startup, you might wanna stick along.
So… what is an MVP or a Minimum Viable Product?
First of all, it’s a process, not a product. But we’ll get to that later.
Building innovative products from scratch takes time, resources, and money, which aren’t likely to come easy when starting a new project. This is where the concept of an MVP becomes attractive.
MVP stands for Minimum Viable Product and refers to a simplified initial version of the desired outcome. It implies launching a product with the minimum set of functions to obtain early feedback from initial customers, whether from receiving their opinion or observing their behavior. Perhaps it helps to imagine it as a complete first draft.
“That version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” — Eric Ries, The Lean Startup author
At LoopStudio, we believe your first MVP should be the simplest concept one can imagine from your very complex idea of a finished product.
To kickstart MVP projects, we recommend starting with a Design Sprint. This is when we test and validate the idea and determine which features and functionalities are critical to solving the business problem.
Why are MVPs useful?
An MVP will allow entrepreneurs to discover if there’s real value in what they intend to deliver. You are preventing your startup from developing a product that customers do not want, or that doesn’t really solve the problem it set out to solve.
Before Agile methodologies came into place, building a finished product meant risking a huge percentage of the funding available on an untested product. Now we can set up a fast and simple first launch to attract early customers.
It’s the simplest way of both solving the target problem and generating meaningful data and feedback to leverage the startup’s learning curve.
It’s essential to understand that your MVP should not be a fully developed product. It’s natural to try and want to address all the users’ problems and every potential user from the very beginning, but that’s not its purpose.
Instead, your MVP should solve the central issue in the simplest way and grow from there, through periodic iterations. Ideally, you should seek initial feedback from early adopters and learn either from their opinions or from observing their behavior.
“An MVP is something ridiculously simple” — Michael Seibel, Y Combinator CEO & Partner.
Time is a key factor in these early stages. Keep everything simple and basic, and ensure hitting the market in a timely fashion. Don’t lose sight of what’s essential: focus only on those critical features determined before. You’ll have time for the nice-to-have features later.
This first version of your product will help you understand better what the customers need and want; and will do so while requiring the least amount of time, money, and resources possible.
Benefits of building an MVP
Let’s see some of the benefits of having an MVP.
1. Focus on reaching Product-Market fit
Simply put, product-market fit is the degree to which your product solves an existing need. If you address a significant issue correctly, you’ll get a more successful product-market fit. Reaching this stage takes numerous iterations of the initial MVP, and incorporating data obtained from the market and customers.
Therefore, your MVP should gather the most amount of learning possible from customers with the least effort. This way, you’d be able to measure how well your product performs and adjust it accordingly to gain more traction.
“Life is too short to build something nobody wants” — Ash Maurya, best-selling author and creator of Lean Canvas.
“No market need” is listed as the 2nd main reason startups fail. More often than not, founders tend to fall in love with their idea before testing or validation.
Here’s some free advice: focus on your customer first and then on your product. What customers need may differ from what you first imagined. So, don’t look for a new set of potential users, adapt your solution to your target users’ needs.
2. Attract new investors with your MVP
How would you rather your product be judged: as a prototype, or as a fully functional MVP that has already retrieved data from its users?
Those who have pitched their ideas to investors will guarantee that it’s no walk in the park, but your MVP can enhance your opportunities to receive new funding, for two main reasons:
- It’s available for demonstration. Any doubts about functionality, your product core features, or your unique value proposition investors may have, can be answered with a functional MVP.
- It establishes determination. Presenting your MVP is also a statement of will. You are proving you have concrete ideas, solid foundations, and you’re focused on seeing your project through.
3. How much will my MVP cost?
This is a common FAQ. Unfortunately, there isn’t a unique answer to it. It will vary according to the project’s scope and complexity. However, here are some criteria and ballpark estimates to help you know what to expect:
- Time: An MVP shouldn’t take more than 3 to 4 months to build. The earliest you hit the market, the fastest you’ll learn from your users.
- Budget: Should you decide to work with partners in LATAM or Europe, an MVP may cost between USD 40k to USD 100k.
Moreover, there are undetermined elements that may affect your budget as you move forward. For example:
- The type of product/service being built: different apps have different tech stacks, complexity, and degrees of implementation. The more ambitious your product is, the more resources you’ll need.
- The number of features required: the more features you ask for, the more time it will take, and the more it will cost.
- Scalability: a well-built MVP has the potential to scale into a masterful product. However, it’s not easy to determine the architecture, plan it, and implement it, bearing the scalability in mind.
- How polished you want your MVP: if you intend to have the cleanest and most aesthetic UI/UX to engage your early adopters, the more it will cost.
Some important reminders…
Keep in mind that your MVP should be as basic as possible. Stick to solving only the main problem.
Here’s a couple of must-haves for your MVP:
- The core features of your product that solve the issue at hand;
- A UI that allows the user to explore your MVP freely;
- A solid back-end architecture that can be schemed later on to scale the product.
These three elements will allow you to snatch your users’ attention and get feedback to run your validating process.
How to move forward after launching your MVP?
First of all, don’t fall in love with it. Move on instead.
Even if it works, users respond great to it, and it attracts new investment, competitors may close the gap with your product and outcompete you. It becomes essential to repeatedly improve the product and continuously expose it to feedback in this stage.
That’s what we meant by calling it a process. Don’t get obsessed with your MVP, or it will become obsolete.
An MVP must be simple, but this doesn’t mean it’s simple to build an MVP.
As a founder, focus on engaging your customers. Your product should morph into what your users are looking for, and the result might not align with what you first imagined.
Last but definitely not least: don’t be afraid to look for help. Save your startup months of recruitment and thousands of dollars in dirty code. Focus on managing your startup and look for experts (like us!) to guide you in this process.