What is a Minimum Viable Product (MVP)?

by

What is a Minimum Viable Product (MVP)?

Minimum Viable Product, or MVP, is a concept introduced by Eric Ries as a part of his Lean Startup methodology. He defines it as that version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort. To put it simply, it is a product that has enough features to draw in early adopters and prove a concept early in the process of developing new products.

MVPs are helpful in the software industry because they allow product teams to get feedback right away from customers so they can make improvements and iterations. Therefore, you can save time and money on a product that will not work in the market if you can determine early on whether it will appeal to consumers. In this article, you can learn more about it in detail.

What Is It For?

Most software development companies nowadays follow the agile development method. An MVP is essential to agile development because the process is based on validating and iterating products based on user feedback. And there are many reasons why a product team in a software company chooses to develop and release a Minimum Viable Product. They include the following:

  • To quickly launch a product onto the market.
  • To test ideas with actual users before investing a significant amount of money in the product’s complete development.
  • To find out what works and what does not for the company’s target market.
  • To establish a community of users prior to the release of your product.

So, these are the purposes of releasing a Minimum Viable Product. However, it is not simply a testing ground or prototype that is discarded in the long run. A plethora of products and services have emerged from their MVP origins to become independent institutions. A few well-known companies that have successfully launched it include Airbnb, Dropbox, Uber, and others.

What Are The Benefits?

Now that you know why MVPs are important, here are six compelling reasons to go with this agile, iterative process rather than an all-or-nothing strategy.

  • Secure Stakeholder/Investor Support
  • Evaluate Business Ideas
  • Confirm Demand in the Market
  • Formulate A Revenue-Generating Plan
  • Testing UX And Usability
  • Cost-effectiveness

1. Secure Stakeholder/Investor Support

As you are aware, a lot of companies rely on the support of investors or other stakeholders in order to obtain funds and launch a software development project. To make it possible, it is necessary to build confidence in the product they are pitching and its ability to achieve the expected results. So, developing an MVP is an effective method to secure buy-in, as it allows you to test your idea before it goes to investors.

It will help you demonstrate the market validity of the product to investors easily. Stakeholders want to invest in successful products. With an Minimum Viable Product, stakeholders can see and use a physical product in addition to proving a product’s merits. If investors support the project, it will not take months for stakeholders to see a return on their investment, allowing the product to launch sooner rather than later.

2. Evaluate Business Ideas

Another benefit is that it allows you to evaluate your business concept. By developing a product with only a core set of features and releasing it to the targeted audience, you will be able to understand and verify whether the concept clicks with them. The inferences you get from the feedback can change a product’s direction.

  • The most frequent users and their app usage patterns are visible to you when the product is released.
  • The functionality of the app can be adjusted using this information to suit these users better.
  • It would be much more challenging to make any changes to a feature-rich product; you might even have to rebuild the application completely.
  • One company that has done this is Instagram, which used its Minimum Viable Product. The GPS feature was the original inspiration behind Instagram.
  • However, following the launch, the leaders changed the idea based on user feedback.

3. Confirm Demand in the Market

Realising a Minimum Viable Product is a great way to test, see what works and what does not work with the audience, and overall confirm its demand in the market. It may occasionally fall short of meeting the needs of the customers for two reasons: either the need is unmet, or there are already alternatives available.

  • Conducting user research is essential to the success of a product because it guarantees that the solution it offers meets the needs that your target audience has identified. You can accomplish that with an MVP. 
  • Without having to commit a significant amount of money, you can find out if potential customers need and will use your product. 
  • Based on your findings, you can either rework your product to create more market differentiation or develop an entirely new concept.

4. Formulate A Revenue-Generating Plan

It is essential that the products developed be able to generate a sustainable stream of income, which involves formulating a revenue-generating plan. Even though there are many monetization strategies proven to be successful, deciding which is best for your product can be challenging. With an MVP, you can test whether your assumptions about the strategy will work. 

You can use a Minimum Viable Product to gauge your users’ willingness to pay for updates and add-ons, for instance, if your app monetization strategy relies on in-app purchases. You will need to switch up your monetization strategy if the results indicate that users are not making as many purchases as you had planned.

5. Testing UX And Usability

Not every product can provide you with deep user engagement. Sometimes, apps can be uninstalled within a month of download or used once in a while, keeping them around without being uninstalled. User retention is a critical goal of user experience design. An MVP can evaluate the product’s engagement, longevity, and lifetime value, thereby allowing you to test the product’s potential.  

It also allows you to collect information and insights about user behaviour. It helps you gauge how quickly users grasp the goal and flow of the product. It allows you to find new ways to improve the user experience and increase functionality.

6. Cost-effectiveness

The price of mature products corresponds to the amount of time and effort they have taken to develop. Since they are iteratively developed, the cost is spread out over a longer period, often reinvesting revenue from earlier versions. The MVP approach also prevents the product from becoming too complex and requiring more complicated coding. The more users you have and the more information you gather from the Minimum Viable Product, the more intelligently you can invest.

So, you got to read about what a Minimum Viable Product is, its purpose and its benefits in detail. Its all about testing and figuring out whether the product you develop is good enough to be released as a full-fledged product with all the features for the users. The process allows you to start small and iteratively build up into a better, more polished product, all while leveraging user intelligence to make the best product decision.

Interesting Links:

Definition Of Minimum Viable Product

A Review Of The Minimum Viable Product Approach

Leave a Comment