Minimum Viable Product (MVP) is a key concept of the Lean Methodology. It is one of the basic steps to take to pinpoint your final product through the study of your customer, but not only. This article explains what a Minimum Viable Product is and why it is so essential for your business.
The principle is always the same: saving time and money, validating the riskiest assumptions and proceeding by ameliorating iterations. Minimum Viable Product must be part of a broader strategy that helps us move forward and reach our goals. You generally get to MVP after a phase called “customer development“, that is, once you understand if there is a problem that deserves to be solved for your early adopters. The Minimum Viable Product serves to validate the solution.
You can also find a customer with a problem worth solving, but now you have to figure out if you can solve it and make them pay for your solution.
1. What is a Minimum Viable Product?
By definition, a Minimum Viable Product is a product that allows you to maximise the number of things you are learning with the least possible waste. In short, considering you cannot know in advance if what you want to develop will work, why not build a less expensive variation in an even shorter time? Why not figure out well in advance of moving forward before creating the final solution makes sense?
This less expensive and faster variation is called MVP. As we will see later in this article, there are many types of MVPs (Landing Page, Functional Demo, video), but there are no right or wrong MVPs. You have many types of MVPs available to help you validate the assumption that you consider riskier: the price, the target, the Unique Value Proposition, and the features. Before focusing on them, you might be interested in finding out the three most common mistakes to avoid to get to the product-market fit, starting from a Minimum Viable Product or analysing the product-market fit and why it is the only one thing that matters.
From Unique Value Proposition (UVP) to Minimum Viable Product (MVP)
If the Unique Value Proposition is the promise we make to our customers, the Minimum Viable Product must be able to keep that promise. The starting point is always the customer and his problems.
Customer > Problem > Solution > MVP
You need to cancel everything that is not a “must-have” for your customer, all the diversions that dilute your product value. The more complex and full of features the MVP is, the harder it will be for you to understand what impacted the validation or invalidation of your assumptions. The essence of your MVP must be tied to the first problem you are planning to solve.
As I often repeat, to increase the chances of success, you must be brave and remove features. You should know that sooner or later, you will have to “throw away” your MVP. Don’t develop these features, but make sure you do the minimum you need to maximise learning.
2. How to choose the right MVP for my Start-up?
That said, you may be wondering: how to choose the right MVP? As usual, let’s start from the WHY and then decide what to do and how to do it. Before implementing any type of MVP, you must have clear why you are doing it and how you measure the success. Conversely, it will be impossible for you to understand whether you are approaching or moving away from the goal. I personally did dozens of very different MVPs because, from time to time, I wanted to validate different assumptions that I considered to be among the riskiest.
MVP may depend on various aspects:
- Assumptions you want to validate
- Business model
- Your skills
- The team
- The time you want to spend
- The capital
3. How long should it take to create my MVP?
The correct answer is “it depends”. In general, if you are making software and spend more than a month, it is not an MVP. In the most of the cases, I did MVP without writing a single string of code: I spent the most of my time on customer development, understanding what the right MVP to do is, and on customer acquisition, without which I would not have had the users to validate my assumptions.
4. How much does an MVP cost?
Here too, “it depends”. When it comes to software, you can often do it without writing a single string of code, and you can use already existing platforms. For most of the features I tested with the Lean approach, I have always used Google Form, Mailchimp and WordPress. Access to technology is becoming easier and cheaper: there are also platforms to create marketplaces for $79 per month!
5. Will my customers like my MVP?
I find major resistance among the founders, product, design or tech managers who want to embrace this type of approach but are concerned about whether the MVP is bad or they don’t like it.
Below is a series of notes to keep in mind in case you have similar concerns:
- Your product isn’t made to be liked: it must solve problems for which the customer is willing to pay;
- You cannot define quality (and beauty) if you don’t have the target customer clear in mind: one of the MVP’s goals is, almost always, to find the right customer segment;
- MVP is not addressed to all potential and future customers: but rather only to a small portion: the early adopters;
- You are not doing art but business: think about how much time and money you will save. Your vision will not be questioned, but remember that you have no idea if what you are investing in will work;
- You will not do one but many MVPs: while you move forward, the risk will be distributed on other assumptions that you must always need to test. Start and, as soon as you see the impact generated, you won’t be able to live without it;
- When in doubt, tattoo Mark Zuckerberg’s quote on your arm: “I believe that if you’re not embarrassed by your first product release, you’ve released it too late.”
6. Examples of Minimum Viable Product
As anticipated, the MVP you build depends on the assumptions you want to validate. For your convenience, I arranged the main types of MVP that you can create in a continuum that starts from the total absence of the product you have in mind (without a single string of code) to a functional product that someone can use.
The main types of MVP
The best way to understand the alternatives available is to see some examples of Minimum Viable Products.
Demo MVP: Dropbox
This is one of the most famous examples of MVP that gave life to a company that is now valued at $ 7.5 billion and close to listing on the Nasdaq.
Dropbox MVP, which gave life to the company now valued at $ 7.5 billion
The founder of Dropbox was aware that the problem was not perceived as such by people, but he was convinced that once they tried the solution “, they could no longer imagine their life without Dropbox.” He released the video on March 8, 2008, on Hacker News. They went from 5,000 to 75,000 subscribers on the waiting list in just one night!
The story would have probably been different if they hadn’t used the right distribution channel targeting perfect early adopters. Remember 50% of the time for building MVP and 50% for customer acquisition.
Crowdfunding Campaign MVP: Good Night Stories for Rebel Girls
Well, yes, the Lean approach can also be used for physical products. There are platforms such as Kickstarter and Indiegogo that allow you to pre-sell the object you want to produce at a lower price than the future public price. It’s simply fantastic: it allows you to explain your vision (price included!) and see how the market reacts. If successful, you have already collected the money you need to start off. In this case, it’s the most funded campaign ever for a book. They collected $675,000 from over 13,000 people.
The Wizard of Oz MVP: Porch
This is my favourite example and the reason why the developers hate me in these cases. The product you offer looks like fully functional software, but in reality, much of the work is manual. Unlike the Concierge MVP, where the customer knows that you do everything “by hand”, in this case, the Customer doesn’t know that the processes are developed by people rather than software.
If all goes well: you literally go crazy (and rejoice) in managing the complexity created if the product is successful, but the benefits are enormous. You exactly know what to develop next and what to prioritise. The product already “delivers value” to the customer. You now have to work on efficiency and operating costs. If all goes bad: you saved a lot of money and are probably able to figure out what to pivot on and what might work, as in the case of Porch.
From Helpscore to Porch.com
Users used the website to look for the best experts thanks to a series of reports that aggregated data. However, the reports were manually generated by people, thus saving months of development and giving the possibility to test the solution with real users in a short time. Originally called Helpscore, the website would have helped homeowners find experts for home renovation and housework thanks to a powerful scoring system.
The founders thought that an elaborated scoring system based on “cold” data linked to the various experts would have made the life of those who had to choose the trusted expert easier. This approach allowed the founders to save time and money since the assumption was invalidated: the owners were not interested in the experts scoring! They were interested in the “hot” data, that is, if their friends had already experienced the history of their projects, word of mouth. This is how Porch.com was born, which exactly meets the needs the customers had openly expressed.
Single feature MVP: Open Table
We all know OpenTable today, one of the most popular digital marketplaces that simplify restaurant reservations. Few people know how it started. Open Table began by giving restaurant management software to organise tables and assign reservations from the telephone.
Later, they integrated the booking and scoring section. The Single Feature MVP is to realise only one part of your vision. Still, this part must be functional and usable, thus avoiding one of the most common mistakes represented by the two pyramids in the illustration below: many features but poorly developed.
7. The most important element to consider if you choose to develop a usable MVP.
Whether it’s a “Single Feature” or “Wizard of Oz”, if you decide to develop an MVP that involves real user interaction with the product, the typical messy part for you will be the activation flow. The user must live the first rewarding experience as soon as possible. The sooner the user experiences the “core activity”, the sooner you will keep your Unique Value Proposition, and the greater the chances for the user to be satisfied.
This is why you have to force yourself to remove everything that strays from the main problem you are solving and from the final WHY that will prompt your early adopter to choose you. Less is more. But always make sure you don’t sacrifice learning for simplicity. If you need to profile a user to be able to do the segmentation, do it, but avoid including a form with 7 fields. Limit yourself to the 2 most important fields.
MVP Bonus: Fresco Frigo
I met Enrico Pandian some time ago, and he told me about the MVP of his new start-up Fresco Frigo: a smart fridge with fresh and quality products designed for the needs of workers who are increasingly paying attention to their lifestyle. Accessible 24/7.
Created in a few weeks, compared to the time required to industrialise the production of “real Fridges”, the prototype allows to open the fridge with the app/card/badge but doesn’t allow the transaction. Indeed the payment was not part of the riskiest assumptions to validate, and this aspect was solved by hiring a person to assist for the entire duration of the two-week test.
I cannot share the collected metrics, but I can tell you that the outcome was more than encouraging. Based on the evidence and the metrics collected, FrescoFrigo was able to move forward thanks to fundraising and hiring.
Update on Frescofrigo on December 20, 2019: After the first validation phase, Frescofrigo is now scaling production and distribution. I found it in almost all the “cool” Milan offices.
Validation via MVP may seem like a waste of time in the beginning because you would like to start scaling straight away. However, when done right, you save a lot of money and time that you can then invest in the next phase to grow at the speed of light.
8. Final advice for the creation of your Minimum Viable Product
Regardless of the MVP you choose to create, always make sure you have an extremely clear assumption you want to validate and how to measure success.
I will give you an example: you decide that the right MVP is a Landing Page to which you can drive traffic with Google Ads. You choose the keywords, set the budget and at some point, the budget ends. You have not registered any conversions. What does this mean? Is there no demand? Is the panding page bad? Did you get the campaign wrong? The channel? The Keywords? Didn’t you spend enough money to reach the Conversion Cost?
If your assumption is not formulated correctly and you have not chosen how to measure success before the release, the risk of completing the test and being more puzzled than before is very high.
The effect should be the opposite: once the test is completed, you should be in a position to decide whether to persist or pivot. There are many frameworks to formulate assumptions for MVP.
Assumptions validation framework
I believe that [THE CUSTOMER SEGMENT] has some problems [IN DOING SOME THINGS] and that I can help him/her with [MY SOLUTION]. I will know I am right if [METRICS CHANGE].
The MVP you create must help you understand whether your assumption is true or false.