What is MVP and how to create it

To achieve success with minimal risks and costs in an environment where 90% of launched startups are closed, each project should start with the launch of a minimally viable product. In this article, we will analyze the concept, types and stages of building an MVP.

A very common reason for the failure of a startup is the lack of market demand. In almost half of the cases, entrepreneurs spend months or even years of work only to realize that the hypothesis was wrong, and no one is interested in their product.

The concept of MVP (Minimum Viable Product) is designed to minimize the risk of such a situation. It is applicable to the creation of any product, but is more often used for the development of software and digital services.

The concept of MVP was introduced in 2001 by Frank Robinson, co-founder and president of SyncDev consulting firm. Robinson defines MVP as the result of "synchronous development" — simultaneous product development and research of the target audience, its reaction to the product. MVP is a version of a future project that allows you to collect maximum practical data on how customers interact with it, at minimal cost.


Differences between MVP and PoC


MVP is often confused with PoC — Proof of Concept — proof of concept correctness. These concepts are interrelated, but not equivalent. As PoC are: the reaction of potential customers to the announcement, the number of pre-orders, marketing and sociological research and other theoretical evidence that the future product is interesting to the market. MVP is more than proof, it is a workable product.


Differences between MVP and prototype


However, MVP is not a prototype. A minimally viable product contains only the most necessary functionality, but it should not be crude or primitive. On the contrary, the main function of the MVP should be performed as best as possible.


MVP Tasks


Minimum Viable Product is created not to test technologies, but to test in practice whether users need such a product, whether the hypotheses underlying the business model are correct. The main task of the MVP is to minimize the time and effort spent on testing the market reaction to the idea.

MVP allows you to attract real users to the project as guides who will help adjust the business model and basic characteristics of the future product, outline development directions and plan a roadmap for updates. Positive results at the MVP stage give the green light for the development of a full version of the product.


MVP example


An illustrative example of MVP is WhatsApp messenger, which at the time of publication in 2009 had no functions for sending messages.

The creators of WhatsApp, Jan Koum and Brian Acton, proceeded from a simple idea — to create a mobile phone book that would show the status of a contact: available, busy, at a meeting, driving, in the gym, and so on. When users indicated the status, their contacts received a pop-up notification.

Soon, Kum and Acton noticed that users began to use statuses to communicate. Seizing on this idea, they released a new version of WhatsApp, which had more features related to sending messages. As a result, the small user base grew to 250,000 people in a matter of days, proving that the developers are on the right track.


Advantages of MVP


Thus, a minimally viable product allows to:


  • confirm the viability of the idea and test hypotheses about the product using real data;
  • identify trends that can be used in the development of the full version of the product;
  • reduce the risk of major financial losses in the event of an unsuccessful product release;
  • reduce the cost of development by prioritizing important and identifying unclaimed functions;
  • speed up error detection and internal product testing;
  • build a user base before a full-scale launch;
  • to occupy a market niche and attract investors ahead of competitors.


Varieties of MVP


Among the numerous approaches to creating a Minimum Viable Product, there are three main approaches.


  1. A product with a single parameter


The most common way to create an MVP has already been described using the example of WhatsApp. This is an application or program that performs one or two functions that are necessary to test the viability of your idea. If the main functionality of the application is not interesting to users, then it is pointless to continue investing in the development of forces, time and resources.


  1. Disparate MVP


This approach is used if the product idea can be implemented without developing unique software solutions, using a set of ready-made software.

Combining various tools into a single complex and, moreover, developing original software makes testing a business idea labor—intensive and expensive. Sometimes it is worth moving to these stages of development after receiving feedback from users.

This is how the Groupon service was launched. At the start, it was just a primitive site based on open source code. All Groupon services were provided by e-mail. Social functions, a full-fledged email newsletter, automation, a mobile application — all this was developed later when it became clear that collective purchases were in demand.


  1. The Wizard of Oz and the concierge


These close varieties of Minimum Viable Product imply the rejection of long and expensive development in favor of manual labor.

The hero of the Frank Baum fairy tale (Lyman Frank Baum) portrayed himself as a wizard, and MVP of this type pretended to be full-featured services and applications. In fact, instead of algorithms, the Minimum Viable Product is provided by people.

The Wizard of Oz does not advertise this fact. This is what the founder of Zappos, a large American online store, did. To make sure of the viability of the idea, he started selling long before he automated orders and even rented warehouses. Nick Swinmurn personally served the first customers by purchasing discounted goods at retail and reselling them.

The difference between products built on the concierge model is that they are openly positioned as providing services to real people, and use this fact as one of the competitive advantages.


Creating an MVP: A Step-by-Step Guide


To launch a minimally viable product, it is necessary to go through eight preparatory stages. The first four steps are aimed at preliminary clarification of the business idea. The fifth and sixth stages relate to product design, and only at the seventh and eighth points will it come directly to development and testing.


  1. Formulate the task


Each product is created to solve a certain task, and it's not about making a profit. A client-oriented approach is required here. What does the user need the product for?

Clearly formulating the answer, you will get an idea of the task of the product and its value to the user. So, by opening a service for short—term rental of parking spaces, you solve the problem that all drivers face - you make it easier to find a place where you can park your car.


  1. Identify the audience and highlight its core


Focusing on the needs of a wide audience when designing an MVP is a flawed strategy. Narrowing the target audience allows you to more accurately orient the future product. To do this, you need to formulate a portrait of the "ideal" user, a person who will buy your solution without hesitation and will be satisfied with its capabilities.

Usually, such a portrait includes information about the user's age, education level, income, habits, interests and hobbies. These details are necessary to understand how well the product suits the future user, and will help later, at the stage of advertising and promotion.


  1. Study your competitors


Even if you have come up with something really new, there will be companies that are already operating in the chosen industry. Their experience, advantages and disadvantages should be carefully studied. Find out what their market share is, why customers come to them and what makes them unique. These details will help to adjust the MVP.


  1. Perform a SWOT analysis


This method of strategic planning has been used by large companies to make management decisions and form business policies since 1963. And although it is usually used on a much larger scale, SWOT analysis is well suited to identify strengths and weaknesses, opportunities and threats for a minimally viable product.


  1. Make a path map


After a fundamental analysis of a business idea, it's time to look at the future product from the user's point of view. The path map is the order of actions that the user performs to achieve his goal, for example, to purchase a product or find and rent a parking space.

This path should not only be as short as possible, but also simple and convenient. Having thought through how the user interacts with the future application, you will understand at what stage to provide additional information, where to add a hint and how to optimally design the interface.


  1. Identify the main functions to implement and calculate the volume of MVP


No matter how large the conceived project is, for MVP it is necessary to list and prioritize its functions. When creating a Minimum Viable Product, preference is given to those that are directly related to the main purpose of the future product.

The introduction of additional features into the prototype will only confuse users and reduce the reliability of the results of the business idea research. They can be added after the deployment of the MVP, collection and analysis of primary feedback.


  1. Choose the appropriate methodology and develop an MVP


Having determined the scope, order and direction of work, you can start developing a minimum viable product.

The result largely depends on how exactly the development process will be built. For MVP, it is fundamentally important to use one of the iterative approaches to development. Lean, Scrum, Kanban, extreme programming — all of them allow you to establish regular release of updates, improve the product "on the go", as feedback arrives. The choice of a specific methodology depends on the preferences of the development team and the specifics of a particular project.


  1. Test the product


A minimally viable product requires regular testing throughout development. Alpha testing is carried out within the team by testers, but beta testing will require the help of outsiders. It's good if these are people from among future users. Those who want to participate in the test can be found on sites such as BetaList, ProductHunt, Reddit, Quora or attract through their own communication channels: social networks, blogs and email newsletters.

The main task of testing will be the technical improvement of the MVP. Before the release, the product must work without errors, so that technical problems do not prevent users from evaluating its functionality.


Launching a minimally viable product


For the project team, the work is just beginning. From the moment of launch, it is necessary to collect, save and analyze feedback, starting with statistics and ending with data on user behavior and feedback. This information is what everything was started for.

The data collected with the help of MVP will allow you to understand whether the project has prospects, help generate new ideas and develop a product development strategy based not on assumptions, but on facts. Thus, MVP testing will fully justify itself.

Our experience allows us to evaluate the data received and analyze feedback from customers. We understand that launching an MVP, testing a product and processing feedback are complex and costly tasks that require a professional approach.

If you are launching a new product and don't know where to start, contact us via email and we will help you implement your project.