In product development, creating a new product takes time and investment. You need to know what your target market wants, what competitors are doing, and a whole lot more. This takes months and sometimes even years to complete. However, some companies cannot afford that kind of expense especially startups. Startups usually fail because their initial product is all built on assumptions. Even with all the data at hand, their idea that the product will solve a problem may not be a problem in the first place.
This is where MVP or minimum viable product comes into play. It was first coined in 2001 by Frank Robinson of SyncDev and later on popularized by Steve Blank and Eric Ries. It’s referenced in popular books The Start Owner’s Manual, The Lean Startup, and Business Model Canvas. With the introduction of no-code development, creating MVPs has become easier to make with lower financial risk. On MVP’s 20th year, read on to know what is MVP, what are the benefits of doing this, and what digital brands started as MVPs.
MVPs are a digital product with basic features that can provide the promised service to early-adopter customers and validate a product’s market viability early on. It is not about creating a subpar product but an early version that can be developed into something better. In software or app development, this strategy can help the product team receive user feedback to improve the product and save time and money on theories.
According to SyncDev’s website, it started when Stanford University professor William Sharp won the Nobel Prize in Economic Sciences in 1990 for his contribution to the capital asset pricing model. His Sharpe Ratio (Return on Investment vs. Risk) became a major Wall Street brand and basis for establishing Financial Engines, Inc. [FNGN] in 1996.Sharpe’s team contacted SyncDev to develop their customer pipeline, product, and business model. Working with the Sharpe team, SyncDev, Inc. saw that the Sharpe Ratio can be a solution for amore affordable and low-risk product design.
Doing MVP has both rewards and risks involved. Eric Ries said in his Lean Startup methodology describes the purpose of MVP as a version of a new product that lets developers collect validated learning about customers with the least amount of effort. Here are other advantages you can get when you launch an MVP:
Being the pioneer brand can make you top of mind in your category. As soon as you get the feedback you already have the advantage of data and usage patterns that can help you improve your product vs a competitor who’s still in the development phase. Launching earlier can also mean marketing and advertising your product earlier to get a head start.
Research and development cost money and time. Having an idea can take months to validate and improve before it goes live. Sometimes even the best data can also fail when done in actuality. With MVP, you can scrape out half the time to develop and just go do it.
By gathering data, you can get a grasp of what the market really is and assess gaps that your product can fill. This can yield real-time findings rather than focus group discussions where insights might take longer to flesh out.
Launching your paid app while you develop it helps on the financial side. You get to have some paid apps even if you’re in your testing and development stage. This can ensure that there is regular funding even when it’s an MVP.
Successful MVPs usually don’t stay startups for too long especially with revenue coming in. If you are planning to create your MVP, here are some inspirational brands that started as an experiment and became full-blown digital products.
You probably have watched the movie or read it somewhere. Facebook was founded by Mark Zuckerburg, Eduardo Saverin, Dustin Moskovitz, and Chris Hughes in 2004 in their Harvard dorm. Early versions had very basic buttons and interface but the idea and brand colors remained.
Starting as a demo video MVP, Dropbox explained the benefits of storing data digitally. The MVP validated the risky assumption that customers wanted the product he was developing since customers signed up after the video was launched. Even after their success, they know their most valuable asset – people’s trust.
Amazon started as an online bookstore in 1994 and even then, Jeff Bezos knew he wanted to build an everything store. Since that is not feasible on day 1, Jeff focused on one category started selling books. In the true spirit of a minimum viable product, what they earned they used to keep on iterating on it.
MVPs are more than just a short-term strategy for product development. It has to be a company mind set that’s agile, flexible, and willing to learn along the way. Utilizing no-code development, MVPs become a smarter choice that lets you gather data, validate theories and improve your app as you start earning.