CB Insights recently released a compilation of startup failures. This research is based on 300+ "post-mortems" by founders and investors. According to them, more than 70% of all startups fail in 20 months after first finance raising. Along with the incorrect financial management, the wrong team set up and hiring mistakes, most common mistakes connected with poor market research (no market need, get outcompeted, wrong monetization model, failed geographical expansion, user un-friendly product, lack of understanding of the target audience). Is there a tool or approach to avoid several of these threats at once? Yes! That's what this article is about. The concept that has already become the basis not only for startups but also for business – MVP.
What is MVP? "The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort." – this is definition popularized by Eric Ries in his “The Lean Startup”. This concept can help you with avoiding these common mistakes, checking your hypothesis's potential and discovering your target audience and markets. Information is the most important and valuable part of every business. MVP helps you to collect up-to-date data and statistics. Would you agree that using such information is a more reliable way to make decisions about your next steps?
The MVP concept assumes the creation of a product with a minimum variety of functions to fulfill customers. After creation, the product is tested on the market to see the level of demand for the whole product or specific function. MVP is used for a wide variety of products, mobile applications, and web sites as well.
Types of MVP we can build for you Not sure what type you looking for? We are always ready to consult you to choose the best option. Remember that, MVP created not only for startups, when you're looking for creating something to improve your business It’s commonly believed that an MVP should be created only during a business’s early days. But that’s a mistake. When you’re developing new features, you should always start with an MVP. Release a basic version of a new feature to selected groups of users to test. Once you have feedback, improve the feature before releasing the official version
1. MVP for pre-order This MVP model is used if product development requires a significant investment of time and resources (for example, some innovative products). Also, it used when there are a large number of customers are required to ensure profitability.
2. Customer-generating MVP Customer-generating MVP makes it possible to assess the interest and loyalty of end-users, it is also aimed directly at creating a customer base. When your hypothesis is confirmed and you start developing a project based on an existing map, it will be much easier for you. You will already know your target audience and you will not need extra channels to promote your product.
3. “Concierge” MVP The minimum product acts as a generator of ideas. This will allow you to get benefits from the product before its full development begins. You can check the request for this product and ultimately understand what exactly suits your users.
4. “The Wizard of Oz” MVP This kind of MVP is often confused with the previous one. It should be noted that its main task is to test a specific solution hypothesis. This model has several names. For instance, it can be called manual-first MVP or the "Flintstone" MVP.
5. MVP for single-use A convenient version of one of the existing problems is supposed. this option will help test the hypothesis of the viability of this particular function. For example, you already have a website, and you can create a separate landing page for an individual task and look at its impact.
6. “Alien project” MVP MVP helps test your strengths. In this case, the product is already entering a mature market with clearly visible leaders. Also in the MVP of the type “Alien Product” uses an existing product or service. Sometimes this model acts as a variation of the Wizard of Oz type of MVP.
This is how we create MVPs We provide not only the development but also a market research and analysis to create a complete image of a idea prospects. Below we described the stages of MVP development in our company.
1. Hypothesis Discovery First of all, we discuss with the client the idea of the future MVP. At this stage, it’s important to understand what problems the product will solve, what value should be given to it to obtain greater success.
2. Market Research MVP should be targeted to a specific audience. Reducing user coverage will help to more accurately collect statistics. Thus, it will be possible to reliably learn about the interest of users in this area and, accordingly, check the existing hypothesis. Specialists from our team conduct a detailed market analysis and identify several portraits of target users.
3. Feature Implementation Analysis of the audience and a correct understanding of the hypothesis helps to clearly determine the functions that will be demanded. Depending on the idea, MVP may have different functional features. So, we carefully select the functionality of the future minimal viable product.
4. Repeat! Recall that MVP is created to test the hypothesis and usefulness of your product. Thus, development doesn’t stop at one option but goes through all the stages. After a detailed analysis of the results, the product is launched again for another hypothesis or feature.
What's next? In case the MVP receives a positive response from potential customers, the product is improved with this tested feature. This process repeating until the whole product becomes a complete software solution. We highly recommend such an approach, because it will help you save your time and money.
Let's take a closer look at the numbers.. For example, if you have an idea of on-demand service. To create the whole eco-system with apps for drivers and clients, backend and dispatcher dashboard you need at least six months and about $300,000 budget. If your idea ends up being unclaimed you will waste a lot of money and time. MVP development will help you to understand the real potential of your idea. By spending a month with a budget of around $25,000 you can get the application with minimum viable functionality. It will help you to see the real demand level and receive feedback from real users, MVP also can help you to find more investments for further upgrades and functional addition.
Drop us a line today to take next step in your digital transformation journey.