Сompanies are eager to launch their product idea to the market possible. They are convinced they have something special for users who are ready to pay for it. But the thing is customers are inundated with products today. Recent history is littered with tales of good app concepts buried under the depth of the online stores.
From the business perspective, firstly you have to find specific consumer needs and only then develop a product to match it in a cost-effective way. Here's why MVPs are essential for a successful product launch. It helps quickly validate an idea and minimize resources, instead of spending too much on an ill-conceived project.
Considering the relevance of these issues, we've developed this MVP development guide for non-technical founders and everyone interested in creating a new software product.
What is an MVP (minimum viable product)?
MVP is described by the term's inventor Eric Ries as the "version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort".
In other words, minimum viable product (MVP) is the version of the product with a limited number of features that can be implemented and launched with minimal app development cost and within the tightest timeframe. If you are wondering how to create a startup, MVP implementation should be on your agenda.
Minimum viable product cost is affordable because you focus on the critical feature set and leave the bells and whistles for later.
Whichever definition you prefer (except NBA's "Most Valuable Player"),every MVP must possess:
Enough customer value to attract clients willing to use the product and pay for it
A clear vision that will make first adopters stick around
The comprehensive feedback loop to direct future development
Let's say you decided to create an online tool that would help art studios and painters promote their works and tutorials. <medium>Before plunging headfirst into work, ask yourself if artists really need such a platform. What if they are content with social media?<medium> You can test your first assumption by contacting local studios and talking to artists online to gauge their interest.
If you've found several interested people, ask them how much they are willing to pay. If the sum is enough for you, create a beta version for a focus group. The first round of testing will determine if your audience is tech-savvy enough to use the service you want to provide. The next steps we will highlight further.
What are the main benefits of starting your project with MVP?
Over time the term has gotten new interpretations and is now used throughout various business concepts and methods, including CustDev, Agile Development, or Lean Startup.
So, what is the secret to MVP approach success, and why it's widely adopted?
1
Reducing App's Launch Time
Developing only core functionality speeds up the release of the product.
MVP will be developed and launched within the tightest deadlines. It
means that anything you don't have time for will be realized during
future iterations.
2
Budget-Friendliness
Instead of pouring all resources into a questionable venture, you take a
fraction of the money to get proof of concept. With the MVP approach
apps are created iteratively and the cost is spread over time. The
minimum approach helps to prevent the product from becoming
overcomplicated and requiring more sophisticated solutions.
3
Less Room For Error
MVP development process highlights performance and security issues. You
can assess the chosen technology stack and security practices in place
with a limited number of users. If you are building an MVP, you have
time to correct mistakes and improve the app with little damage to your
reputation.
4
Better Chances To Find Investors And Raise Funding
MVP is also a developmental technique for satisfying early investors.
Building confidence in the future product being pitched is the key to
receive buy-in. It's about creating an early version of the product in a
pre-investment phase, in a very short amount of time with the sole
purpose of showcasing it to stakeholders and investors.
Freshcode Tip
Just a parable brief story of success: Dropbox CEO Drew Hudson knew that file storage was a common problem — USB drives were small and easy to lose. Before Hudson secured funding and create a complete product, he created a demo video to present how the very first version of Dropbox could seamlessly save files. This approach attracted the attention of a lot of people, helped Drew get accepted to Y Combinator, and connected him with his future co-founder Arash Ferdowsi. Combo.
Morals: It's not an MVP itself, but a great presentation of platform capabilities that could be a good example of how to present your product. Before throwing tons of money into development, consider launching an approachable demo presentation for potential partners and investors.
5
Clearer Focus On Key Goals and Strategies
Minimum viable product development gives clarity of vision and purpose.
Even if the MVP is not successful, the price of the business error is
minimized. You can continue development adjusting the product for other
niches or rethinking the idea completely.
6
Establishment Of Customer Base
Finally, MVP contributes to making your product 100% customer-oriented
and target your audience. It helps to engage new stakeholders at the
initial stage of the development, as well as users who will spread the
word about your product.
How to build a minimum viable product? MVP development checklist
MVP prevents your initial product from getting cluttered with useless features. The details of MVP software development might differ from project to project, depending on requirements, time constraints, budget, etc. However, the main stages are the same:
1
Step №1: Validate idea
MVP is mostly about ideas validation with minimum loss of resources.
It's all about testing if your solution is required by anybody and what
potential customers want you to create. Generate a detailed mind map
embodying the founder's vision and pre-estimated product's market
value.
2
Step №2: Generate a list of features
Develop a system requirements specification (SRS) to describe the
product's primary features. MVP prevents your initial product from
getting cluttered with useless options. After the release of your first
product's version, you can test key hypotheses quickly and gather users'
feedback about feature set improvement.
For a true MVP you need minimal features, but much new product value.
3
Step №3: Consider UX & Visual Design
Develop a system requirements specification (SRS) to describe the
product's primary features. MVP prevents your initial product from
getting cluttered with useless options. After the release of your first
product's version, you can test key hypotheses quickly and gather users'
feedback about feature set improvement.
4
Step №4: Develop MVP
Once start building, the team usually commits to deliver an MVP within
several development iterations (sprints). Each sprint consists of the
main part of the development and is followed by testing, bug-fixing, and
fine-tuning stages.
5
Step №5: Deliver a product
After the MVP has been tested, it is deployed and launched to the users.
It's a crucial part of in-field concept testing. Wait for the feedback
and be ready for the critique - good feedback on mistakes is the best to
examine your gaps and "thinking about what you've done and how you could
be doing it better."
Freshcode Tip
Procrastination with the product release date
leads to the development of purposeless features and wasting time on bug
fixes. There always is someone who can release the same good product
before you — ideas are in the air!
Do your best to
keep your initial release minimal, and subsequent releases
incremental. It will make you much more responsive to the market.
6
Step №6: Collect data
With an MVP you can efficiently gather various data, including metrics,
statistics, and users' insights. Collected data and detailed research of
the target audience can't be overestimated — as companies begin to
collect and analyze data and feedbacks they can invest more, and more
intelligently.
7
Step №7: Discover and learn
Analytics plugins let you evaluate the UX design and the most frequently
used features. This data, coupled with reviews, will help you build the
app's final version and make it perfect before launch.
The MVP development cycle is kind of the wheel of Samsara iterations. You should repeat the MVP process from developing the idea till the launch of the finished product: get an idea-test-build-analyze-accept/cancel/improve.
Freshcode Tip
In case you don't possess technical skills, you'll need to assemble the team from the ground up. We recommend outsourcing software development companies with specific expertise related to your future product.
Such a team with an in-depth understanding of the current industry trends will help you to select the optimal technological stack, as well as the feature set ideally suited for your project.
How to measure MVP success?
The vital opportunity granted by the minimum viable product is the possibility to gather actionable data that help validate the project's relevance and demand.
Early adopters help identify critical shortcomings and features in need of upgrading or replacement. This data is even much more valuable than the best assumptions of BAs and industry experts.
Here are key indicators you need to pay attention to after your MVP is launched.
1
Word of Mouth and Engagement Level
With an MVP, companies can gather
data on how users interact with your app and insights about free
advertising triggered by customer experiences.
Word-of-Mouth is called one of the best marketing promotion tools. While
the
Clubhouse app
used an invitation-only solution to promote their platform and receive
'widespread publicity' (by the way, we are not adherents of such
approaches), other use such strategies as influencer marketing, hashtag
effect, reviews, etc.
2
Sign-Up %
The main approach is to identify the general flow of visitors on the
site, particularly the number of registered users. This is the main
indicator showing the
level of customers' curiosity about your product. The
next task is to
find a way out how to keep them interested enough to keep coming
back.
3
Client Appraisals Based on Feedback
MVP's point is not to have all the features in place, but to get
feedback from your early potential clients so that
you can later develop the right features, the ones users actually
want and would pay for.
4
Percentage of Active Users
This is your key indicator if customers not are only curious to try your
app but are really enjoying your business model. Note, that
counting active users of your product might be a tricky task
in order to link users with multiple accounts and devices, and create an
analytics tool as a simple BI solution to understand your user base.
5
Client Acquisition Cost (CAC)
With this indicator, businesses can gauge how much they're spending on
acquiring each client. In other words, you can
count how many resources should you spend to win a paying
customer
and is it cost-effective at this stage.
6
Number of Paying Users
This indicator is relevant with a complete beta version of the product
when its functionality and business value is enough to engage paying
users. A good strategy is to
add a pay subscription with premium features
while
keeping the free version of your product
(instead of making your MVP a fully paid service from the start).
7
Client Lifetime Value (CLV)
CLV is often related to Client Acquisition Cost (CAC) and associated
with the profit users generate during their entire relationship with the
company.
Higher Client Lifetime Value = more profit to the business. It will help you to know how much your company should invest in
acquiring new clients, as well as retaining existing ones.
8
Churn Rate Risks
This model can identify when it's been too long since customers' last
activity. The Churn Rate Risks indicator is usually calculated by
dividing the number of clients you lost in a quarter by the number of
clients you started that quarter with.
When is reasonable to skip the MVP stage?
You've already created dozens of successful products, and you know exactly what the customers need. In this case, it's not necessary to build an MVP. Or maybe you have access to unlimited resources, and you are not pressed for time. If that is the case, skip the MVP and go straight to the top.
There are several clear signs warning you when should you skip developing an MVP, including:
You've already had a solid customer base
... and you know customer expectations perfectly,
... as well as a proved demand for the existing feature set
Otherwise, the MVP might be just what you need to actually get in touch with your customers and receive first payments.
Mind you, even such giants as Uber, Airbnb, and other companies whose names you can see on the pic below, used MVP and only then became startup unicorns.
For example, Uber's MVP (UberCab) launched in 2009, was available only in San Francisco and working only on iPhones or via SMS. MVP helped founders to test the risk (without wasting time and money) and make sure that the ride-sharing idea had a market.
The MVP should not be your ultimate goal. It's only the first of many steps that will lead your business to success. <medium>Think about any of the modern IT giants: every one of them started small and constantly evolved the product, taking into account customer feedback and making adjustments<medium>. That is why decades later their products are still desirable. Others, who refused to adjust and stopped at the MVP stage, are long forgotten. Or does anyone still use MySpace?
The most important lesson creating the MVP will teach you is how to balance your priorities. Minimum viable product may not be the best, most advanced version, but it provides your customers with value and keeps them coming back for more as long as you heed their feedback.
Final thoughts
Your MVP is the beginning of a stronger product.
It may not be the exact product you end up with, but it gets you on the right track.
Our task is to help clients find this track for success and hit the ground running with their products. If you have an idea and want to see it implemented, contact us to develop a viable MVP.
With a keen understanding of the software development landscape, Alex implements best practices to deliver exceptional experiences for Freshcode clients.
