MVP Mindset – Part 1: Reduces Risk and Inefficiency
Early customers can provide valuable feedback that can help startups create products that people want to buy, speeding up time-to-market and driving down long-term costs.
To gain early feedback and beta customers, startups must be able to offer a solution that brings value to the customer and allows for maximum learning potential with the least amount of effort. That’s a tall order when startups are always strapped for time, talent, and cash.
That’s why creating a minimum viable product (MVP) is so important.
What Is a Minimum Viable Product (MVP)?
Think of an MVP as a method to validate a hypothesis. You have an idea for a solution. You’ve completed some degree of validation—talking to customers, to industry experts, even to competitors. You have surveyed. Based on the validation that you’ve received so far, you have made some assumptions. From those you’ve formulated a hypothesis.
Now you are ready to test that hypothesis with a real product and real customers. It’s time to tackle a minimum (least amount of effort and features) viable (it must be useful to the customer) product.
When it comes to MVP, the magic words are just enough.
Why Does an MVP Matter?
When early customers help guide product development, a startup can find out early in the product cycle which solution features are valued by potential customers and which are not. Early customers can not only help guide product development, when the solution solves a big enough problem or offers significant return on investment or competitive advantage, early adopters may even help finance a startup’s product development.
Additionally, in many markets a working product is necessary to close a first customer. This is an ideal scenario for validating the features of an MVP.
What Shapes Your MVP?
Depending on the industry and customer segments you serve, various market forces will affect what a startup can accomplish with an MVP.
In software, for example, a young company can gain considerable customer feedback with sample dashboard screens and wireframes. In advanced manufacturing or life sciences, MVP requirements will be more complex and challenging.
- IT/Software: It is fairly easy to develop and present software with a variety of prototyping tools. Playing “drag and drop” on a simulated screen with potential customers can stir up a whirlwind of ideas. You’ll get feedback—a lot of it. The challenge is that playing what if with screens can dilute the focus. Too many things become “possible.” It can be a challenge to narrow up.
When creating a software MVP, validation is easy to ignore. Maintain discipline and prioritize features. The goal is to identify just enough functionality to deliver benefits that customers will pay for, not to deliver a forever list.
- Physical Products: Advanced manufacturing companies face a dual challenge of product design as well as considerations of supply chain management, or manufacturing and distribution, depending on the firm’s business model.
Focus on the Serviceable Obtainable Market (SOM), reachable segment(s) of the total market with demand for your product. Target segments that are reachable in three to five years. Create MVP features that deliver on the value proposition that aligns with the SOM.
- Life Sciences: External regulatory forces play a significant role in product design. Leverage stakeholder inputs—clinicians, researchers, patients and their families. Think of Minimum Viable Survey (MVS) instead of MVP. Focus on what you can control and adapt. Go deep with real stakeholders in areas such as form factor, usability, and business models.
Maximize Learning Potential with the Least Amount of Build
When developing an MVP, focus on adaptability in whatever form that takes for your product, customers, and markets.
The objective is to mitigate risk by building an MVP that will help your startup learn and develop the features that are most valuable to customers. This will allow you to construct a cost/benefit analysis as a framework to assist early adopters in cost justifying your solution.
This creates a mutually beneficial relationship between startup and first customers that helps customers quantify the operational and financial benefits of your solution while the startup gains insight into the next product iteration and can set development priorities that provide customers with features that offer the greatest operation and financial benefits.
Questions about Minimum Viable Products? Ask…we promise to answer.