Facebook, Zoom, Tinder, TikTok, Uber, Spotify — today, all these companies are the giants of their industries. However, that wasn’t always the case. There was a day when all these platforms had minimal functionality and a primitive user experience.
Although it can be hard to imagine, Facebook was initially designed as an online directory with the sole purpose of connecting Harvard students via a social network. The website had limited features that allowed students to search for their classmates and check their friends’ friend list.
Later on, the platform extended its reach, adding on more universities. Eventually, they opened up their platform to anyone who was older than 13. Now, Facebook is the biggest social network worldwide, with more than 2.89 billion monthly active users as of Q2 2021.
When looking at Facebook’s trajectory, we can learn that steady growth has the potential to lead to unbelievable success. In the tech world, this type of approach is known as using an MVP.
What Is an MVP?
MVP is an abbreviation for “minimum viable product.” As you may already know, an MVP is a product that is created and released with minimal functionality rather than as a full-fledged solution.
The use of MVP can be traced back to 2001 when Frank Robinson first coined the term. Later, the term MVP was popularized by two American entrepreneurs, Steve Blank and Eric Ries.
At the core of the MVP development approach lies the idea of creating a product with just enough features to be functional. Later, when customers try the product, the owner collects user feedback to make further integrations based on user needs.
Therefore, MVP development allows entrepreneurs to assess the viability of their product based on customer experience. In the end, there are two possible paths: scale up with clients’ needs in mind or shut the project down at an early stage if the product doesn’t appeal to its target audience.
Why Start From an MVP?
Why would you launch a product with limited functionality when you can offer your users a bundle of features from the very beginning? Well, there are many reasons why startups and established brands may be in favor of starting with an MVP, including:
Starting with only functional features allows you to determine whether the solution deserves a chance to exist. In other words, you can never know for sure if your product is going to deliver value to the market before testing the idea.
Each added feature means extra resources. It’s always better to start with essentials and enrich the product with the necessary functionality later to cut the initial development costs and reach the ROI earlier.
Full-fledge applications require a lot of time to develop. Therefore, users will have to wait for the product’s launch. With an MVP, you can access the market earlier, outperform your competitors, and gain a share before them.
You can’t know for sure what features users want and need. Often, the users themselves don’t always realize what they want until they try out the product. An MVP allows users to get acquainted with the product early and provide you with prudent feedback. Based on this feedback, you can make a more informed decision on further scalability.
It’s never too early to start marketing. With marketing, the sooner, the better. An early marketing approach allows brands to engage with customers and develop users who look forward to the final product.
In addition to these five reasons why many opt to use an MVP product development model, there is an extra advantage for startups seeking third-party investments. For instance, imagine you are an investor who is ready to make a hefty donation to a promising developing project. Which option would you invest in: a theoretical idea or a viable, tangible product? The latter, of course.
This model is probably how Cobble, a decision-making app for couples, managed to gather $3 million in seed funding in just over a month. The app that was launched in June 2020 helps couples to find date ideas that satisfy both partners. Although the startup still needs to develop an Android app and work on marketing, Cobble amassed over 2,000 users in the first six months, which are critical figures for investors.
There are billions of ambitious founders who have million-dollar ideas, but only a percentage of these founders will research the market and work out a business plan. Furthermore, entrepreneurs who end up building a real product, like Cobble, are even rarer.
Entrepreneurs who move forward into development tend to stand out, as they can prove that their idea can survive in harsh market conditions. Hence, investors are more likely to gain profit or at least reach an ROI. An increased likelihood of acquiring an ROI is a significant benefit of using an MVP, as 75% of venture-backed businesses never return cash to investors, according to Harvard Business School lecturer Shikhar Ghosh.
However, no approach is perfect, and that doesn’t exclude MVPs. Limited functionality raises the risk of losing some customers who aren't satisfied with the offered functionality. To eliminate this threat, you need to think through the features you plan to include in your MVP so that your product solves a problem and its features contribute to usability.
How to Build an MVP?
So, how do you build an MVP? Don’t start by rushing into hiring the development team.
Before you move forward, there are many factors you should consider. In our next section, we will provide a detailed guide on how to approach your MVP with maximum efficiency.
Determine the Problem
Every product is created for a purpose – to solve a particular problem. In other words, every product delivers real value to customers, making their life easier.
For example, Airbnb allows users to find affordable accommodations around the globe, and Uber app provides an accessible service to quickly get a ride. Both entered the list of unicorn companies and have successfully moved to the next stage: IPO. Specifically, Uber went public in 2019, and Airbnb in 2020, as well.
Both Airbnb and Uber were able to solve a problem with their services. When developing your product, you should know that your product should solve one of these two types of problems: an existing problem or an artificially-modeled one.
An Existing Problem
This type of problem means that customers lack a solution. For example, Whatsapp was created to help people reach each other.
Whatsapp’s co-founder, Jan Koum, was always missing calls when he went to the gym. That’s why he decided to launch an app that features statuses to let others know whether a person is currently available to talk.
An Artificially-Modeled Problem
With this type of problem, the main idea is to introduce new user behavior that will provide a better experience. The world is continually changing, and we always see changes in politics, economics, and technological capabilities. And, as the world changes, consumer needs evolve, too.
Let’s consider the current COVID-19 pandemic and quarantine. These worldwide changes provided an opportunity to introduce a brand-new customer experience.
For example, people have started to opt for digital analogs of traditional services, and businesses have launched numerous products for online, remote collaboration. In particular, there has been a rise in video communication platforms.
Usually, introducing a solution for an artificially-made problem means higher marketing and functionality costs because you are delivering a new experience to your audience. In these cases, you need to clearly explain the benefits of your product to your audience and provide maximum user-friendliness.
The ultimate factor to keep in mind when solving an artificial problem is the product’s use. The application should be useful, or you risk joining the club of startups that failed due to a lack of market need, which is the top reason why startups fail, according to CBInsights.
Analyze the Market
The next step is to carry out a market analysis, and through this process, you can scan for competitors. You should know whether alternative solutions exist, and if they do, you’ll need to determine your product’s distinct features.
High competition means that you need to stand out from an array of similar products. For example, you can distinguish your product using a better design or cleaner functionality.
Alternatively, the key to success may be offering a new solution to an existing problem. By using the competition to your advantage, you can show your prospects how efficient your product is compared to others.
Although your initial focus should be on the primary market, don’t forget to analyze other markets, too. With a global mindset, you reduce the risk of failure in foreign markets if you expand in the future.
Target the Audience
At this stage, you should be able to precisely describe the end-user and successfully market your product. Here, age, sex, location, interests, and other valuable marketing and development data must be generated.
It makes sense to set up a group to test the MVP application and provide you with their insights. You can even hold a pre-launch before the official release. During the pre-launch, you can select a handful of clients to try your product, collect their feedback, and make any necessary adjustments to the app before the full launch.
Additionally, if you are looking to spot early evangelists, you can create and promote a landing page with a full product description. On your landing page, have an area where those who want to try your product can leave their phone number and email address.
If you don’t know how to drive the prospect to the site, check out what Dropbox did. Dropbox launched a demo video about their product. As a result, the beta waiting list increased 15 times overnight.
State a Business Model
In the context of building an MVP, a business model can be defined using three aspects:
- Value proposition — Value proposition is about what consumers will gain and is based on three previously-mentioned factors: the problem, the peculiarity from market analogs, and the audience.
- Monetization — Monetization affects functionality and the overall idea. Although you may not include it in your MVP 1.0, you will in future updates. Planning your monetization strategy helps to minimize future mistakes and additional costs.
- Distribution — Before you start to build an MVP, think about how you want to distribute the product. Find the most cost-efficient and direct ways for your product to reach the end-user.
Identify a User Flow
Here, the task is to identify a user flow that covers a user’s whole journey from their initial interaction with the product to a successful outcome. For example, in e-commerce applications, the primitive user flow typically looks like this:
Of course, each step listed above includes sub-steps, like browsing different product models or viewing product photos. All in all, identifying a user flow is one of the most time and energy-consuming stages.
List the Essential Functionality
A typical problem that startups face is an abundance of product features that aren’t necessary for the first version. That’s why when you build an MVP app, you should distribute functionality into several updates, starting with just the essentials for the initial launch.
There are several methods to determine which functionality should be included in the MVP 1.0. The most effective way to accomplish this is through prioritization.
Prioritization starts when your team brainstorms to create a backlog of all the possible features. Then, each feature is categorized according to its priority and the extent to which it affects the product's value. Each feature will be determined as one of the following:
- Influences value;
- Might influence value;
- Doesn’t influence value.
Functionality that doesn’t influence the app’s value should be postponed for later updates. The features that might influence value should also be held on to or substituted. For example:
- If you are interested in offering all social networks for authorization, you can choose the most popular social network among your audience. Alternatively, you can opt to only offer email or phone authorization instead.
- Instead of creating a separate page for feedback, leave an email address that users can send their feedback to or provide a pre-filled feedback form.
Here, you shouldn’t sacrifice analytics services. To make a reasonable decision on what functionality you’re keeping, consult with marketing specialists about what metrics are essential. For example, you should track the pages that users leave on instead of monitoring how much time is spent on signing up.
Planning the Development
A successful development should go smoothly; the work should be aligned, the product should be high quality, and the budget shouldn’t be undermined. Here, the key to a smooth development phase is prior planning.
Before you start to create an MVP, you need to determine whether you will develop your own product or turn to an agency. At this stage, consider overall expertise and budget. Then, start working out more in-depth development details by answering the following questions:
- Who will be included in the development team?
- Who will create the app’s design?
- Should you use native or cross-platform development?
- How will the testing phase be carried out?
Sometimes, it may be too complicated to answer these questions alone. If this is the case for you, consider involving professionals in this decision-making process.
When the above questions have been resolved and MVP app development begins, you should check how the development process is going once every two weeks. During development, product owners are usually tempted to add more features to perfect the product, especially if the budget is loose. However, adding more features is the wrong approach because doing so undermines an MVP's philosophy.
If you can afford extra features, reference your list of optional functionality from the planning stage but remember not to get carried away. Your main priority is to launch an app as soon as possible in order to collect feedback that helps you improve the product according to the customers’ needs.
What to Do After an MVP Launch?
MVP development uses the Build-Measure-Learn cycle, a term coined by American entrepreneur and author of The Lean Startup, Eric Ries.
Using this methodology, you develop a product, meet consumer needs in the shortest time frame, and then continue improving the product. The principle is as follows:
- You have a hypothesis based on which a product is built.
- Consumers use the product while you measure their feedback.
- You learn from the results, which leads to a new hypothesis. Here, you’ll find yourself at the beginning of the Build-Measure-Learn cycle again.
After your MVP launch, follow this methodology. Collect the feedback, fish out new ideas, implement them, and test further.
During the feedback stage, you should work with a test group to collect meaningful insights about the product’s strengths and weaknesses. For example, you may want to survey a test group on what they would like to see in future versions of the application.
Additionally, the feedback stage is ideal for developing loyalty and transforming test groups into brand ambassadors that will spread the word about your app. Communicate with them and share your plans for the future.
Although revealing new updates isn’t appealing to many entrepreneurs, it’s a reasonable action plan for retaining customers. Here, product owners often fear that if they release news about upcoming features, their competitors will implement identical features. However, not communicating with your target audience prevents you from building customer loyalty.
Remember, competitors are always out there doing their best to outperform you. If you are open with your target audience, you can reach a level of transparency between you and your customer base, where customers will first come to you for assistance.
For example, if your customer base trusts you, they will come to you first before negatively reviewing your product online. In this case, their relationship with your brand saved your reputation on the market.
What Is the Secret Behind a Successful MVP?
Based on the best MVP practices, we can determine the following five criteria when defining a successful MVP development process:
- Early planning — The more time you devote to planning, the more mistakes you catch, and the more additional costs you eliminate.
- Data-based approach — An MVP and its subsequent updates should be backed up by data to reduce the risks of no-market-fit and unnecessary functionality.
- Proper marketing — Your audience should anticipate the launch; therefore, you need to devote a significant amount of resources to marketing.
- Only essential features — Don’t try to enrich your app with everything. Limit an MVP to the vitals.
- Highly-skilled team — A professional IT team is your backbone when it comes to building an app. Having a skilled team helps to guarantee a flawless application and faster development.
If you keep these criteria in mind, creating a one-of-a-kind MVP at reduced costs can be possible within a short period.
Now you are ready to start your first MVP development journey. Just follow the described steps and strategies to build a successful MVP for your startup.
If you still have remaining questions or want to receive a consultation on any details like concept development, prototyping, testing, and choice of an MVP development company, please let us know.