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MVP OR WHY YOU SHOULDN'T CREATE A "PERFECT" PRODUCT RIGHT AWAY

Marketing Manager
Anastasia Shevchuk

INTRODUCTION

The acronym MVP has more than 70 meanings. MVP provides you with an opportunity to be a Most Valuable Player in sports, a Marketing Vice President in business, and Most Valuable Programmer in software development. But this article is not about work positions and meanings of MVP in different areas. This article is about Minimal Viable Product and its importance in software product development.

Developers adopt the MVP approach to test the software's performance, minimize errors in the final product, and reduce overall development cost. This is particularly true for startup businesses where the resources, budget, and technical skills are limited.

But what is MVP, and why is it important in software product development? Let's dive deeper and find answers to these burning questions.

WHAT IS AN MVP?

MVP is a no-frills version of a product with the core features needed to solve your users' problem and provide immediate value while minimizing development costs. Minimum Viable Product allows you to test key hypotheses, gather user information and go to market quickly.

Sounds great, right? Just pick the core features you need, test with users, and continue to build future iterations of the product until it looks like the app of your dreams.

Due to the development of a minimum viable product (MVP), you learn how target users experience and react to the app's core purpose, and with this feedback, allocate the budget to areas that best satisfy overall business objectives. The process of building an MVP helps to identify user pain points and determine the proper product functionality to transform these weak points into strong ones.

WHAT IS BEHIND THE ACRONYM MVP?

The "Minimum" part of the MVP is about effort, which often translates into the number of features the MVP should have to succeed. The problem is it's difficult to quantify what the minimal set of features should be. When building your MVP app, remember that you need to get out something pretty fast. The quicker you finish an MVP, the sooner you will collect users' feedback. Start with a bare minimum: create wireframes, images of the app views, and clickable prototypes, make a visual presentation.

The "Viable" part means the MVP should bring profits. One of the main reasons for building an MVP — to get paying customers. If you are in the app business for profits, you should account for the monetization strategy. It can be a subscription or in-app purchases, but an MVP app should be able to turn in some income. Otherwise, it's a failure.

The "Product" is the least controversial part: everybody knows what a product is. Product is a full-featured, tangible and complete application.

MVP DEVELOPMENT STEPS

Step #1. Define Problem You're Solving

The first step of successful minimum viable product development is to evaluate a business idea. Put yourself in the customer's shoes and ask two questions: Why do I need this product? How can it help me? Answering these questions will help to understand the main goal of the product and find the best solution for satisfying future customers' needs.

Step #2. Define the target audience and narrow it down

Trying to satisfy the widest group of people is a mistake. Choose a certain audience you want to offer your product to. Create a full description of a person who is not only going to like your product but also buy it without hesitation. Learn how old and how educated this person is, what he or she does for a living, and what earning level this job brings him or her. Habits and hobbies will complete a description of a potential customer.

The knowledge about the customer's lifestyle allows you to find out if your future product aligns with the exact problem he or she faces.

Step #3. Evaluate your competitors

Don't overestimate the exclusiveness of your product, especially when you know there are other companies within your industry. Evaluate your competitors. Find out their strong and weak points to define the functionality of your future product.

Define your competitors. Analyze who your top three rivals are, how long they have been in the market, what products or services they offer. Define their strong and weak points, research whether they have a competitive advantage, and estimate your ability to offer something better.

Find their market share. Research their past and current strategies, sales volume, revenues, financial, and marketing objectives. This data will help to understand how profitable and successful they are.
Use primary and secondary sources of information. The information companies share about themselves is the most reliable, primary source for analysis. Visit their websites to read presentations, white papers, annual reports, blogs, and other publications. Secondary sources of information, such as magazine and newspaper articles, videos, survey reports, and books, represent public opinion about the players. Although these sources might be less reliable than primary ones, they can give you a bigger picture of the industry.

Dig deeper. Visit business events competitors take part in, contact their former employer and, of course, use their product and analyze the feedback on it.

Step #4. Map out the User Flow

It is important to design your mobile product with users in mind. A good way to ensure that your users will have a good experience with the first iteration of your app is by mapping out user journeys. This step will allow you to look at your product from the perspective of the user, beginning with opening the app to reaching an end goal, such as making a purchase. User flow creation provides insight into how to design the app in a way that is convenient for users.

Step #5. List features and Prioritize Them

At this stage, you will be able to understand what features to include in your MVP, as well as features to include on your product roadmap that are of a lower priority. Asking the question of what does my user want vs. what does my user need, can help identify and prioritize features. Implementing too many user-requested features too soon can harm the user experience and take away from the overall purpose of the product. The only features to include should be connected to your product's overall goal.

You might highlight all the features you think are 'nice-to-have', but not strictly necessary. When you have a list of features for each stage, you then need to prioritize them. To prioritize features, do the following:

Ask yourself: What is the single most important action that I want my users to accomplish? (Note: this will be your main feature);

Ask yourself: What other features do I want to offer? (Explain why you need each of these features, then cross out the least important ones.)

Now categorize all the remaining features under the categories 'must-have,' 'nice-to-have', and 'don't care.'

Once you've added all the stages and features for each stage, draw a downward vertical arrow going from 'high priority' at the top of the column to 'low priority' at the bottom and prioritize your features.

After prioritization, define their scope for the first version of the product and move to choosing the best-fit management method for building an MVP.

Step #6. Choose the best project management method for building an MVP

With a defined scope of work, start developing the minimum viable product. Now let's find out what project management methods apply to building an MVP.

Lean. Lean is one of the Agile software development methods that is based on several core principles: eliminate waste, deliver as fast as possible, and build integrity. Practically, Lean applies iterative development with the build-measure-learn approach. With Lean, developers can delay most of the design decisions, set a rapid feedback loop, and make sure they build a product that customers need.

If you want to learn more about Lean Startup Approach, follow the link "How not to become a product waiter: The Lean Startup Approach".

Scrum. Scrum is an iterative approach to software development that relies on the division of work scope and helps teams deliver faster. Scrum allows to manage the development of features for MVP in sprints (short cycles about two and four weeks long) and hire a scrum master who will oversee keeping the whole Scrum process running. MVP may be released after the first sprint, and the development team can update the product according to users' feedback in all subsequent sprints.

Still thinking whether to scrum or not. Perhaps our article will help you to make a decision.

Kanban. Kanban focuses on the work-in-progress model and suggests focusing on tasks as they appear. This allows for aligning the scope of work with team capacity. Engineers can continuously add tasks to a pipeline as they get feedback from users. Kanban may be applied after the first version of MVP is released. It will be a powerful method if feedback is ongoing.

Step #7. Build, Test, and Learn

When all the data is gathered, start building an MVP, then QA engineers test it and if everything works and a minimal viable product is ready, time comes for alpha or beta testing.

Alpha testing can also be called a Friends & Family release, as you generally give an alpha build of your product only to a limited focus group, in most cases to friends and relatives. You may conduct alpha testing first and then move to beta one, or may proceed directly to beta testing. As soon as the product passes alpha testing it's ready for beta testing. When we talk about beta testing, we mean that the product is going out into the real world to be tested by real users. The beta testing period varies, but it usually takes 1–2 weeks to get sufficient feedback. Based on feedback from beta testing, you may consider implementing changes in the following versions of your product.

Users are the only people who can define what features your product lacks and what features aren't needed. After collecting user feedback, start improving your product again and then test, and learn, and build again, and test again, and learn again.
HAVE A GREAT IDEA OF AN MVP?

HOW TO MEASURE MVP SUCCESS?

There are several things necessary to take into consideration when measuring the success of an MVP. The analysis of product success can tell the future scope of the product and how it would turn out in the coming times. Here are some of the most effective ways to follow while measuring MVP success.

Active Users

You can know the success of your MVP by checking the daily monthly users and monthly active users. Check if your average active user metric is going up or down. This can tell you if your MVP is engaging the users or simply turning them away.

Sign-Ups

This is yet another factor you can check to measure the success of your MVP is the number of sign-ups it can offer. The more sign-ups, the better your minimum viable product is performing among the users.

Customer Acquisition Cost

This is the amount you spend on acquiring a single customer. You can calculate it by using the formula - money spent on lead generation / number of customers. This will tell you exactly how much you are spending on acquiring a single customer. If the revenue generated per user is lesser than the customer acquisition cost, the MVP is not profitable and you need to implement your revenue strategy or traction channels. But if it is vice versa, you can sit back and enjoy it.

BENEFITS OF BUILDING AN MVP

Opportunity to find investors and raise funding

An MVP can showcase the seeds of what is expected to become a genuinely new and exciting product. And the audience will be not only a founding team but also potential investors. If done correctly, an MVP must show a product to good advantage and display its strengths to attract and convince people to invest their money.

Lower cost

Due to the focus on keeping the product to a "minimum", there is cost reduction in the development process. This is because the product is focused on a few core features to solve a problem, therefore limiting the amount of time needed for the app build. MVP also helps to prevent it from becoming overly complicated and requiring more sophisticated coding and solutions. By keeping the product and project simple, you can keep costs low.

Learn what your customers want

Being able to access validated learning in the shortest time possible is a great benefit of the MVP method.

It stops you from spending huge amounts of time and money developing a perfect end product you THINK people want, to instead produce a product you KNOW they want. By developing the minimum viable product and releasing it to the market in a short time, you can gain valuable feedback from your early users. This feedback can help you plan and prioritize what you can change about your product or business to become truly valuable for them, and what they want. This means if you decide to develop your product further, you know the market for it already exists.

SUCCESSFUL BUSINESSES THAT STARTED AS MVPS

Instagram

Initially, the MVP was focused on photo filters only. Users could take pictures, apply one of the suggested filters, and save their photos in an album on their device. Users liked the application. It has since been updated to include videos, geolocation, tagging, hashtags, and integration with other social networks.

Amazon

Jeff Bezos made a list of products that could be sold online at the time. His very first list included 20 categories. Later, he selected only five: books, CDs, videos, computer hardware, and software. He launched a simple website with a catalog of books. Once a customer ordered a book, Bezos bought it from a distributor and shipped it. Over the years, the website scaled and grew. Today, Amazon offers many more products and is one of the world's largest retailers.

Spotify

In the early 2000s, when media piracy sites like Napster and The Pirate Bay were all over the internet, it seemed impossible to survive with a new music streaming platform. But when Napster shut down, Daniel Ek 一 the co-founder of Spotify decided to develop a new platform where users could get legal music instantly for a small fee. Daniel Ek and Martin Lorentzon built a minimal viable product that did just one thing: streaming music. The first to try this application were family and friends. When Daniel and Martin saw their idea was a hit, they presented the application to a larger audience. Later on, when Spotify was accepted by users, they signed more artists and expanded to more countries. Today, Spotify is an on-demand service for music, podcasts, and video streaming that's available in 178 countries and has millions of subscribers.

SUMMARY

MVP is a crucial part of software product development. Due to the customer feedback, MVP allows managers to understand what features their customers need, what should be added, and what should be excluded. MVP development brings a bunch of benefits: from cost reduction to a great opportunity of finding investors and and creating a product of your dreams.
DO YOU HAVE ANY QUESTIONS?