WTF Is A Minimum Viable Product (MVP)?

What is minimum viable product?

While the term “minimum viable product” (MVP) is thrown out a lot in the startup world, it’s one of those terms that can mean different things to different people. So, at Startups.com, we turn to two tech visionaries for their definitions:

“An MVP is a concise summary of the smallest possible group of features that will work as a stand-alone product while still solving at least the “core” problem and demonstrating the product’s value.” -Steve Blank

“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.” - Eric Ries

“In other words, an MVP is a minimalist, well-functioning version of your product that solves an accurate need in the market,” growth strategist Nada Allouch writes. “It should give your early adopters a quick glimpse of the experience your final product offers. And additionally, you should be able to test it, measure it, and iterate on it, without spending a fortune.”

A good example of an MVP is a “smoke test site,” which can be used to validate interest in your product or service while offering a low barrier to entry.

A smoke test site is one that is just a facade. It looks like it’s a real service, but it’s really just a flat site with no back-end, nothing built out, and no real actions. They can be used easily to track and estimate demand for your business idea, and to help gather contact information for people who may be interested. The point of this site is to see if anyone tries to buy.

While the MVP is often extremely minimalistic, the feedback from the initial group of test customers helps entrepreneurs learn what’s working, understand what isn’t, and figure out what direction they should go.

Why do companies need a minimum viable product?

In her Startups.com article “5 Ways Your MVP Can Help Your Early-Stage Startup Succeed,” Allouch outlines the reasons companies should create an MVP.

One of the core principles of the startup business model is the user-centered lens. If you don’t understand your user — you’re gonna have a bad time. Product Development should go hand-in-hand with Customer Development. They’re equally crucial to your success and ignoring one in favor of the other is a sure sign of failure.

“The Customer Development model is not a replacement for the Product Development model, but a companion.”
– Steve Blank

Lucky you! Your MVP was literally made for this exact purpose. When testing your product — not only will you learn what your product is missing — you’re keenly positioned to gain a deeper understanding of what your users want and whether your product aligns well with the market demand… before it’s too late.

Use your MVP to collect user feedback and ultimately either validate your core value proposition, adjust your revenue model, or segment your audience. All of which is crucial before you invest all of your resources in your product.

1. It helps you know your customers better.

One of the core principles of the startup business model is the user-centered lens. If you don’t understand your user — you’re gonna have a bad time. Product Development should go hand-in-hand with Customer Development. They’re equally crucial to your success and ignoring one in favor of the other is a sure sign of failure.

“The Customer Development model is not a replacement for the Product Development model, but a companion.”
– Steve Blank

Lucky you! Your MVP was literally made for this exact purpose. When testing your product — not only will you learn what your product is missing — you’re keenly positioned to gain a deeper understanding of what your users want and whether your product aligns well with the market demand… before it’s too late.

Use your MVP to collect user feedback and ultimately either validate your core value proposition, adjust your revenue model, or segment your audience. All of which is crucial before you invest all of your resources in your product.

2. It helps you focus on your core hypothesis.

Lean Startup Methodology established that products are essentially a bunch of untested hypotheses that have yet to be confirmed by the market.

As a founder, you probably have a long list of ideas and theories on what exactly you want your product to be. However — once you reach the MVP stage — you’re bound to narrow your focus to one or two core ideas for what your product will become.

When Nodar Janashia, Founder and CEO of CountUp.io, saw a gap in the market between startup founders and accounting specialists — he worked alongside the CTO-as-a-service startup, Hidden Founders, to build a platform to connect the two.

Nodar based his hypothesis for CountUp.io upon two assumptions:

• Startups want and need to connect with a vetted accountant
• An online platform is the optimal solution to the problem
• In order to build an optimal MVP — the platform was reduced to two basic elements: a way to match a founder to the right accountant and an instant messaging feature to support their communication.

These two elements enabled CountUp.io to be minimally viable and operational so the two hypotheses could be tested. It is important to cut out anything superfluous to ensure you collect data that can prove or disprove your hypothesis.

3. It helps you save money and time.

Your MVP should prevent you from sinking before you even dip a toe into the water. The fewer features your MVP has, the less money you’ll undoubtedly spend and the less time you’ll end up wasting.

If you feel that you need to add any additional features — take a breath and back that feeling up with some cold, hard data. Time you spend adding extra features will push your launch date back — and often become a distraction from the more important pieces of your product.

4. It helps you avoid the “perfect business plan” fallacy.

Business plans rarely survive first contact with customers. Rather than engaging in months of planning and research — the most successful founders accept that what they have on ‘Day One’ is simply a series of untested hypotheses. There’s no actual book that will take you step-by-step through building your MVP.

Therefore, you’ll never have a clear chart of “include/not include” elements. Sorry, Charlie! You’ll have to figure that out on your own. You can start doing that by organizing your features in two categories: “Must Have” and “Nice To Have“.

5. It saves you from feature pile-on.

Selecting your products features is tricky. Using the earlier example with CountUp.io — after adding both the matching system and the instant messaging feature, it was discovered that there was a need for conflict management as the two parties involved in the transaction could become involved in a disagreement.

As a third and final linking part, the CountUp.io team created a conflict management process to aid in resolving conflict between users.

Rather than automating this process, the team determined that it would be best for the user experience to manually resolve any issues. This new process is triggered by the newly created “signal a problem” button that empowered users to inform the CountUp.io team of any issues.

Doing this process manually saved Nodar a lot of time and money that could have been wasted developing an automated complaint management system.

Automation should only be used when you’re dealing with tons of data — and the number of complaints received at that stage by CountUp.io was totally manageable, manually.

When you get to this stage — congrats! You’ve built what is considered a Concierge MVP. This is basically an MVP that “feels” like the real product to your user — and yet, several of the functions might be completed manually.

How do you know you’re ready to create an MVP?

Before building an MVP, you have to confirm that you’re building something people really want. One great way to do that is through “coffee shop testing.” You build a slide of the homepage and the main screen used by registered users; sit in a coffee shop, and buy coffee for anyone who will give you 15 minutes. Show them the two slides and listen; don't explain. Only ask:

• What is this website for?
• Would you sign up for it? Why?
• Would you tell your friends? Why?
• What would you pay for it?

Don't explain anything. If you have to explain something, verbally, you aren't ready to build your MVP. Potential customers don't get it.

Keep working with that slide alone until you get enough people who say they will sign up and know, roughly, what people will pay. Then build your MVP and introduce it first to friends, family, and peers, to get your earliest adopters.