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HomeBlogProject ManagementMinimum Viable Product (MVP): Definition, Examples, Template
Products are successful primarily because they help customers and users derive specific value from their use or solve some of their pain. Unfortunately, while a lot of ideas sound great, 95% of the products fail. As entrepreneurs or product managers, you want to ensure that your ideas are worth pursuing from a business standpoint before you invest significant resources and time in developing a product. Minimum Viable Product (MVP) is a tool that lets you validate your product assumptions and the desirability of your ideas with actual customers.
In this article, we will understand what an MVP is, why it is essential, how to approach MVP development, and what kind of lessons you can derive from a successful MVP effort. We will also see examples of MVPs that resulted in great products and businesses.
Your product idea may involve multiple features you envisage in the final product. For example, you want to build a Customer Relationship Management (CRM) application with advanced automated lead management capabilities. You create a feature list that includes customer service, social media management, and integrations with other peripheral tools such as your product roadmap and the automated lead management features. Developing all the features will take time and money, even before you can understand whether there is indeed a need for automated lead management and whether it would work in a real-life scenario.
One option is to develop only the automated lead management portion, since it is your core value proposition, in a way that makes the products usable practically, yet is devoid of any additional features. This subset of your final product is your MVP, Minimal Viable Product. Understanding the meaning of MVP will help you build a valuable yet minimal version of your product.
We can define MVP as the essential product version you can still launch. It will typically contain features and functions critical to quickly and inexpensively test whether there is a need for the product or not. MVPs are also used to determine which features the customer may value and which they might not.
MVP is a valuable technique to ensure you get clear ideas about how best to build the product. Now that we have understood the MVP definition, let's look at how the MVP serves the following three significant objectives;
History is replete with anecdotes of high-profile product launches that eventually failed because they didn't add significant value to the customers and users. When a product fails, it results in the loss of effort and money invested, and the organizations incur opportunity costs. Based on the response to your MVP product, you can determine whether there is a need for the product you want to develop. When you pursue project management training, including Project Management online certification, you can learn many tools and techniques to understand user needs.
part from ensuring the need and demand, the MVPs also help you ensure that you can understand user behavior and the gap between what your product offers. MVPs are used to make data-driven decisions on product features and user experience.
A thesis is your vision for your product. What exactly do you want to achieve with the product, and what would that future look like? MVP allows you to see if the impact you want to create with the product is possible.
While an MVP is minimal, it still needs to be valuable. It is a subset of the final product you may have planned, but it still needs to give the users a complete sense of the value proposition. From that perspective, a successful MVP goes through all the regular product development steps. A great place to learn such development methodologies is to pursue the cheapest PMP certification courses online.
You must understand the market and the viability aspects of your product idea even before you launch your MVP. MVP’s meaning in business is to ensure that you can get paying customers for your product beforehand. There are three steps involved in identifying the market needs.
A. Long-term Goal
While you may launch an initial, limited version of your product as an MVP, ensuring a clear long-term goal for your product's success is still critical. The goal should be based on the market needs you identified and the realistic and achievable. A clear long-term goal is essential to define the MVP success criteria and the features you should include in your MVP.
B. Success Criteria
While every MVP is intended to gauge the customer and user reactions to the product and features, you might have specific criteria to determine whether the MVP is successful. For example, it can be user acquisition or the extent of system usage, but having clearly defined and time-bound success criteria will help you calibrate your efforts.
Many teams make the mistake of focusing on the features independently, even during the MVP. While you must decide on the features, those features should support a specific user outcome you want to validate through the MVP. An example would be the flow from the search to purchase for an eCommerce application.
Once you have mapped out the overall journey, you should also optimize it to develop the MVP in a way that offers the least friction for your MVP users.
A Pain and Gain Map is a product discovery tool that you can use to chart out the product value by understanding the pains of the potential users that you should solve and their gains (benefits they get) by using your product. Building these maps will help you decide the features that impact the most significant pain and gain areas.
Now that you have understood the market and have a fair idea about the problem you want to solve for your users, you will need to decide the feature you want to validate through the MVP. These features must support the success criteria and be necessary to achieve those.
Once the features are decided, the teams build and release the MVP to the market. You can either do a soft launch, releasing the product to a targeted group of customers or a bigger launch to anyone who can find it.
The purpose of the MVP is to obtain feedback from your users. Eric Ries popularized the Build, Measure, Learn loop in his book "The Lean Startup." As your users start utilizing the system, you must implement the mechanism to collect feedback and capture their behavior and user journey. Comparing these data points against your success criteria and KPIs will allow you to learn the areas where you can improve.
You can master all these techniques through many online courses. KnowledgeHut is also one of the best PMP and PRINCE2 training providers and you can use available training programs to understand the best project and product management approaches.
While you may have a great idea with abundant potential, you must still avoid a few typical mistakes while building your MVP software. MVPs are your first impression for your customers and users. If you don't get it right, your business may suffer setbacks despite a great idea.
Prototypes serve two purposes; first, they let you determine the feasibility of your solution, that you will indeed be able to make it and gives you a fair idea of what it will take to build the product and how it will behave after it is constructed entirely. If you skip this early validation, you may encounter issues during the MVP building, and the outcome may be different from what you expect and need.
While you may have identified a problem in the market, it is essential to validate if it is a problem that needs solving. People might not express their need for the solution, but you can still identify the underlying user issues and ensure that your product solves those. If your MVP does not solve any of your user's problems, getting people to use it and obtain meaningful feedback will be challenging. However, if you have taken steps to analyze the market needs and created a pain and gain map, you can work on the right problem with the right solution approach. KnowledgeHut's Project Management online certification can help you understand the best approaches to decide on how to work with teams and stakeholders to define the optimal strategy to identify right problems and solutions.
Your MVP (and subsequently the product) can't focus on solving every problem for everyone. If you lack the focus, then you will end up building a lot of features that very few customers use. Not focusing on a specific customer segment may give you incorrect feedback and signals that add no value to your product development journey. It may take you in the wrong direction altogether.
How you develop your MVP is as critical as deciding what feature you include. For all practical purposes, an MVP is a product. Hence, you should also adopt all good product development practices for MVP development.
Iterative and Incremental approaches suit the MVP well, as it provides a way to collect implicit and explicit feedback from each activity, their output and from the internal teams.
When you want to understand whether your product works for your customers, you need to understand their responsibilities and why the response is that way. That's why you must collect qualitative and quantitative feedback and use the right mix to make the correct inferences.
With Quantitative feedback, you collect numerical data. The collection may occur through surveys, questionnaires, or other standardized methods, including analytics tools. Quantitative feedback allows you to gather statistical information about the product, such as customer satisfaction ratings, usage statistics, or sales figures. Then, you can analyze the data to gather insights into patterns and trends and identify areas of improvement.
On the other hand, Qualitative feedback gathers more subjective, open-ended information through methods such as interviews, focus groups, or user testing. Qualitative feedback is helpful for better understanding customer perceptions, preferences, and behaviors. It can provide more detailed insights into the user experience and help identify specific pain points or areas for improvement.
The feedback you gather from the MVP will influence how you build your product in the future. Let's see some of the significant indicators of MVP success.
Referrals are the best marketing method. It also means that your users find your product so valuable as to recommend it to others. Therefore, it is one of the best measures of the success of the MVP.
The second essential metric is the extent of users' engagement with your product. It includes the time they spend using your MVP. The higher engagement indicates that they find it valuable and may soon form the habit loop that makes your MVP and the product a regular part of their usage.
If your users like your MVP, it will show in the reviews and appraisals they leave. Therefore, make it easy for them to rate and review your MVP and leave testimonials. Social proof is a significant measure of success and promotes the product and the MVP to other users.
Sign-ups show that not only are people discovering your project, but your initial message and value proposition attract them to try out your MVP. While the number of sign-ups alone is also significant, comparing discovery (or impressions of your product) and actual sign-ups is more critical to understanding your conversion rate.
Client Acquisition Cost (CAC) is one of the most critical metrics that show whether you have a commercially viable and marketable product and where you can improve to save the cost of attracting people towards your product, thus reducing the CAC.
You have created the MVP, and users have signed up. But if they leave the product after sign-ups and initial use, it would indicate that there is a scope and need for immediate improvement. Churn Rate is the metric that tells you how many users stop using your MVP from the total number of users in a given period. So, along with CAC, Churn Rate is another critical metric to track.
Utilizing MVP to gauge the market need and validity of your idea and solution is a powerful strategy. However, if you are not convinced, let's see some minimum viable product examples of today's successful companies and how they leveraged the power of MVPs to launch their products and services.
What started as an idea to earn money to pay rent, Airbnb was launched with a straightforward webpage with bare minimum functionality to rent out the founders' apartment to attendees of a design conference in San Francisco, California.
Instagram is an example of how MVP feedback can help you decide on the right action and enable you to pivot successfully. What started as Burbn, a location check-in app like foursquare, changed the directions to a photo-sharing app with filters. Then, the founders made the photo-sharing feature their users liked the most into the product's core value proposition and rebranded it as Instagram.
Amazon's story started as an online, cost-effective marketplace for books. It has now become the most successful eCommerce company in the world. It also became one of the leading technology companies by utilizing the technical infrastructure that powers its marketplace as the cloud platform that others can subscribe to and use.
Here's a template for a Minimum Viable Product (MVP):
MVP: Build A Solid Product Foundation Through Customer Feedback
A Minimum Viable Product meaning MVP, is a strategy entrepreneurs and businesses use to validate their ideas and gain early customer feedback. The essential product version can still be launched and sold in the market but only includes essential features and functions, thus reducing waste An MVP aims to quickly and inexpensively test whether or not there is a demand for the product and, if so, what features and functionality customers value most. You can use the feedback received from early adopters to refine and improve the product before investing more resources into development.
A successful MVP has three key elements;
Many people ask, is MVP agile concept? It is possible to create an MVP even when you are not using Agile methodologies. However, as Agile follows an iterative and incremental product development model, it aims to provide a valuable product improvement at fixed timeframes, known as timeboxes. Therefore, each such increment can be considered an MVP in agile.
MVE, or Minimum Viable Experience, is a broader concept focusing on the user journey, overall customer experience, product perceptions and feelings, whereas the MVP focuses on features. An MVP focuses on testing demand for the product and refining its features, while an MVE focuses on developing a positive user experience and improving the customer journey.
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