Minimum Viable Product: Definition, Importance, and Examples
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A minimum viable product (MVP) is the version of a product that allows customers to use it and offer feedback about the product. Companies use an MVP to test their products early in the creation process to determine if they're a possible solution to a marketplace need. Understanding MVPs can help you attract investors and develop an interest in the product.
In this article, we define what an MVP is, explore its different types, analyze why MVPs are important, discuss how to design your MVP, compare it to MMP, review alternatives to MVP and MMP, identify tips for creating an MVP, and examine MVP examples.
What is a minimum viable product?
A minimum viable product is a product in its first form of the product life cycle. The business provides the product with adequate features to entice customers and includes the essential functions. The goal is to try to determine whether a business model is feasible and how to reduce the time a business spends in its product development phases.
It also provides companies with the opportunity to test their products at a low cost while using minimal resources. When the business receives feedback on its MVP, it can apply the information and make the changes to improve the product.
Here's a list of the parts included in an MVP:
Value proposition: The new product provides a solution to a need and benefits its users.
Customer segments: MVPs have a particular target audience that reviews the value of this new product.
Channel: When executing their MVPs, businesses use a system to reach their target audience to get reviews of their product.
Customer relationships: The business preserves communication with customers to determine the effectiveness of their product.
Types of MVPs
The type of MVP a business chooses depends on the information they want to learn from the customers. There are eight different types of MVPs, including:
Software prototypes: Software prototypes are a type of MVP where developers create software with only the essential functionalities.
Product designs: Product designs are a type of MVP where businesses often use different product designs like sketches or mockups to display how their product works.
Demo videos: Demo videos are a type of MVP that explains what the product does for its customers and helps the business determine if the product interests others. It can also help determine if the product provides a solution to a need.
Wizard of Oz: Wizard of Oz is a type of MVP that's also called manual-first. This is when a business acts as if the product already exists, irrespective of the product being in the development stage.
Piecemeal: Piecemeal is a type of MVP that utilizes existing services and tools in a project to offer customers a new experience or functionality.
Concierge: Concierge is a type of MVP where businesses develop a customer base by manually choosing products for each individual before creating a digital product that determines what to send.
Crowdfunding: Crowdfunding is a type of MVP which involves a campaign where businesses raise money through donations. They achieve this by providing rewards like access to new products in exchange for these donations.
Landing pages: Landing pages are a type of MVP that allows businesses to announce new products to determine how many customers are interested in them. They achieve this by collecting email addresses for updates.
Why is an MVP important?
An MVP is important because it allows a business to collect an adequate amount of validated information about their customers' perspectives with the least amount of effort. This process includes customer reviews that can help a business see what interests its customers before completing the development process of the product. Some other benefits of developing an MVP include:
Ability to entice investors with early traction
Ability to use resources more effectively
Increased time to plan an efficient strategy
Ability to maintain consistent consumers
Ability to minimize risks
How to create your MVP
Here's a list of steps to follow in creating your minimum viable product:
1. Align with the business objectives
It's important for businesses to ensure they focus on aligning the MVP with the business' objectives while developing it. This step is generally where the business determines the primary purpose of the MVP and identifies which type to use. An example is an eco-friendly storage container company that decides they want to use recycled materials in their production.
2. Find specific needs for your product to solve
Businesses can identify the solution or value proposition they want to provide customers. For example, a storage container company may want to provide its customers with a creative way to sort their items. There are different aspects it can consider when determining a solution, including:
User journey map
Ability to repeat specific functions
3. Build an action plan for development
After determining the scope of the product, the business can figure out what features it wants to develop. This step involves writing an action plan, making sure the product is feasible, and ensuring it offers customers the outcomes they want. During this stage, the company typically creates a fully working product. For example, a storage container company builds a working model to show the public what their containers do and how they can provide value.
Difference between MVP and MMP
The minimal marketable product (MMP) is similar to an MVP in that it also helps businesses launch their new products while reducing their time in the product development cycle, but the two terms also differ. An MMP is a finished product ready for release. The MMP occurs after the MVP and once the business establishes its specific market. Companies use the MVP when testing the product's viability, but use the MMP when selling the product.
Alternatives to MVP and MMP
There are alternatives to MVP and MMP, which include the following:
Minimum lovable product (MLP)
This alternative follows the belief that MVPs can annoy a customer and make them look for alternative solutions. Businesses that use the MLP approach create a product with adequate functionality to enable customers to love the product immediately without tolerating the initial prototype. The MLP has the disadvantage of increasing the development costs, but it provides the customers with a convenient and attractive product.
Risk assumption test
This approach addresses different uncertainties that come with the MVP approach, like what hypothesis a business can test, the assumptions business can explore, and how minimal the MVP can be. This approach helps a business determine its most significant uncertainty and ways to mitigate the issues. As a result, the business often builds a prototype that meets the answer to their most significant uncertainty or hypothesis.
Tips for creating your MVPs
You can apply the following tips to help you build MVPs:
prioritize the essential features to make a working product and list the functions that can wait for a later release
research your competitors to determine how you can separate yourself from them and explore the unique features or designs for your product to demonstrate your value in the market
try to ensure your MVP is simple enough to gather reviews from the customers because it rarely matters if the product is perfect at this stage
The following are some examples of where a company may use an MVP:
Example of an MVP for a security company
Here's an example of how a security company might be an MVP in their processes:
An office security company, OSC, develops a demo video that shows potential customers the benefits of their security systems. Afterward, OSC asks their viewers to provide feedback about what additional features and tools they may like to see in their office security system. OSC makes it known that the feedback may help create the end product. Once OSC collects all the reviews, the company can adjust their product and improve its functionality.
Example of using an MVP in an event company
Here's an example of an event company and how they might use an MVP:
Cheap and Affordable Events (C&AE) searches the internet for local deals on entertainment services. They build a piecemeal MVP that promotes services in the community and shares limited-time deals. C&AE then uses their existing tools to provide customers with a new experience that compiles events essential to them, helping them save money. If C&AE determines that the public likes their product based on the feedback they receive, they can launch a more extensive website that includes events for other areas.
Example of a plant shop using an MVP
Here's an example of the use of an MVP for a plant shop:
APS plant shop uses the Wizard of Oz MVP approach on its website. APS posts photos of exotic plants they want to sell. Once customers add the plants to their shopping cart, APS orders them. This MVP helps APS test the market to determine if there's an interest in their rare plants before buying them in large quantities.
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