Every product starts as an idea, which is the kickoff for great projects. However, as important as having an idea is executing it efficiently. This way, when an entrepreneur has an innovative product or service, in order to guarantee it is really viable and efficient, a good solution is to use a Minimum Viable Product (MVP).
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What is and how the term MVP came about?
MPV is an acronym for Minimum Viable Product, which simply is a way of developing and testing initial ideas of a product or service. In short, this method tests the acceptance of the product or service even before it is launched.
The term MVP was coined by businessman and entrepreneur Frank Robinson, CEO of SyncDev Inc., a North American company active in the development of new products and markets.
This concept was popularized in the book “The Lean Startup”, by the author and entrepreneur Eric Ries, which became a worldwide bestseller, and gave the Minimum Viable Product the characteristics currently used, mainly among startups.
“When I first said “minimum viable product”, I never had to repeat myself”, reports Frank Robinson.
What is the MVP in practice?
In practice, the MVP is a lean version of the product or service, built on top of its essential features, being presented to users so that, based on their experience of use, errors are corrected and improvements are proposed.
This way, the final product is built gradually, using as few resources as possible to deliver the main value proposition of the idea. Thus, it is possible to validate the product before its launch, thereby avoiding investing a lot of time and money in its development beyond what is necessary.
The launch itself only occurs after the test version has been developed and improved, which certainly increases the chances of success and acceptance in the market.
However, many get confused about the concept of Minimum Viable Product, having the wrong assumption when thinking that the idea means building the product by its parts. In this way, they forget that the Minimum Viable Product is an initial solution to the client’s main problem.
The image below clearly explains this difference:
That is, it is not a question of assembling the product in parts, but adding functions and features according to the needs of your target audience. However, the first version already needs to meet your customer’s main need.
Just to get a sense of the importance of using the MVP, corporate giants such as Facebook, Amazon, Instagram, Dropbox, Twitter, Spotify, among many others, launched their prototypes in the Minimum Viable Product concept.
The MVP concept is currently widely used by companies in the field of innovation and by startups, especially those related to information technology.
What are the types of MVP?
Despite starting from the same conception, the Minimum Viable Product can present itself in different modalities, because it is defined according to the needs of the company or the entrepreneur.
When choosing the type of Minimum Viable Product to be used, it is necessary to take into account the characteristics of the product and the budget.
There are some details about the most popular ones below.
This modality is more suitable for software and complex features, as the prototype is a functional example of the solution, that is, an example that is made available to a select audience. Based on this use, you evaluate functionality, popularity and other aspects to validate the product.
However, it is a more expensive model, due to it being more complete and looking like the final product.
It is a modality based on A/B tests, which are those in which two versions of a solution are offered simultaneously to compare which one is more effective.
The A/B testing is the most expensive on the list, as it requires even more investment, since it implies the creation of two different versions. However, it is an excellent tool for customizations and validation of a relevant product feature.
Wizard of Oz MVP
The name might be funny, but it refers to the delivery of the solution, which is initially done manually by people working behind the curtains, without having their features programmed and automated.
In this case, instead of offering an automated version, real people have the role of the machines.
Simplifying, take EasyTaxi as an example. Customers requested a taxi through the app’s prototype and those responsible for the innovation manually called drivers to pick up passengers.
When carrying out the processes manually, it is possible to identify not only the interest of the public, but also problems in the solution.
This modality got its name for offering a highly personalized solution to a group of consumers, making the product available and following its use more closely, evaluating functionality and popularity.
It has the purpose of reinforcing the idea of an exclusive service that, later, should also be accentuated by automation.
This modality is an alternative when you have a tight budget, Piecemeal focuses on experimentation through free platforms that already exist.
A company that is considering launching a differentiated cloud storage service, for example, can create an Minimum Viable Product from Google Drive, adding some amenities to its customers.
This modality requires the delivery of a version that has only its function.
Those who idealize very clearly what the main functionality of their solution to be developed is can benefit from this type of Minimum Viable Product.
If the function is approved, the other mechanisms can be added and tested little by little, optimizing the necessary investments.
This modality is a digital way of assessing the relevance of your product to potential customers, in addition to being quick and very practical to carry out.
For that, those responsible only need a marketing channel to distribute it, it is a way to present the solution to the potential public.
A good way to make this smoke is with a landing page that talks about the solution and shows a video presenting its concepts and, if possible, how it works.
Thus, interest can be measured based on the conversion rate of the page, while data is collected to obtain more knowledge of the public, who will receive news over time and the advantage of having the product or service at first hand.
Then, based on the obtained answers, valuable feedbacks can be extracted, which will help to develop new features or withdraw them, if necessary.
How to create and test an Minimum Viable Product?
The build-measure-learn feedback loop doesn’t just determine the problem that needs solutions.
It also includes creating a minimum viable product to kick off the learning experience as soon as needed.
Once the MVP is built, you can focus on improving the product. This will involve measuring and learning, as well as actionable metrics that can illustrate the cause-and-effect concern.
Minimum Viable Product types interfere in the creation and testing process, as there are different types as we saw earlier.
There are some steps that can be useful for different modalities.
Following below, we bring you a step-by-step guide based on the advice of Thought Works consultant and author of the book “To the Point”, Paulo Caroli.
Step 1: Assemble a Team
Even when the idea is yours, you need to have different types of insights for it to become a reality, the ideal is to bring together at least three people:
- Someone with business acumen, to assess financial viability;
- Someone who thinks about how the product will be used (preferably with design thinking knowledge);
- Someone who can envision the engineering of the product or service, including its large-scale offering.
Step 2: Establish your solution
A simple way of doing that is completing the gaps in the sentence:
Target at ________, the ________ is ___________ which _________, different from _________.
- The first gap corresponds to the target audience;
- The second, the name given to the solution (it can be temporary);
- The third must be completed with the definition of the solution, whether it is a product or service, whether it is a platform, piece of clothing, electronics, etc.;
- The fourth talks about the main advantage;
- And the fifth, what is the differential in relation to the competition.
Step 3: Create Personas
Looking generally at the market in which your solution is inserted, check by making one or more clippings to extract which niche it serves.
This way, you will have enough information to create one or more personas, which are fictional roles that will represent the ideal customer.
Establish information such as age, profession, where they live, marital status, interests and tastes to bring the target closer to your solution.
By the way, one possibility is to contact individuals who have these characteristics to test your Minimum Viable Product.
Step 4: Remove The Excesses
You must consider the interests of the public and the problem that your product/service will address/solve, and select/elect the essential features.
And they will be the ones who should be part of the Minimum Viable Product.
Step 5: Test And Monitor
After polishing the Minimum Viable Product, it is ready to be released and tested. Choose, among the types that we presented earlier, the one that best fits your reality and needs.
Don’t forget to establish metrics or KPIs (key performance indicators) to monitor whether the solution was successful or if it needs to be improved.
Step 6: Interpret Audience Feedbacks
MVP is not just a way to mitigate risk. It mainly serves as a thermometer, by which the preferences of the target audience for a solution can be identified.
Therefore, it is necessary to take into account that the consumer does not have ready answers. It is necessary that their feedbacks be reinterpreted, in order to point out new possibilities.
It is necessary to find a balance where public feedback is used more as clues and less as unquestionable directions.
Step 7: Do Benchmarking
Minimum Viable Product is also necessarily a collective creation based on the experience of others. For that reason, the benchmarking strategy is so used in the development of minimum viable products.
Its premise is to use cases of success (or failure) of other companies so, based on that, decisions are taken.
However, it never hurts to remember that benchmarking is not the same thing as plagiarism.
What is sought at this stage is to understand the causes and consequences of decisions taken by others in order not to repeat faulty processes.
By the way, Facebook itself made use of benchmarking to help in its formulation, as in the case of Orkut, which was the largest social network in the world in the first half of the 2000s.
Step 8: Establish Goals
Making money by launching a solution is great, nobody disagrees with that. However, this should not be the goal when the intention is to enter the market with a new product, even more so if it is designed in a disruptive way.
The Minimum Viable Product, as you already know, has its development cycle based not on the interests of the company, but on those of the client.
The fundamental thing is that this process is goal-oriented, and that these goals are related to the desires and needs of the consumer.
A useful method for defining these is SMART goals, whereby objectives should be:
Step 9: Make Continuous Changes
Being a solution in continuous improvement is one of the characteristics of an Minimum Viable Product.
At this stage of its development, the people involved need to be even more demanding, without conforming to the results, no matter how good they are.
Steve Jobs made Apple a benchmark because he was never satisfied, no matter how good the products looked.
You don’t need to be a new Steve Jobs when developing your MVPs, it’s enough that, with each development cycle that ends, you ask yourself “what can be improved?”.
What happens if the MPV identifies the idea as a not good one?
The fundamental idea of the Minimum Viable Product is to present the real essence of a product/service that will solve an existing problem for the customer.
The process of testing the prototype serves to validate the idea, as there is no research designed to find out if there really is a problem to be solved, it is at this point that the validation takes place.
The result of the customers’ evaluation is unpredictable: the Minimum Viable Product can validate the idea, with high approval rates, or not.
If the feedback indicates that the idea is not a good one, the entrepreneur should consider two hypotheses:
- The project really isn’t worth it;
- The public did not understand the essence of what was proposed.
If the Minimum Viable Product claims that the idea does not solve a customer problem, there is nothing to do, as that is the purpose of the testing phase. And so, in this case, little money and time was spent, and the damage will be relatively small.
If the public did not understand the proposition of the idea, the minimum viable product may have been too limited, and in this case, it may be worth reformulating the Minimum Viable Product and trying again.
Cases of successful MVPs
As you will see in the following list, successful companies today have built their MVPs in a variety of ways, suited to each type of business.
Ready to get inspired? Check out some cases of successful MVPs.
As shown in the movie “The Social Network”, Facebook (in the beginning, The Facebook) intended to connect young people from American universities and allow them to exchange messages. This function already existed on other websites, but it got viral because Facebook was simple.
And that was the Minimum Viable Product of the social network! Tested first only with Harvard students, it was possible to see the growth in popularity, and thus the expansion became inevitable.
The first version of Instagram allowed users to share photos with a limited number of filters. Being one more photo app wasn’t ideal at the time, with the market saturated with image editing apps and social media.
The proposition, then, was to combine sharing and editing in one place. With such ease, users began to adopt the network as the main one.
That mindset of creating a space where you can perform multiple actions still permeates the company, and today we see Instagram providing countless features.
In 2007, during the IDSA Conference, which would bring many visitors to the city, two friends from San Francisco decided to “earn a few bucks”.
Foreseeing the hotel’s overbooking problem, they decided to rent rooms to those arriving in town looking for an alternative.
Airbnb’s MVP was a simple platform that offered vacant rooms as an alternative accommodation.
No interactive maps, no options to choose from, no online payments, just a few photos of the location, contacts and address. However, it was enough to get 3 paying customers, raise $240 and have the golden insight.
2009 was the year of change for the company. The creators of the app were noticed by Paul Graham, co-founder of VC and Y Combinator, who invited them to join the startup accelerator.
From that moment on, they redesigned their website, changed the name from Air Bed & Breakfast to the iconic Airbnb, and took a new approach to adding properties from other owners. Changed the whole course of hospitality.
Apple is a regular user of the Minimum Viable Product methodology. A few months ago, it was possible to follow the internet getting filled up with news about the possible prototype of the iPhone 7. In addition to the images shown, which were supposedly leaked by a test user, various accessories and devices have been appearing on some Chinese websites.
Apple fans are always looking forward to news about the company’s MVPs, and this isn’t the first time that Apple has used the Minimum Viable Product to tweak its products. The original iPhone was initially released internally and lacked a number of basic features like searching your contact list by name or copying and pasting.
Groupon is an example of an Minimum Viable Product on how an idea can change on the fly.
The app, called The Point, started out as a platform whose goal was to bring people together in groups so they could do something too big for one person to tackle alone.
It could be anything from a political campaign to a boycott or even a brand. One of the ways people used The Point was crowd buying, when coupons started showing up.
Let’s face it, The Point was a megalomaniac idea, but the Groupon MVP emerged from there.
The service started as a WordPress blog. In order to generate coupons, they used FileMaker, then ran a script to send the PDF of the coupon by email to the people on the sign-up list.
At that point, their goal was to validate the coupon idea, which had worked in parts at The Point, and collect feedback.
The service proved popular, allowing them to build the voucher system and develop the backend of the operation.
Dropbox came from one of the simplest concepts we have today: creating an online storage space for files. But they were the ones who led the way.
Its Minimum Viable Product, made in a very didactic video, showed how simple the cloud concept was – and how it could replace those crazy server architecture solutions.
The video, approximately 3 minutes long, showed how Dropbox worked and what functions it had. Rather than talking about some technical aspects of the product or drawing parallels with competitors, they demonstrated some real use cases.
Their MVP strategy was effective and the number of sign-ups increased 5 times overnight with no real product yet.
Just the experience of watching a video about the product was enough to sell the idea. The idea for Dropbox was born out of the personal experience of Drew Houston, the company’s co-founder and CEO, who was tired of constantly carrying around his external hard drive.
The day he left his gadget at home was the day the first lines of Dropbox code were written.
The idea for Twitter came up in a hackathon produced by the podcast platform Odeo, which at the time was losing customers to the recently launched iTunes. During the hackathon, the idea of creating an internal SMS messenger for employees to talk to each other came up – which became the Minimum Viable Product.
However, it was found that users had to spend a lot of money to post. That’s when the executives saw that this could become the company’s next project and created what was initially called “twittr”.
After some tests, Twitter was launched on July 15, 2006. In the first quarter of 2022, 189.4 million users were registered on the social network. Successful Minimum Viable Product case.
Uber revolutionized the way of getting around, but first it was necessary to test the business model and its platform, it started as Uber Cab and its MVP is the premise of how the ride-sharing app works today.
At first, the service operated only in San Francisco, on a select small group passenger list model, and was operational only on IOS. In addition, the concept revolved around rides in luxury cars, with payment by credit card.
Its founders understood the app’s potential even at the MVP stage, and expanded to other cities and introduced UberX, which connects any passenger to any driver looking for extra income.
This addition to the system revolutionized the transport market. Uber works with the same premise as its MVP, but in a more sophisticated way and with other features.
The app is focused on sending images with an expiration time (24 hours). After the test, the owners noticed the success of the MVP and continued with the project — only after the product was validated and its initial release as an MVP, did they start looking for new features.
Older Snapchat users, by the way, were able to follow part of this evolution of the app and the course of its performance.
Spotify was born with a mission: to build the best music streaming service. For its MVP, it focused on the most important feature: how to make the songs available.
Spotify developed a desktop app and ran a closed beta to test the market. While the Minimum Viable Product and freemium model proved to be exactly what people wanted, the Spotify team spent time signing even more artists while simultaneously developing their app and user experience.
What are the advantages of using Minimum Viable Product?
Avoiding wasting time and money: this is the central idea of the Minimum Viable Product.
Suddenly, the entrepreneur has a “phenomenal” insight, which he considers to be different from anything else on the market, a “guaranteed success”.
In the owner’s mind, it might even be. But will the market buy the idea?
There is a lot of talk about the meteoric growth of some startups, how entrepreneurs, with a simple idea, quit their jobs to make millions.
But there is little or no emphasis on cases of failure.
For every successful idea, several others were discarded because they did not adequately meet the market need.
Companies that operate on the frontier of innovation will inevitably have to deal with trial and error until they hit the target.
But the MVP, as we’ve seen, doesn’t just apply to breakthrough innovations.
Companies in traditional segments can also use the concept to improve their products and services and offer a differentiated experience to their customers.
Check out the main advantages of becoming an MVP below:
Reduces Market Risks
Market risks are those related to factors external to the organization, such as political changes, economic and financial crises, exchange rates, among others.
In certain circumstances, the chances of some products taking off are lower or higher due to market risks.
In consolidated activities, it is easier for the manager to know whether a given product has a chance of success or not.
Some sectors move in fairly well-defined cycles and past behavior helps to understand the present situation and estimate what lies ahead.
When we talk about completely new products or services, this reading becomes more difficult.
Given this fact, the Minimum Viable Product helps to minimize market risks by being able to test the idea before actually making large investments.
Promotes Approximation with Costumers
Many people confuse approximation customers with customer loyalty, but the concepts are not the same.
Loyal customers don’t even consider competitors when they need the products and services offered by your company.
They already know the solutions you offer and, due to the good relationship history, prefer to do business with your company.
Having a loyal customer base is the desire of every organization. After all, it is much easier and more profitable to sell to the same customer than to acquire new ones.
The approximation of customers can be understood as a customer loyalty mechanism.
There are different strategies for this, mainly based on relationship marketing, which aim to create an identification with the brand in the public.
Assuming that the Minimum Viable Product focuses on the customer’s experience, if it is positive, there are also good possibilities for the consumer to create a bond with the company.
Decreases Implementation Costs
The traditional process of developing new products and services usually consists of several steps.
The cycle involves research, internal tests to evaluate technical elements, testing with a specific group, production of a certain quantity for commercial tests, among others.
It is a lengthy and expensive process, which obeys a series of rules and procedures.
If the product doesn’t work, a lot of money and time is wasted.
The goal of the Minimum Viable Product is to skip several steps in the traditional development process and test the idea right away with the lowest possible investment.
So, if customers like it, great. The project is taken forward and the development of the final version follows.
If the feedbacks indicate otherwise, the loss with the minimum viable product was small.
No matter how through the developer is, every project may contain errors in the first versions.
The secret is to identify the failure and solve it efficiently and within the shortest possible time.
The testing phase of an Minimum Viable Product is also intended to check for errors and correct them before moving on to the next phase: the actual development of the product.
Identifying errors is part of the process of learning, executing, measuring and adjusting the Minimum Viable Product.
With the collaboration of the client, the entrepreneur achieves efficiency gains in creating the best experiences for the user.
Helps in Validating Hypotheses
Imagine if Zuckerberg and his team of young developers hadn’t tested Facemash, bringing it to the market right away.
It is not difficult to conclude that the idea would fail and Facebook, as we know it, would never exist.
Before its launch, product hypotheses that could meet the public’s interests were tested.
At first, these tests do not seem to point to a solution, however, they are of great value.
This is because, although they do not reveal the ideal product, they serve to rule out hypotheses with no chance of success.
By itself, this is already a valuable lesson, as it brings developers closer to the ideal solution.
This is, of course, as long as they keep testing, collecting feedback and evaluating the products until they fit the preferences of the target audience.
Increases The Chances of Success
As we have seen, every market launch needs to anticipate risks. After all, it’s easier to know what goes wrong than to find the product that meets people’s expectations.
Reducing the chances of failure is therefore a way to increase the chances of success.
This is the basic proposition of the Minimum Viable Product: to be a precursor of a service or product, so that it is known before its launch what can become a success.
Instead of having a high risk of acceptance in the face of a ready-made product, you will be able to test the solution in a shorter time and without great costs, and this way, you will not join the list of companies that spent too much to launch products that didn’t pay off.
Through the Minimum Viable Product, the product reaches the market much faster and the public is being won over little by little, with the advantage of really getting it right about what are the customer’s wishes.
Therefore, it is certain and evident that the Minimum Viable Product brings advantages, in the development of this new business or final product, with a higher success rate. Get in touch and let’s talk about the MVP of your idea.