Companies have product ideas and want to convert the idea into live products. However, most startups need more funds to develop a fully functional product and lose when customers do not accept the product.
According to research studies from Statista, users abandon 25% of apps after their initial use. So, building an MVP is an excellent way to validate the product idea and get feedback from potential customers without spending millions of dollars.
If you are looking for a step-by-step guide on how to build an MVP that raises money for your mobile app, then you landed on the right blog.
Let’s get started…
Table of Contents
What is MVP?
MVP stands for Minimum viable product. Frank Robinson coined the term MVP in 2011, which was later popularized by Eric Ries. Businesses prefer to create MVPs to test their product idea and optimize the product for the best market fit.
Eric Ries, the author of “Lean Startup,” initially used the term MVP and developed its definition. According to Ries, MVP refers to the basic version of a product that enables the company to collect customer feedback with minimal effort and time.
MVP allows startups to launch the product quickly to market using minimum resources. MVP covers the product’s essential features to meet the essential needs of early customers so you can come up with an improved version of the product.
Generally, startups prefer to build an MVP as they have limited time and budget. The focus here is to develop a rough product covering basic functionalities and test the product in the market.
So, MVP is not a technique or a final product. It’s just a basic product comprising minimal features.
For instance – Imagine that bread with butter is an MVP, whereas bread with cheese, sauce, and vegetables is your final product.
Let’s See What The Numbers Say!
Around 70% of startups fail because they come up with launching products that are not a perfect product market fit. Research studies from CB Insights highlight that 20 reasons are responsible for startup failure.
Consider MVP as a brainchild where startup entrepreneurs gather customer feedback to develop a final product, so they won’t have to spend years and millions developing a product that no one wants to buy.
MVP aims to improve the version of a product rather than endlessly pushing your product to perfection. Building a product is never a piece of cake. If people do not like the final product, then your real money, effort, and energy will go into the bin.
Benefits Of Building An MVP
Here are the benefits to build an MVP-
1. MVP Saves Time And Money
Don’t think of developing a complex functional product with a range of extensive features; otherwise, you could waste tons of money and invest your time in developing a product that’s not worth it.
For every additional feature you think of adding to a product requires a minimum number of resources. Here, the product development team invests its resources in developing a minimal version of the product for the market. If the product meets the needs of users, and the return on investment is lucrative, then the development team thinks of developing an entire product.
Hence, launch the basic product in the market, get it out to beta testers, receive feedback, and then develop a full-fledged product.
2. Get Your First High-Paying Prospects
By developing a product with minimal features, your product will be exposed to the market, generating viral effects.
Even when a basic product is launched in the market, it will gauge the interests of potential customers, and if they accept the product, those prospects will turn into loyal fans.
When the product is fully developed and launched in the market, it always has some existing fans. Therefore, it increases your business’s likelihood of getting your first high-paying clients.
3. Validate Your Product Idea
Launching the MVP gives you a rough idea of whether the product fits your audience. Ask yourself whether the product has a promising future or not.
For Instance – If you developed a product with complex features and functionalities, it’s not your customer’s needs. Many competitors offer similar apps, and users are not interested in such products. Then, your product is likely to fail in the market.
So, through MVP, you can get to know whether users need such a product and whether they are ready to invest in the product.
4. Emphasize Adding Basic Features To The Product
The product development team often comes up with adding unnecessary features to the product which are not required in the early stages of product development.
But building an MVP allows the developers to emphasize adding core features of the product without which it won’t serve the user needs. Once those core features are developed, the development team can know what is needed and what’s not.
How To Build An MVP That Attracts Funding?
Here are the 5 steps on how to build an MVP that attracts Funding-
1. Identify The Target Audience
The first step to build an MVP is identification of customer avatar. You need to do adequate market research to evaluate the viability of a product. Research studies from CB Insights suggest that most startups fail because they come up with launching products that do not have a market need.
Figure out what problems your target audience has. For that, you can conduct a survey of your target audience and figure out what is something that they have been struggling with.
Launching the product by adding fundamental features won’t work anymore if you fail to identify who the product is for and whom it can benefit.
You can identify the challenges and struggles of the audience by joining the relevant Facebook group or Reddit community or even asking your prospects a few questions.
Bonus Point: You can get traction in the market once you identify the market gaps your competitors are not covering.
Create a buyer persona and define your audience characteristics such as age, location, sex, and interests. A buyer’s persona represents the ideal client avatar where you can develop a product targeting the right user set. It will help clarify that MVP aligns with the target audience’s requirements.
The first step is all about drafting a buyer persona and selecting a handful of clients who can try your product, and you can gather honest feedback from them. The better you define your ideal customer avatar, the better you can target them.
2. Define Your MVP Features
The second step in building an MVP is to define your MVP features. You must know the customer’s needs before creating a product.
Make sure to divide the features into categories: high priority, medium priority, and low priority. Brainstorm a lot as to what features you would like to add to the product.
Create a checklist of essential features you need to add to offer maximum value to the users. Cover the most important features when doing an initial launch.
Don’t go with launching an abundance of features to make your MVP fancy. You might have heard about this – Having a small set of target users is always better than targeting a whole range of audiences. Similarly, having a single widely chosen feature is better than adding half-boiled features.
Let’s understand this with an example.
You want to build a car, conduct overall market research, identify the target audience’s pain points, and get to know that customers want to reach places much faster than they can think of. They want to cover vast distances quickly.
But building a final product (car in this case) takes a lot of time and effort. Here, you will test the product idea by building an MVP.
You came up with launching a skateboard that can make it easier for customers to move from one place to another.
If the target audience accepts a skateboard and is ready to invest in the product, you can get clarity that they are looking for such a product. Hence, you can add more features to the MVP and convert it into a fully functional product. If your idea matches the user’s intent, it’s worth it.
Therefore, it’s all about solving someone’s problems and implementing more features later on.
3. Creating A Prototype
Now, you are ready to build an MVP in the market. Here, you will develop a prototype that represents the final product, which saves development time and effort. Prototypes can be created using various tools such as Figma, Adobe XD, or drawing sketches on paper.
The prototype works like a demo version of the product. The prototype allows the development team to test the MVP against real users and gather real user feedback.
However, most people treat MVP and Prototype as the same thing. MVP is a ready-to-launch product that is available for a specific set of external users. While Prototype is an internal tool where you take feedback about the product from internal team members.
Developing a prototype is essential for building a polished MVP.
4. Building an MVP
The goal of building an MVP is to attract brand advocates. Businesses that focus on designing the MVP get 36% higher revenue than those companies that do not invest in design (Source – Mckinsey report). The founders who prefer to skip designing the MVP fail to create a profitable product.
Even if you invest an extra $1 in designing the MVP, you expect $100 in return. Designing MVP emphasizes creating interactive UI/UX that enhances the customer experience. As you have heard, “First impression matters the most.”
An attractive and compelling UI/UX design of MVP lures customers.
While building an MVP, here are a few steps you should take into consideration-
You should know what to include in the design of MVP. You need to interview your customers and learn their pain points and struggles. Ask them questions such as – What is the hardest part when using the XYZ app? What have you been struggling with while using the XYZ app?
Next, you need to ensure to design MVP’s User experience (UX). The user does not seem confused while navigating through your app. Creating the user experience starts with creating a mind map of MVP for the mobile app.
Lastly, you need to design the user interface of MVP. While designing the MVP for a mobile app, you need to consider various UI elements such as the radio button, slider bar, search bar, etc.
5. Launching And Promoting The MVP
Here, you are launching the MVP in the market and making it available to the end users. The product is available for beta testing, and early adopters can try out the product.
You can create a basic product with minimal features, says a landing page with a detailed description, and give early testers a space to try out your product. This is what the CEO of Dropbox did by launching a short and explanatory video about their product.
MVP can be launched by creating a simple landing page explaining the features and benefits of the product, or you could even run a marketing campaign to create a buzz around the product.
Once MVP is developed, now it’s the right time for you to test the MVP.
MVP can be tested in 2 ways –
Either your team members can test the MVP
Early adopters/ first users can test the MVP
6. Raising Money For Your Mobile App
Lastly, create a funding plan for your mobile app. The funding plan for raising money for MVP covers these things –
The MVP should match investor needs. Do research about potential investors in advance. Don’t limit yourself to their MVP investment history; try to understand their goals and objectives.
While pitching your product to the investors, make sure that you focus on the future, not on the past. Explain to them that your product can potentially transform customers’ lives.
For Example – If you are creating a food delivery app, you should highlight the increasing number of online orders and ongoing delivery trends. When your pitch is strong, investors can’t keep themselves back.
Building the MVP makes it easier for you to raise money from investors. Consider MVP as the fundraising partner for your business. MVP allows you to launch the mobile app to the next level.
You might get an idea of how to build an MVP for the product. However, if you still need the help of experts, do let us know. We at BigOhTech provide MVP development services that can take your app to the next level.
Leave us your query in the contact us form, and our experts will contact you within the next 12-14 hrs.
Remember! Eric Ries once said, “Customers won’t care how long something takes to build. They care only if something serves their needs or not. MVP generally takes 3-4 months; however, it depends on the number of features, the complexity of features, the budget amount, the tech stack you are using, time spent on R&D, and industry experience.
Q2. What is an MVP in the business?
MVP refers to the basic version of the product having minimal features and functionalities. Many companies generally fear investing dollars in launching software without customer acceptance. Therefore, MVP is a lifesaver option for software development companies. The product development team receives customer feedback to iterate and improve the final product in the future.
Q3. How do I pitch my MVP to investors?
Here are some tips for pitching MVP to investors – 1. Do initial research from your side. Understand investor goals and objectives. Pitching MVP is not about sharing random numbers with investors; it’s more about sharing meaningful data and facts with the investors. 2. You must do your homework before approaching the investors. You should know everything about the industry in which you are entering. 3. Highlight the potential of the product for which you are launching the MVP.
Q4. How do I identify the core features to include in my MVP?
You can think of the sole purpose of creating MVP and for whom it is created. Then, you can classify the features of MVP into various categories, such as must-have, nice-to-have, and optional categories. Therefore, you should focus on adding relevant features to the product instead of adding all customer-requested features.
Q5. Why is building an MVP important for raising money?
Building an MVP is important for raising money because of following reasons- 1. You can showcase the product functionality to the investor 2. You can receive initial feedback from customers 3. You can test the product viability 4. Investors can assess the product idea and tell you whether you are on the right track or not