Did you know that 70 % of startups fail because they developed a product that was unable to meet customer expectations? Research studies from CB Insights highlight 20 reasons that are responsible for the failure of startups.
The answer to these 20 problems lies in developing a minimum viable product, which is a common practice in IT nowadays.
Every startup owner is interested in developing a product with necessary features that makes the customers feel Wow.
Startup owners are worried about various things – Are we targeting the right set of people, are we taking the right product to the market, and so on? Everyone talks about creating customer-centric products that resonate with customers’ needs and expectations.
But how can you communicate with the customers, and how can you know their requirements? It’s all possible through creating a minimum viable product.
No business on earth would like to spend money on developing a product that has no market.
Hence, It’s challenging for businesses to come up with perfect products every time. This is where MVP comes into existence.
Table of Contents
What is MVP?
The term MVP was coined by Eric Ries in the book “Lean Startup” in 2011. The author of the book “Eric Ries” came up with his definition of MVP –
The author described MVP as a free-standing product with basic features with the sole objective of solving one problem for the target audience.
Moreover, The minimum viable product (MVP) is the basic version of the product covering fundamental features and essential functionalities required to meet end users’ needs.
Launching MVP is not a requirement for every startup, but it can prevent the company’s failure in later stages.
Many startups develop innovative ideas and launch products based on their assumptions, then fail in the market. The reason is pretty simple. Products in the market become successful when the products you are launching are what your customers need.
But, to identify the customer needs effectively, startups must launch MVP.
However, many business owners have misconceptions about MVP as a final product. No, MVP is not the final product. MVP is just a prototype of a product having basic features and functionalities.
If you are given an example of MVP, you can think about a basic online food ordering app wherein customers can choose from various dishes and place an order. No extra features or functionalities are there in the app.
Hence, it is considered the fastest and most cost-effective way for entrepreneurs to research the target audience, take customer feedback, and validate the product idea in the early stages of product development.
Not only is MVP launched by startups, but renowned brands, including Dropbox, Amazon, etc, started launching minimum viable products.
Drew Huston (CEO of Dropbox) analyzed that various cloud storage providers provided cloud storage services. Dropbox’s CEO started by creating a 3-minute explanatory video about how it works and its functions.
Drew Huston did not emphasize creating a complex app. He created a simple video. As a result, the number of signups increased by 5x without having an actual product developed, and the video got around 70,000 views overnight. This is the power of launching MVP.
Another great example of a successful brand that came up with launching MVP was Amazon.
Jeff Bezos started launching an online marketplace (bookstore). The website itself was the MVP. Then, he conducts a brainstorming checklist of ideas he could launch on the internet.
He narrowed down various ideas to just 5 product categories – books, video, software, computers, compact discs, etc.
Jeff Bezos decided to adopt the Wizard of Oz approach wherein there was an app with a manual backend and the user does not know about it.
So, He started collecting orders independently, purchasing the books, and sending them to the clients. He added more books on the website, and now Amazon is known as the no-one platform for various categories of books and other products.
Why Should Startups Consider MVP More Than Making Products Faster?
1.Reduces time and cost
Building a fully-fledged product is not a cup of tea for everyone. The entire development of a product takes months and years, along with investing hundreds and thousands of dollars to prepare it for potential customers.
But not everyone has many resources to convert an idea into a successful product. With MVP, you can launch a product with basic features and functionalities; it takes some weeks to launch it with a fraction of the budget.
By launching the minimum viable product, you can come up with adding basic features that your customers need. MVP makes it easier for business owners to test their products in the market, take customer feedback and finally make the product live in the market.
Hence, it’s a win-win situation for businesses to launch the MVP, test the product in the early stages of product development, and develop a full-fledged product accordingly.
2. Attract investors
According to Mary Kay Kash, “Ideas are a dime a dozen. People who implement them are priceless”. Coming up with a basic idea does not lure investors into investing in your product. Your product has true potential that compels the customer to pay.
Launching the MVP for the product gives them a reason to see your product in action. Thus, Investors are looking for startups that have solid business ideas and have tested their product ideas against real users.
3. Validate your ideas in the early stage of development.
Suppose you came up with a brilliant product idea, turned that idea into a product, and launched the product in the market. But this is not what the users expected. Your product failed to meet the goals of the end user. Hence, more money and time are wasted on building a product no one needs.
Instead, if you launch the Minimum viable product and notice that there is no market demand, the losses would be potentially low. Here, the chances of improving the product are greater.
4. Gather user feedback faster
With MVP, you can launch the product by taking feedback from the actual users. So, there is no more guesswork as you develop the product by listening to the customer’s needs.
One of the fastest ways is to develop MVP, by which you can connect with real users, collect information, and improve your product before it is launched. Thus, MVP is here to convert your scrappy ideas into a stable business.
The fundamental pillar for developing MVP is identifying the problem you are trying to solve. Most projects fail because business owners lack clarity about the project goals and objectives.
Just write the problems down and analyze the feasibility of the product idea. By developing MVP, you can validate the product idea without developing an entire product.
Here are a few ways to identify the problems of target customers –
a. First, Do overall market research, and identify the needs and pain points of the ideal customer
b. Secondly, Conduct competitor research. Think about who your competitors are, how many active users they have, and how they are solving the problem of their target audience.
c. Ask yourself what specific problem you are trying to solve.
d. A one-to-one conversation with customers can give insights into your target audience’s pain points, needs, and expectations.
Before launching MVP, you must be clear about what problems you are trying to solve and define the problem statement.
Consider this as an example: If you are launching MVP for e-commerce platforms, one of the problem statements could be that many small businesses need affordable and user-friendly platforms, as it becomes difficult for them to sell their products.
2. Identifying the target audience
The second step in building MVP is identifying your target customers and their needs and expectations. Companies that research the target audience are likely to grow twice.
Research studies from CB Insights state that many startups fail, and the #1 reason for startup failure is that they don’t have a market need. When you come up with developing a product, you need to be clear about who your product is for.
For instance – If you are interested in developing a task management app for remote persons, your ideal customers would be small business owners or freelancers who prefer to work from home.
It’s good to be as specific as you can when identifying the target group’s characteristics.
For example – Before creating an MVP for the fitness app, you can figure out the characteristics of the target customer, such as –
Let’s assume that your target audience is young professionals in the age bracket of 25-30 looking for convenient and cost-effective ways to track their fitness goals.
When Dropbox was developed, the founders identified a need in the market as people wanted to share files across different devices. They identified that their target persona was those customers who wanted to share files between computers and mobile devices.
3. Prioritizing the features
The next step in building MVP is the identification of the core features of the product. Start with the basic and minimal number of features you need in a product. Those features are the core yet basic features of a product that solves your target customers’ problems and adds value to their life.
Make the product simple, as products with extensive features would increase the development cost. The sole objective of having MVP is to reduce development time and cost.
For example – If your startup is trying to create a social media platform, consider developing a minimum set of features and functionalities that could make the app functional and solve the problem of ideal customers.
The basic features include creating a profile, networking with friends, and posting. While other features, such as live streaming, are additional features that could be added later.
4. Designing and prototyping
When you are coming up with MVP, you can put more emphasis on MVP from the user’s perspective. The startup owner needs to provide the interactive user interface of an app ranging from opening the app to making the final purchase.
After doing some market research, it’s high time for you to create a design for the product. Here, you can create a prototype of the product that more or less represents an actual product.
Thus, A prototype could range from a dirty version of the product to a mockup, sketch, or an interactive wireframe that mimics the real functionality of the product.
5. Building and testing the MVP
Now after designing an interactive user interface for an app, next comes the need to launch the MVP. Remember! MVP is not lower quality than the final product; it has to fulfill customer needs.
Dan Olsen (Author of lean product playbook) says that products fail because they don’t meet customer needs in a way that is better than other alternatives.
You can develop MVP using a low code, no code platform, hire a development team, or do it yourself.
Your goal in building MVP is to test the MVP with your target audience, gather responses from users, iterate it, and improve the product. While doing so, MVP can be tested using Alpha, beta, and Feedback testing. Hence, refine the product until it becomes fit for the target audience.
End Notes ….
If you want to save time, money, and resources, we highly recommend launching MVP.
At BigOhTech, we provide MVP development services, helping startups and enterprises launch their products cost-effectively. We are there with you, from initial ideas, prototyping, and development to the final release.
Contact our MVP app developers today for a free demo!
Q1. What is MVP for a startup?
MVP stands for the minimum viable product. Furthermore, The minimum viable product is creating a basic version with core functionalities that can fulfill the user’s needs. MVP enables the product team to work on the final product’s changes and develop a better version of the product.
In a nutshell, MVP means where the product development team releases a product having basic and sufficient features. Launching the MVP is a goldmine for entrepreneurs as they can test the ideas and assumptions before launching the final product with the least effort and resources.
Q2. Why builds an MVP?
Startups should consider developing MVP because of the following reasons – 1. Launching the MVP reduces time and cost. 2. MVP can potentially attract investors when they see that startup has a brilliant product idea and that idea is being tested against the users 3. MVP helps in validating the product ideas in the early stages of development 4. With MVP, you can take feedback from real users—no more guesswork involved.
Q3. How long will it take to develop an MVP for a startup?
Developing an MVP takes around 3-4 months for a team of 3-5 developers Business analysts and testers. However, it depends on various factors such as features, complexity, design, human resources, etc.