What does MVP mean and why you need it?
Tags: mvp, appdevelopment
Published: 2020-06-09 14:15:23

Your future product will not bring you profits if people do not need it. But how to determine if someone needs a product and not before the production start? [Lean startup](http://theleanstartup.com/) ideologist Erich Ries knows the solution. You need an MVP approach. 

The article will help you learn what MVP is, how to apply the concept in your project, and of course which startups managed to hit the jackpot thanks to the MVP approach.



##What is MVP and why does it matter?

MVP stands for a minimum viable product. The term was coined by Frank Robinson. Erich Ries, who became the main popularizer of MVP in the world, formulated MVP meaning as follows:



*The minimum viable product is that version of a new product a team uses to collect the maximum amount of validated learning about customers with the least effort* - [The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses](https://www.amazon.com/Lean-Startup-Entrepreneurs-Continuous-Innovation/dp/0307887898)



In practice, the concept of MVP looks simple: the company launches a product ready for use on the market and strives to collect as many opinions of its users as possible. The trick is that the minimum viable product performs the main function, but it does not have all the variety of additional features originally conceived by the team. That is how the MVP definition could be translated in terms of marketing.



Why does the MVP concept work? Because it makes no sense to spend the budget for the secondary improvements of the product, if the key function does not work as expected, or does not meet the users’ need. To realize how much money you can save by applying the MVP concept, it’s enough to keep in mind that over 45% of all IT products’  functions are never even explored by most of their users, as [Standish Group said.](http://www.featuredrivendevelopment.com/node/614)

Since MVP helps test a startup hypothesis by spending as little money and time as possible, there are 3 options you may face after MVP launch:

1.**If the hypothesis is completely correct** and people need the product, development continues.

2.**If the hypothesis is only partially true**, customer feedback helps to change and refine the startup idea.

3.**If the hypothesis is refuted** — well, at least, the company retained 90% of the funds allocated for the full implementation.

The best way to define MVP is to look on it through the launch checklist. There are several conditions you need to provide yourself with in order to create your MVP:



- Your startup hypothesis must be clearly formulated. Example: "we deliver food from urban restaurants to offices", "we help people buy tickets online"
- You need to know the viability criteria of your product. Example: if you are going to launch a network of art-house cinemas, you need to have at least one equipped cinema hall, one film, and one ticket office
- You should have the tech ability to create MVP and launch it to the market as soon as possible.
- You need to find the first users to collect feedback, and then to analyze the data and to determine whether your idea is worth developing.


MVP implementation is not a one-time action. Using the technique, you can endlessly test hypotheses and determine the nearest development plan for your business. The three key benefits MVP gives you are budget savings, the ability to optimize, rebrand or even radically pivot the product before the final launch stage and an early customer base.



##What the difference between prototype and  MVP?

Prototyping is an essential part of product design. MVP is a product so its design requires a prototype. Despite this, the prototype and the MVP concepts are sometimes mistakenly considered to be the same. Let's see where is the difference. A prototype is a simple visualization of future product needed for further product development and production.



Prototyping is used by those teams who are going to launch MVP, as well as by those who decide to release a completely finished product. A product can have many prototypes. The main task of the prototype is to visualize the service and its logic or to give as many samples of the future product embodiment as possible. Based on the chosen sample, a final product (or MVP) is created. Unlike a minimum viable product, which is designed to serve real consumers, a prototype is created for inner use or to present UX and ID for investors.



The prototype may perform its idea in the form of sketches, wireframes, mockups, and physical or interactive models. There are plenty of ready-made [prototyping tools](https://www.awwwards.com/the-best-prototyping-tools-for-2018.html): InVision, Sketch, Axure, Webflow etc.



*MVP is good enough and can be improved to be great one day* - [Alex Iskold](https://www.startuphacks.vc/blog/2015/10/07/re-thinking-viability-of-your-mvp) notes 


The same can not be said about the prototype. It is impossible to develop any prototype into a product. All you may do with it is to take it as a sample.



##How MVP principles help create the product

The MVP concept mitigates entrepreneurs’ and investors’ risks. The Lean Startup bestseller author described the minimum viable product concept as a tool of sustainable [custom software development](https://lanars.com/services). However, he also gave an impetus to the conceptual innovations in marketing and manufacturing.




###MVP principles in product design

Since the work with any MVP strategy requires the constant development of new product versions, [each cycle includes prototyping](https://www.interaction-design.org/literature/article/minimum-viable-product-mvp-and-design-balancing-risk-to-gain-reward). Product design development has several stages: mockup and wireframes design, UI-optimization, and prototyping. At the first MVP implementation, product design is developed based on the team hypothesis. While preparing the following iterations, designers work with the data obtained from actual users of the previous product version. The task of an MVP design team is to strengthen the weak points of the product, remove unnecessary elements and facilitate the user flow by making product features clear.



###MVP principles and Agile

Today, the Agile methodology cannot be imagined without an MVP component. [Agile approach](https://www.agilealliance.org/) are aimed at improving the efficiency of software development through the work of small self-organized teams. In such units, communication is as simplified and comfortable as it could be. The units also use the iterative development method, which leads to a gradual improvement of the product without violating its integrity.



As a rule, Agile teams work on MVP if MVP development is fixed in their contracts. Each new iteration of the product, which occurs at the interval of several weeks, is created based on the user feedback. However, startups often opt for fixed-price contracts for MVP development, which means that there might not be anything “Agile" about the processes early on.



###MVP and marketing

Each marketer knows that the more customer data you have, the better result you will perform advertising and selling the product. In order not to invest all funds at once in the large advertising campaign, marketing departments prefer to measure the potential response by using low-cost promotional MVPs. For example, before launching a worldwide advertising campaign, brands determine the response to its ideas within one region.



Another example of MVP in business outside the software world: to test the marketing hypothesis, product company may create a simple landing page under any site builder and pay for its contextual advertising. The idea of the site, in this case, is to Inform visitors that the company will soon present the product, offering them to leave their contact details to be the first who will check the product’s features.



If you hit the bull's eye, marketing MVP will provide you with a contact database of those who are ready to use your product and to measure a future income. A similar task could be performed by demo videos. In general, studying the reaction to MVP is the direct task of any market department.



##How to build an MVP in the right way

Creating an MVP consists of 5 steps. Please note that the last step does not mean the end of MVPs development. Hypothesis testing cycles can be repeated indefinitely until you have the perfect product that completely satisfies both you and your customers. But don't we know that this is a utopia?

That is what the MVP production process looks like:



**Step 1. Customer and market study**

Find out if your basic idea (if you have one) meets the needs of those you plan to sell your product to. Here, field research, market analytics and focus group surveys will be useful.  Also, make sure there are no other products on the market that already cater to the same audience. If you choose a competitive environment — define the uniqueness of your product.



**Step 2. Define your idea**

Your MVP must perform an important function in the client’s world. What is this function about? On this phase decide on the key features of your product. Start with customer value and competitive advantages.



**Step 3. Design prototype and user flow**

Choose a form for your idea. Do not forget: the design should be determined by the convenience of the user. Consider the best and the cheapest (less finance consuming for minor features) way to present the main function to the user. Think about payment methods and feedback sources. Work with prototypes, choose the best one and then implement it! Note that the MVP emphasis should always be on one and only key function.



**Step 4. Create MVP**

This is the longest process among all those mentioned. Use the selected prototype and keep deadlines.



**Step 5. Collect the feedback and make your team learn**

When you brought MVP to the market, try to promote it. Remember that instant profit is not your goal. You need to find out how users react to your product, whether they are ready to pay you or not, and whether the features of the product are clear for them. To answer these questions, integrate analytics into the product, follow the number of reactions and collect the feedback. When you have a critical amount of data, gather a team and decide on the further development of the project. Then start working on a new MVP.   



##Successful minimum viable product examples

You are unlikely to find today at least one product that was released in all its glory and immediately became a market superstar. [According to Forbes](https://www.forbes.com/sites/neilpatel/2015/01/16/90-of-startups-will-fail-heres-what-you-need-to-know-about-the-10/#51acb1796679), 9 and 10 startups fail after the first investment round. The MVP approach allows investors not to lose all their money and enthusiasm drawing amiss. Each product consists of an endless pursuit of perfection. However, there are very few examples of first MVP deafening success:



**ETSY**

In 2005, the idea of a crafts marketplace was tested on the eBay basis. With the help of MVP, the startup marketers identified the most popular product categories and studied the key handmade buyers’ needs. That was how the development of an independent platform for handmade masterpieces sales begun. As a result, marketing emphasis was placed on the female audience and C2C sales. Today, [54 million people](https://www.statista.com/topics/2501/etsy/) use ETSY.



**Spotify**

How did Spotify manage to get major music labels contracts in just a few months? The answer is convincing MVP feedback! In 2007, the MVP of the world famous streaming music service was launched for a closed group of Windows users. Having received the data of a considerable number of first customers, the Spotify founders could easily prove everybody that the service would bring a huge income. Their expectations were met. Today, the service receives a subscription fee from over [87 million](http://expandedramblings.com/index.php/spotify-statistics/) people.



**Airbnb**

The history of the rental service operating without intermediaries is a classic example of how MVP was used at the time when the approach has not yet been so common. In 2008, Brian Chesky and Joe Gebbia created a simple site offering to rent their loft apartment in San Francisco. Its visitors had a chance to check photos of the apartment and book it for the desired period of time. The idea didn’t come by chance: at that time a large design conference was supposed to be held in San Francisco. The idea had found a huge response and soon the startup MVP has grown into a worldwide service with 3,000 permanent workers. Add to this 150 million users, [according to 2019 statistics!](https://expandedramblings.com/index.php/airbnb-statistics/)



**Uber**

Uber's philosophy has not changed since the launch of its MVP in 2009. The first version of the service allowed users to find the nearest taxi without calling the taxi service, and to pay for the trip without taking the wallet out of the pocket. Despite the fact that Uber has always had the form of an application, its basic set of functions did not include direct driver calls, client's geolocation sharing, and car category selection. The idea presented by Uber MVP turned out to be so revolutionary that it caused a series of strikes! Uber got the victory. The service is now available in [600 cities around the world.](https://muchneeded.com/uber-statistics/)



##Conclusion

If you want to increase the chances of your business for long and profitable life — an MVP approach is exactly what you need. The MVP approach allows you to save money by abandoning unviable startup ideas. It also helps you to improve the product on time and to collect a customer database before the full launch. Although the MVP philosophy became popular due to the software development cases, it works equally well for physical products, design, and marketing.