Guest Opinion: Want to know the main goals of MVP and what are the goals of MVP? Read this article before launching MVP
Startup failures are nothing new for a modern market. During the last few years, it became a rule of sorts that 90% of just launched startups fail. Only 40% of surviving new startups got profitable within the last year. According to CB Insights research, 38% of startups failed because they lacked cash or new capital. Another 35% of startups found out that their products or services have no market need. 20% admitted to being outcompeted by other companies. 19% said they had a flawed business model that didn’t give them a chance to grow successfully. Among other, less popular reasons are legal challenges, poor product quality, conflicts between team members, and pricing and cost issues.
Now, what can a company do to avoid the most common factors that contribute to startup failures? First of all, it should analyze the market and find out if the startup meets existing market needs and has potential clients. Then, it’s time to test core functions by creating an MVP, or Minimum Viable Product. A startup can develop an MVP in-house or find experts who know what to do — https://www.purrweb.com/, for instance, needs only three months to create MVP from scratch.
In this article, you will learn why a company should develop and launch MVP, and what benefits it brings to a company.
There are several reasons why startups should develop an MVP:
- Determine if the product meets the needs of potential customers;
- Get feedback from customers and adjust their value offering expressed in the main features, monetization model, customer service approach, etc.
- Determine how to develop the product into a fully functioning one — what features to prioritize, what to add, what to leave for later.
By collecting and analyzing this kind of information, a company can determine if its product has a chance to survive on the market.
Now, let’s go through the main benefits that a company gets by launching a well-developed MVP.
Core Functionality Focus
MVP is a helpful tool for a company to test a product’s main features and shape its core functions. Here are the examples of some companies and a summary of the way their MVP and user’s reception of it helped them improve their product.
A core feature
MVP tested how many artists were ready to sign contracts with a streaming platform, and what users would pay for streaming music rather than buying or pirating it.
Uber (originally Ubercab)
MVP had a narrow functionality such: it allowed booking cabs and paying for them via the app. MVP was meant for passengers only, but the feedback has changed that and the app has included drivers, too.
Snapchat (originally Picaboo)
MVP helped gather info on how useful a function to send photos with time limits was — the app has found its audience after introducing self-destructing videos.
Facebook (originally Thefacebook.com)
MVP was a social platform where people from Harward university could talk to each other, share their news, and react to the other’s news. It validated people’s interest in such a website.
Airbnb (originally AirBed & Breakfast)
MVP’s goal was to figure out how many people are ready to live in strangers’ houses or let strangers live in their homes.
Refine the Vision
A company needs to formulate its vision of a product before MVP development. Understanding vision will help a product team develop products with business objectives in mind and make decisions relevant to the company plans and principles.
MVP launch is a great opportunity for a company to comprehend if its vision is relevant and a product is wanted. It also tests a company’s strategy and provides information about its effectiveness or lack of it. By analyzing the results of MVP’s test run, a company can find out if its vision, plans for future development and growth work on the chosen market or require changes.
Engage New Users on MVP Stage
A test launch of MVP is a great way to determine if the target audience is interested in the startup. If an MVP gets good reviews from the beginning, it means a company understands its customers and what they want. The worst-case scenario is when a target audience isn’t satisfied; or if people who the founders thought of as a target audience aren’t interested in the product at all.
Here are also some tips on how to engage first clients to an MVP and understand more about them:
- Follow recent news and trends within your industry or niche and be an active participant of communities your target audience frequents;
- Talk about customers’ challenges and pains you’re solving — both with them and with other people (perhaps, even people on the other side of the pains: for instance, if customers are travellers and have issues with travel disruptions, the other side would be airlines, airports, travel agents, etc.);
- Meet potential customers offline;
- Run a Wizard of Oz test. Present the visual part of your MVP to users while handling all mechanical components of the software manually) to find out if your audience wants to use your product and does it smoothly.
- Conduct the fake door test. Create a landing page with MVP’s benefits description and a purchase option and redirect users who have chosen to pay to a collecting email form — with apologies and a promise they’ll be notified about MVP release. Customers’ willingness to spend money is your best indicator of a product answering their demand.
MVP development is faster than development from scratch — you only build the core functions that let you get knowledge about your customers you’ll use later. This knowledge allows companies to enter the market faster as they know what to focus on.
Besides, with the MVP helping you to confirm your idea is needed, attract first adopters, and lay down foundations for further business and marketing strategies, you’re avoiding common risks: failing a Great Launch, building something no one needs for years and other things that keep startups from success.
Here are some key points about MVP to keep in mind:
- Usage of MVP can help a company avoid the most common mistakes new startups make;
- MVP development is useful for focusing on a product’s core functions — features that make a product special — and for refining them;
- A company can use MVP to get feedback from the target audience. With users’ responses, a company can decide how to further develop the product;
- Building MVP is an affordable and fast way to get your idea to people and investors that’s less risky than full-blown software development.
Despite everything mentioned above, MVP isn’t a necessary step of startup development — but it is a great tool to test the waters and evaluate a company’s abilities — specifically for early-stage startups.
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