Coming up with an ideal product for consumers is not an easy task. Businesses usually have to conduct a lot of research and come up with different prototypes before finally launching a product. Another thing that has to be considered before the final launch is how complete the product should be. This is where the minimum viable product comes in. Many successful companies like Dropbox, Uber, and Zappos initially started with minimum viable products before they gained popularity.
What is a minimum viable product?
Before we go on to explore how MVPs help companies in understanding their customers, it is important to look at the minimum viable product definition. Minimum viable product (MVP), which is a fundamental concept of the methodology of lean startup, was first described by Frank Robinson in 2001 and thereafter made popular by Eric Ries in 2009. The latter defined MVP as a version of a product through which a team can derive the maximum validated learning about consumers.
If we were to explain it in simple terms, it is an initial product version that can be used to get feedback from consumers. It basically consists of the essential features that can give customers a sense of its functionality. The minimum viable products are different, in some respect, from the final product that a business aims to provide. For example, the minimum viable product might not yet have that special feature that the product will eventually become known for.
Below are some of the reasons why companies prefer to use minimum viable products:
- To reduce the costs of implementation.
- To prevent large losses in capital and failures to some degree.
- To release their product in the market in the shortest time.
- To test the demand that the product might create before launching the full version.
- To gain valuable insights about what works in the market.
- To analyze the interests and behaviors of consumers as companies get to work with them directly.
Examples of MVPs
Many prominent companies have made use of minimum viable products before launching their actual product or service in the market. To develop a better understanding of MVP, the following section discusses some examples of minimum viable products.
Every startup wants to save time and expenses while developing a product. An example of this is Amazon, which started an e-commerce services website by employing the idea of selling affordable books. Over time, the unique idea evolved, and because of its customer service, it was able to grow into the e-commerce giant it is today.
Another important aspect of creating an MVP is attracting investors early on in the process. An example of this is AngelList, which started with a simple idea of giving entrepreneurs a platform to raise funds. Over time, investors found the idea of AngelList a viable option, and the website was scaled to a large platform for getting seed funding.
Another great example of saving time and resources is Zappos. The founder of the company based the idea of his business on selling shoes from retail stores. However, he did not buy an inventory beforehand. He posted the images of the shoes on a website and purchased the inventory only after the initial customers started placing the order. Over time, Zappos was able to see a huge demand, which eventually led to the expansion of the company.
Benefits of MVPs
The main reason most companies decide to use minimum viable products is that they allow them to understand the interests and the needs of customers. They do not have to develop a product fully in order to get feedback. Using a minimum viable product increases a company’s chance of achieving overall success.
Following are the ways in which the MVP helps in building an understanding of the customer preference:
- Testing the product. Internal testing of products cannot match the testing in real market conditions. As a version of the product is released in the market, companies are able to evaluate its performance.
- Focusing on key features. Using an MVP, the focus is on the key features which target the needs of consumers. No additional and unnecessary features are added, which helps in determining whether the product is actually viable for consumers.
- Reducing time and cost. MVP helps companies in saving time, effort, and costs when releasing the product as the process of development does not go on forever. If the MVP has some issues, the company can then spend extra time improving the product. This ensures that the final product that reaches the customer is close to perfect.
From this discussion, the importance of a minimum viable product for a company is amply evident. Businesses can use the prototype to perfect their product before the final launch and ensure the utmost satisfaction of the consumers.