Tech Word For The Week is a weekly series where we look to explain commonly used words in the tech ecosystem in a simple, engaging way.
As a startup founder, one of the keywords you should familiarise yourself with is Minimum Viable Product. You should be able to articulate it adequately to investors, your first clients and your early stage employees. In this week’s edition of Tech Word For The Week, we’ll delve into this word. Let’s get started.
What is the Minimum Viable Product?
It’s a term coined in 2001, by Frank Robinson and popularised by Eric Ries (author of Lean Startup) and Steve Blank. Ries defined MVP as the version of a new product that enables the team to gather the maximum amount of proven customer knowledge with the least amount of effort.
Developing a minimum viable product usually takes place before a product is released to the market. It is the first thing you can give to the very first set of users you want to target to see if you can provide any value at all. This version of the product will contain only the essential functionalities/ features that consumers can test and give you feedback on.
Let’s dive deeper to have a firmer grasp of what MVP means. Around the early 1990s, Jeff Bezos read a report about the future of the newly invented internet and how it was going to revolutionise web commerce. It was projected that web commerce would grow to as high as 2,300%. With this information, he set out to create an online marketplace.
To begin with, Bezos created a list of twenty products that could easily be traded online. After finding his top 20, he narrowed the list down to the 5 most promising products. They were books, computer hardware, computer software, compact discs and videos. He finally settled for books since there was a huge demand for literature worldwide.
He created a simple website that was made up of a catalogue of books. When customers made an order, Amazon purchased the book from the distributor and shipped it to the customer. From that point, Bezos started Amazon, tweaked the process and consolidated on it to sell more products. Moving books from distributor to customers easily was Amazon’s Minimum Viable product, and from there they have built an empire.
Your MVP is the cheapest and fastest way to receive initial feedback from customers so the product can be improved upon. It is the basic version of your product idea. Creating an MVP will help you to find out the need and willingness of your target audience to pay.
Benefits of MVP include:
Low Capital Investment
Minimum viable product ensures costs are reduced, and resources are saved. It prevents the creation of products that are not needed. It guides the developers to move in the direction of what the market wants at the lowest possible cost.
Low risk of loss
When founders start with Minimum viable products before committing resources (such as time, money, effort, etc.) into the product, the possibility of suffering loss is reduced. To test the MVP, all you need is the least amount of tangible product enough for a few users to provide feedback on.
Ongoing feedback for Product developers
With Minimum viable product, product developers have credible and ongoing feedback to work with. It provides them with a verifiable feedback loop to gauge how customers will react when the product is launched. This will help them to eliminate the things that are not necessary.
Evidence of demand
Creating a minimum viable product will help to establish if there’s a need for the product idea. There are so many products today that are not necessary, or the demand is not big enough to create a profitable business around. The minimum viable product will help establish this at the initial stage of the product.
How To Create a Minimum Viable Product
Identify The Problem You’re Solving
The primary aim of a product is to proffer solution(s) to a pressing problem. A lot of founders/entrepreneurs allow themselves to get caught up with trivialities that deviate their attention from the problem they are trying to solve.
By carrying out a thorough market research, you can identify the problem and find out how the consumers want the problem resolved. When you truly identify the problem you’ll be able to build the product your target audience needs.
Identify the Easiest Way to Solve the Problem
After deciding on the problem you want to solve, the next thing is identifying the easiest, cheapest and most efficient way to resolve the problem. Most times, what the product developer has in mind as the product model might be different from what will be eventually created.
As the developer keeps iterating on the MVP to secure the perfect product he’ll keep being led to more effective ways to the solution. This happens if he is receptive to the feedback provided by early adopters and users.
Prioritise The Basics
While developing the Minimum Viable Product, you need to focus on the important features that the product cannot do without. At this stage you don’t require the advanced features. All you should focus on are the pertinent features required to solve the problem. Much later, after the final product has been launched, you can create the extra features.
The Minimum Viable Product is not the finished stuff, instead it is a stepping stone. So you need to keep tweaking, changing, and iterating. You must commit to a continuous learning and never ending improvement.
So once you identify the problem, launch the product idea quickly. Keep it simple with very limited functionality. Get it into users’ hands. Listen carefully to what they want and keep iterating.
In his classic book, “Lean Startup,” Eric Ries said, “What if we found ourselves building something that nobody wanted? In that case, what did it matter if we did it on time and on a budget?” The Minimum Viable Product is an efficient way to build a needed and valuable product from the ground up. It’s an opportunity to build, improve and pivot on the go.