What Is a Minimum Viable Product and Why You Need to Build That First
The worst mistake I see startups making time and time again is attempting to build a fully-featured product from day one. It's an easy mistake to make, but one that can often kill a startup before it even gets started.
Entrepreneurs spec out a product that they think their future customers will love, then approach a software agency and spend tens of thousands of pounds building it.
Armed with their shiny new product, they take it to market and quickly realised that customers don't love it as much as they do. They've blown their entire budget in one swoop and can't afford to make any changes. The startup dies or struggles at best.
Why Product Development Fails
Unless you're a clairvoyant who can see into the future and read the minds of your customers, it's unlikely that you'll ever be able to spec a product that accurately meets your customer's needs.
When you fall in love, you become blind sighted and overlook many of your partner's faults. The same happens when you fall in love with your idea. You believe it's the best, most impressive thing in the world, but no-one else cares unless you are solving their problems.
It's impossible to solve customer problems without first understanding what those problems are. Even with basic knowledge, it's difficult to build a solution in a vacuum.
What is a Minimum Viable Product?
Instead of building a fully-fledged product, a minimum viable product (MVP) is the most basic version of your product that solves your customer's problem. It isn't an entirely functional, all singing, all dancing product. It just needs to provide enough value for a customer to use it.
The purpose of the MVP is to get a product into your customer's hands as quickly as possible for testing. This will enable you to:
a) accurately test whether your product solves their problem
b) gather vital feedback from your customers
You then use the feedback from this exercise to inform the next version of your product, ensuring that you're building features that your customers need and will be prepared to pay for.
When our customers approach us with a product spec, the first thing we do is tear it apart and distil it down into an MVP. We build this first and help them to get the MVP into the hands of early users for feedback.
We use this feedback to inform the next stage of product development, ensuring that any features we build will secure paying users.
If you have a £40,000 product development budget and you blow this right off the bat on a poorly researched product that doesn't meet your customers' needs, your business is not in a good position. You could easily find yourself spending another £40,000 to fix the product.
Now, if you were to build an MVP – you would spend £5-£10k initially and have tested your product with real customers. Then, you spend the other £30,000 to get the product to the next iteration. If you've executed the process correctly, this second iteration should lead to paying customers.
Case Study: Get Invited
When we started building our product – Get Invited – the first thing we did was to create an MVP. It took less than a day to make and looked horrendous, but we pitched it to a prospective customer.
We weren't trying to sell the product at this stage; we just wanted feedback.
We received lots of ideas, criticism and feedback from our prospective customer and used this to build the next iteration of the product, and presented it back to the customer.
Our customer was so pleased that we used their feedback to build a product that solved their needs; they took an enormous risk and became our first customer – trusting us to handle thousands of pounds of their money, yikes!
When they ran the first real event with paid tickets on our platform, we got even more feedback from ticket-buyers.
You can probably tell what I'm going to say next – we used that feedback to improve the next version of the product.
Rinse and repeat.
Had we of spent six months building a full-featured ticketing system from day one, I'm confident that five of those months would have been wasted. We also had the luxury of creating the product in-house at zero cost. Most people don't have these skills and must outsource, which costs a lot of money.
If you're investing your hard earned cash into a product, then make sure you're spending your money smartly. Every pound should get you closer to paying customers, and the fastest method with the least risk is to build a minimum viable product.