Creating a new digital product , without a doubt, is a challenging task.
You will need to go through a series of steps before launching your product on the market. It’s not enough to come up with a great idea, think through a marketing campaign, and find enough investment. The classic launch strategy focuses on product development.
If you read stories of experienced startups, you can find out that product development is not at all such an important process as it may seem.
Think of Dropbox and Pebble. They began to receive first orders and even bright reviews even before they launched their products on the market! There are many more companies that started their activities without serious investments. In a normal situation, this is a guaranteed loss. But we know a model that will lead to success.
If you want to repeat the successful experience of these companies, do not rush to launch a finished product. What you can do instead is to launch a minimum viable product (MVP). If you feel that you are interested, we are ready to provide you with a little more information, and most importantly, real business cases.
MVP Then and Now
Back in 2011, The Lean Startup book was published. Then it became a best-seller. It was written by Eric Rhys, who wanted to share his experience in startups industry. It was hard to believe that this book had a huge impact on the entire industry. It was it who introduced several concepts that are very familiar today: flexible development models, continuous software deployment, A/B testing service. Among them is the MVP concept.
What is the MVP product?
This is a product that contains exclusively basic functions. They are necessary in order to check the quality and relevance of a new business idea to evaluate how people react to it. The idea of releasing such a product is quite simple. You first receive feedback from your potential customers and only then release a final version of a product on the market. It is this approach that helps companies avoid mistakes and large losses of money.
At first glance, the concept of developing such a product looks quite simply. But not all companies correctly understand the idea. They are supposed to create a version of the product with simplified features. But companies either abandon the key functions of the product or initially develop too complex a solution. It is important to develop such a product so that it provides the main concept of your idea, simply in a basic embodiment.
Today, a lot of products and various services are presented on the market. This led to the fact that there is no universal model that each startup can use. We suggest discussing the most famous types and understand how they differ.
This is a good solution that allows you to present your product to the audience, potential customers while investing in it the minimum amount of money. Some companies don’t invest anything at all. The idea of this type is about using the existing tools and solutions during product development.
In fact, your product consists of several components. You bring them together to create the foundation for a future product. Imagine that you are creating an evening dress rental market. You absolutely do not have to develop your own solution from scratch. There are a large number of popular platforms, such as Marketplace and Share tribe, whose services you can use for this purpose.
It is not difficult to provide an example of a business that works according to the Piecemeal MVP scheme. You probably know about Groupon. It is hard to imagine people who don’t. This is a very popular American site, which daily attracts a huge number of users. Clients from all over the world get access to offers from travel agencies, restaurants, sports centers, retailers, etc. The bottom line is that all these offers are available for a short time and are valid until a certain number of people use them. As soon as you choose and pay for an offer you are interested in, you will receive a unique code that will allow you to use it. Different companies offer different options: discounts, free visits, memberships, bonuses, gifts, savings systems. In any case, this is a very profitable way to get a product or service. It is not surprising that this scheme is in great demand.
Today, Groupon is a world-famous company that can afford the best teams for developers. And the idea of their business sounds very simple and clear. But it was not so when this story was just beginning. As early as the beginning of the 21st century, Andrew Mason developed Point. It was a platform for people who wanted to offer their services and use the services of other people. Unfortunately, the global economy changed their plans. Credit markets and businesses were destroyed. It seemed that the idea of such a platform was simply doomed.
But Andrew Mason and his co-founder found a way out of this situation. They figured out how to optimize their platform for the realities of that time. They offered promotions exclusively to local merchants and also introduced limited validity periods for all transactions.
Initially, the co-founders did not even count on any profit. Because of this, they worked on third-party resources. They could develop their own CMS, but they decided to choose WordPress and to create the blog on this platform.
Andrew Mason says that Groupon at launch was not a self-contained product. Every day they created a new post with offers. If it was necessary to add more colors and sizes for, for example, T-shirts, they simply wrote about it in the product description. They even created coupons in the PDF format using third-party applications.
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Imagine that you have the following business idea: you want to organize a service for the delivery of cosmetics samples selected individually, based on the individual parameters of customers. What type of MVP do you think is suitable for creating this service?
Maybe you should start by looking for people who want to test your idea. This will help you manually take samples and analyze data. Once you understand that this service is quite viable, you can develop an application for collecting reviews of people, data analysis, and selection of cosmetics in automatic mode. This type was called “Concierge” because initially, you provide services manually by checking your business idea.
There are also well-known and cited examples for this type of MVP. For example, the mobile app Food on the Table. Its meaning is to collect user preferences in food and then offer shops and recipes that will allow you to diversify your menu. When this startup was just launched, in 2009, Manuel Rosso did not have a mobile application and website to develop his service. He emphasized making sure customers found such a startup useful. At first, he found people who were interested in this experiment. He talked with them, found out more information about their taste preferences, estimated their budgets. Having this data, Manuel was able to manually select recipes, create shopping lists, collect coupons with profitable stocks. In fact, the concierge provides the same services. Only now is it a successful company whose services are used by thousands of people. Grocery stores got a comfortable platform for promotion, and ordinary people now know how to shop wisely and efficiently.
Using the Concierge MVP, you can better communicate with your target audience and understand how customers are interested in your business idea. The important thing is that you can stay flexible. After all, if you see that in reality, people are interested in other solutions, you can change your strategy.
Wizard of Oz MVP
The previous MVP type is focused on analyzing the opinions and experiences of other people and openly advertises that the product is not yet finished. But there is another type that offers a slightly different approach. Using the MVP “Wizard of Oz,” you create an opinion among your potential customers that your decision is ready, that this is a real deal that you can use at any time. In fact, the product may be under development. And it really works.
We can illustrate the success of this approach with the help of the world-famous company Zappos . Its founder, Nick Swinmurn, visited several shoe stores to photograph regular shoes. Later he posted these photos online to see if people would like to shop online skipping the fitting process. You surely know how Nick’s experiment ended. His company Zappos annually attracts more than a billion dollars. Amazon offered a pretty impressive sum for it.
If you are the creator of a startup that provides many services, Wizard of Oz MVP is your chance to test the popularity and relevance of your idea. Outside, your product seems ready-made and fully functional, but only you see what lies behind it.
The same principle was used by the CEO of ZeroCater. He thought about developing a service for the delivery of food for companies. But he did not know how much such services would be in demand. How did it all start? Arram Sabeti initially worked as a community manager. One of his responsibilities was catering to employees. At first glance, this seems rather simple, but constant calls and placing orders turned out to be very tiring for Aaram. Then he began to use his work as an idea for a startup. Initially, he worked in a regular spreadsheet. Gradually, the number of columns increased. I had to stop at the moment when the processes began to collapse due to such a volume. Fortunately, the startup found financing for its further development. $1.5 million from Y Combinator allowed the company to grow and attract more new customers. Today, its income is more than $100 million.
Thus, a minimally viable product is necessary for the successful launch of an idea. Relying on this method, you can even develop your business with minimal investment, avoiding significant losses. This is a great field for experimentation, searching for new ideas and insights. Many companies that thrive today began their work with just such a model. In addition, its use proves that you focus on your potential audience. Technical details are not as important as customer feedback. Do you know what causes most startups to crash? Their products simply do not fit the needs of the market. It seems to you that you have a good idea, and you are ready to invest time and money in it. Then you launch your product, but it just fails. This would not happen if you took advantage of our recommendations and created a minimally viable product.
Major MVP Development Mistakes
You create a mobile application , landing page, or website with minimal key functionality. The development process includes the essential thing for a potential client and the least resource-intensive for you.
If MVP finds its customers, then the product is scaled, supplemented, and becomes a real business.
What mistakes should you try to avoid?
- The better is an enemy of a good. You should implement the key functions only. Of course, maybe you’re quite a perfectionist and want to launch the ideal product that doesn’t need any amends. But it is not the best way for you right now. You should keep your focus on the essential opportunities.
- Don’t be mean. The fact that you don’t waste resources on additional functionality does not mean you shouldn’t spend money. We develop key functions as efficiently as possible. It is important to show customers the quality. It is better to have a simple but reliable and customizable web page than a free one, but with a long time of loading.
- Rely on the Cupcake principle. MVP should be a complete product with a specific function. Throughout the entire period of product implementation, customers enjoy its “light version.” Imagine the car development process: nobody start with bringing the wheel to the market, then the wheel and the casing, and so on. Each time it is a full-fledged product that is 100% ready for use. Your final result is the sum of previous successful actions.
Many companies fail, ignoring feedback from prospective customers and testers. Respond to signals from them and eliminate defects. If customers say everything is going smoothly, make it perfect. Using MVP, you test the product on demand and decide whether you need to improve development or spend more time. Plus, you will save money and team resources.