The MVP helps the entrepreneur to prevent wasting and losing time, money and other resources when building the product. The following picture illustrates the product building timeline applying the traditional business approach and compares it to the Lean startup approach.
Product development in the traditional approach faces a risk of the product failing once introduced to the market. Companies that use this method might not be able to recover after losing time, money and other resources. The product development using the lean startup approach eliminates this risk – companies might only face small step backs since the product development is based on MVP and customer insights are always taken into consideration. The founder of the professional social network LinkedIn, Reid Hoffman, once said
“If you are not embarrassed by the first version of your product, you’ve launched too late”.
This quote encompasses the main idea of the Minimum Viable Product.
Eric Ries described the MVP as a “version of the product that enables a full turn of the Build-Measure-Learn loop with a minimum amount of effort and the least amount of development time”. MVP is the earliest testable product. It is not the final, “perfect” product, but each MVP must satisfy the underlying desires of the customer – it needs to be minimally viable. Each MVP should be done quickly and tested with target audience as soon as it is developed. Before testing the MVP, the company should know what exactly they are testing, why they are testing it and how will they conduct tests – surveys, interviews, or other methods. The MVP should not only give insight into the customer’s opinion but also verify if customers actually face the problem that the final product aims to solve. MVPs should not be perfect or bug free – as soon as some viable version of the update is available it needs to be tested. This way companies can save money, time and effort and ensures that the final problem will have a demand in the market.
Real life examples of companies which rose to success with the help of MVP include:
- Zappos.com: This online shoe store started with a simple website that featured pictures of shoes from a near-by physical shoe store. Once the pair of shoes was bought, the owner went to the physical store, bought the shoes and sent them.
- Dropbox: The developers shared a 4-minute video showing how to use the product before the service was actually available. This helped the company increase the market’s excitement – overnight, their beta list increased from 5000 to 75000 people.
- Airbnb: Airbnb started with the owners inflating an air mattress in their apartment and renting it out. Once they saw that there is a demand for peer-to-peer apartment/bed renting, they started developing the website. The website accumulated some interest, but at one point the growth decreased – the owners recognized that the customers went for the apartments that had better photos, so they themselves went to apartments in New York City and taught the leasers how to take better photos.
The conclusion of the MVP is that this methodology helps the entrepreneur save resources and develop a product that has real market demand. Once again, the “Get out of the building” mentality needs to be applied in order for the MVP to be successful.