Starting a new venture represents an endeavour that is both exciting and risky. While every entrepreneurs’ dream is to build the next big thing, the reality is that startups often face significant challenges and obstacles on their path to success. In fact, statistics show that a large percentage of startups fail within their first few years of operation. However, one effective strategy that helps you eliminate these risks and increase the chances of success is the approach of starting out by building an Minimum Viable Product (MVP).
In this blog, we will explore the purpose of MVPs, an essential concept that startups use to validate their ideas and minimize the risk of failure. We will dive into the different types of MVPs and how they can empower startups to make informed decisions and pivot effectively. Additionally, we will discuss the reasons behind startup failures and how a strategic approach to MVP development can mitigate those risks.
What is an MVP?
It is best to describe an MVP by using the definition coined by Eric Ries, the author of “The Lean Startup”.
“A Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
– Eric Ries
Instead of investing significant time and resources in building a fully-featured product right away, strategic startups focus on developing a simplified version of their idea that addresses the fundamental pain points of their target audience. By stripping away unnecessary features, an MVP enables entrepreneurs to quickly test their assumptions and hypotheses, gather real-world data, as well as gain quick insights into which features and functionalities resonate most with their users.
The primary goal of an MVP is to validate or invalidate key assumptions about the market, user needs, and the viability of the business model itself. By launching an early version of their product and obtaining user feedback, startups can make informed decisions about the direction of their development efforts, while also involving users in building the product from the start. This iterative approach not only reduces the risk of building a product that no one wants, but also empowers entrepreneurs to pivot, adapt, and improve their offerings based on real user data.
Types of MVPs
MVPs can be categorised into two main types: low-fidelity MVPs and high-fidelity MVPs. Each type serves a specific purpose and involves different levels of complexity and development.
Low-fidelity MVPs are primarily aimed at understanding customers’ problems and finding efficient solutions. They are designed to quickly validate ideas and gather essential insights while keeping costs and development efforts to a minimum. The primary objectives of a Low-fidelity MVP include identifying customer challenges, checking the viability of the problem being addressed, and finding efficient solutions. Examples of Low-fidelity MVPs include landing pages, marketing campaigns, email campaigns, single-feature MVPs, pre-order MVPs, and concierge MVPs.
On the other hand, high-fidelity MVPs can help you figure out how much are customers willing to pay for the product. Such MVPs require complex development and aim to provide a more refined and feature-rich experience to users. The objectives of a high-fidelity MVP include engaging early adopters, determining the willingness of customers to pay for the product, gathering essential insights for optimizing business growth and marketing strategies, as well as refining the overall user experience.
To better illustrate the differences between low-fidelity and high-fidelity MVPs, the following table provides a comparison:
Types of low-fidelity MVPs
Low-fidelity MVPs offer a cost-effective and rapid way to validate ideas and gather user feedback. They involve creating basic prototypes or simulations to test the core value proposition of a product.
In order to get to know your customers prior to creating a low-fidelity MVP, you might want to consider the following:
- Conducting customer interviews – conducting unscripted interviews is a great way to gather information about the product and the problem it aims to solve. This method provides valuable insights into customer requirements and preferences.
- Writing blog articles – setting up a blog to validate your ideas within the target market and engage in two-way communication with potential customers can help you figure out what are their exact needs and expectations.
- Exploring existing forum threads – participating in existing conversations on the subject helps you directly learn from potential customers, understand their problems and gather further insights.
Now, when you have some basic information about your customers, let’s explore some common approaches to creating a low-fidelity MVP:
- Split Testing: Utilizing analytical tools to measure user reactions to various changes in product design, website, pricing, or other elements. Split testing enables comparing different versions and identifying the one that performs best.
- Explainer Video: Developing a short, simple video to explain the features and benefits of the product and assess user traction and interest. Video-based MVPs are effective in generating awareness and determining user engagement.
- Paper Prototypes: Creating low-fidelity sketches of a user interface to involve users in shaping the product’s UX and features. Paper prototypes allow quick modifications and testing of the product before investing heavily in design and development.
- Ad Campaigns: Running market validation surveys through ad campaigns on platforms like Facebook and Google. Demographics can be targeted to discover the most appealing aspects of the product, facilitating split tests.
- The ‘Fake Door’ approach: Measuring interest by directing customers to a landing page for a product or service that is not yet available. By creating a simple web page with key information about your product, pricing, and a call to action, you can test the market demand and collect user contact details. The number of visits or interactions with the page indicates demand and potential customer engagement. You can even experiment with multiple versions of the landing page to test different messages, layouts, and elements for optimal performance.
- Audience Building: Building an engaged audience before creating the product to gain insights into demand and interest. Engaged audience members can participate in tests, interviews, and questionnaires to contribute to the product’s value.
- Micro-Survey: Conducting short surveys with one or two questions to obtain reliable answers and specific open-ended feedback. Micro-surveys have higher response rates and provide valuable insights for decision-making.
Types of high-fidelity MVPs
High-fidelity MVPs aim to provide a more refined and feature-rich experience to users. They involve building functional prototypes that closely resemble the final product. Let’s explore some common types of High-Fidelity MVPs:
Digital Prototypes: These involve creating wireframes, mock-ups, and interactive prototypes created using design tools or prototyping software. Digital prototypes enable startups to showcase the product’s design, user interface, and user experience. They help in validating the product’s usability and identifying any design flaws early on. Tools like Figma, Sketch, and InVision are commonly used for creating digital prototypes.
3D Models: This type of MVPs are particularly useful for physical products that will be later manufactured. The 3D models are created to give a realistic representation of the product’s appearance and dimensions. They allow startups to evaluate the product’s aesthetics, ergonomics, and functionality before investing in manufacturing. Tools like Autodesk Fusion 360, SolidWorks, or Blender are used to design and create 3D models.
Wizard of Oz MVP: The Wizard of Oz MVP creates an illusion of a fully-functional product by manually simulating certain features behind the scenes. It allows startups to test user interactions and gather feedback without investing in the complete technology infrastructure. This MVP is particularly suitable when the startup has a clear understanding of the solution but wants to validate the market demand before fully developing the product.
Concierge MVP: By using this approach, startups provide a personalized and hands-on experience to a limited number of early adopters. This approach involves manually fulfilling the core value proposition of the product and offering a high-touch service. By closely engaging with customers and understanding their needs, startups can validate their ideas, gather valuable insights, and refine the product before investing in automation and scaling.
The “Piecemeal” MVP: This methodology involves leveraging existing tools and services to deliver a functioning product to customers. Startups use a combination of already available technologies and solutions, even if they don’t integrate seamlessly, to provide a comprehensive user experience. By utilizing existing services, startups save time and money on building their own technology and infrastructure, while focusing on validating the product concept.
Crowdfunding: Crowdfunding is a popular method for validating product ideas and raising funds simultaneously. Startups can create a compelling campaign on crowdfunding platforms like Kickstarter or Indiegogo to generate interest and gather pre-orders for their product. This approach allows them to test the market demand, assess customer interest, and secure early adopters while validating the viability of the product itself.
These are just a few examples of high-fidelity MVPs. By providing a more comprehensive experience, startups can gather detailed insights, refine their products, and make informed decisions about future development and scaling strategies.
MVPs in practice
Example – Landing page MVP:
Dollar Shave Club: Dollar Shave Club created an MVP to validate their idea of a subscription-based razor delivery service. Before building a website or ordering inventory, they created a simple landing page that highlighted the benefits of their service and allowed visitors to sign up for more information. The overwhelming response and sign-ups indicated strong market interest, which gave them confidence to move forward with their business.
Buffer: Buffer, a social media scheduling tool, utilized an MVP to test demand for their product. Instead of building the full-fledged app right away, they created a landing page describing the features and benefits of their service. Users who expressed interest were transferred to a “Coming Soon” page containing a CTA. This approach helped them gauge demand and validate their value proposition before investing in extensive development.
Example – Concierge MVP:
Wealthfront: Wealthfront is an automated financial portfolio service that curates investments based on individual interests. Initially, they provided personalized wealth management advice through direct communication with experts before developing their automated service.
Zappos: Zappos, the online shoe and clothing retailer, started as a concierge MVP. Its founder would personally buy shoes from local stores and deliver them to customers, ensuring a high level of customer service.
Example – Wizard of Oz MVP:
Airbnb: Airbnb famously utilized the power of MVPs by creating a simple website that showcased their “bed and breakfast” service, even though they didn’t have any actual rooms to rent out. They tested the market demand and validated the concept before scaling up their operations.
Dropbox: Dropbox has started with a mockup of their file-sharing idea. The prototype appeared functional to users, but behind the scenes, it was manually managed to deliver the intended experience. This allowed them to gauge interest and gather feedback before fully developing the product.
Example – Digital prototypes:
Figma: Figma, a cloud-based design tool, created digital prototypes that allowed designers to collaborate and create interactive design mockups. They collected user feedback, refined the feature set, and improved the collaborative design workflow before launching the full-fledged product.
InVision: InVision, a prototyping and collaboration platform for designers, utilized digital prototypes to enable users create interactive mockups and gather feedback from stakeholders. They used this feedback to iterate on their product and develop additional features.
Example – 3D models:
Tesla: Tesla used 3D models to simulate and refine the design of their electric car technology. These models allowed them to test and optimize various components and gather valuable feedback from early adopters, which influenced the development of the Tesla Model S.
Boeing: Boeing, an aerospace company, extensively uses 3D models to simulate aircraft designs, test aerodynamics, and evaluate the performance of different configurations before investing in full-scale production.
Why should we leverage the power of MVPs?
The beauty of MVPs lies in its flexibility and adaptability. You don’t have to limit yourself to just one type of MVP; instead, you can combine different techniques in accordance to your needs and preferences. Whether you choose low-fidelity options to validate your solution’s viability or high-fidelity methods to obtain real-world feedback, the key is to start testing your ideas quickly with minimal investments.
By leveraging the power of MVPs, you can gather valuable insights, refine your product, and make informed decisions based on user feedback. This dynamic and iterative process allows you to navigate the uncertainties of product development, while at the same time minimizing risks and maximizing your chances of success.
Embrace the diversity of cost-effective MVP options available, and embark on your product development journey with confidence. Whether you start with a landing page, move to a prototype, or follow any other combination approaches to building out an MVP, the goal is to gain valuable insights and pave the way for a successful product launch. So, take the plunge, iterate as you go, and let your MVP guide you towards building a remarkable and customer-centric product!