In the world of product development, the term MVP, or Minimum Viable Product, plays a critical role, especially now that development costs have skyrocketed and products need to be tested for viability before investors are willing to go all-in with their savings.

Let’s break down what an MVP is, why it’s important, and how it can benefit a business or startup.

What even is an MVP in the first place?

Think of the most basic version of a product that is still functional enough to offer value to its target users.

This product will contain only the core features which define its purpose, leaving out any additional features or enhancements that can be added later. The goal is not to create a perfect product right away, but to get something in front of users as quickly as possible so you can gather feedback and validate your idea.

Obviously, the question you’re looking to answer is simple: Is anyone even willing to pay for the features of this software?

Key Characteristics of an MVP

The whole point is to keep things simple, your final product may look very different when it is complete, but at this stage we’re going only going to focus on launching a usable product as quickly as possible.

1. Core Functionality: An MVP focuses on solving the primary problem that the product is designed to address. It is the bare minimum version of the product that is usable by customers.
2. Quick to Market: The development is typically faster and less expensive than building a fully-featured product, because only the most essential components are developed first.
3. Feedback-Oriented: You will be deigning everything to be tested by early adopters and to gather feedback. This feedback informs further development, helping to shape future iterations of the product.
4. Iterative Process: Once the MVP is released, it’s not the end of the journey. Based on user feedback and data, the product is refined, new features are added, and the product evolves in response to market demand.

Why is an MVP Important?

You have developers, you have the funds, but you’ve been advised to hold yourself back, why? Wouldn’t a completely developed and functional platform have better odds of gaining customers?

1. Risk Mitigation: Building a complete product is expensive, time-consuming, and a process that does not have a guaranteed return. By releasing an MVP first, you reduce the risk of investing a large amount of resources into a product that the market may not need or want in the first place. This approach lets you test and adjust before committing to large-scale development.
2. Validating Ideas: Many entrepreneurs or businesses have great ideas but cannot be certain whether there is real demand for them. An MVP helps in validating the product’s core assumptions. If it is successful and receives positive feedback, then you have evidence that there is market interest and demand for the full product.
3. Cost-Efficiency: Building a fully-featured product without knowing if it will succeed can lead to irrecoverable financial damages. Your focus should be on building just enough to test the waters, saving time and money in the early stages.
4. Early Customer Engagement: By releasing an MVP to a group of early adopters, companies can build a customer base before the product is fully developed. These early users can offer valuable insights into what features are most important to them, what works, and what doesn’t.
5. Faster Time-to-Market: Getting to market quickly allows you to start competing and learning from competitors sooner. Early entry provides valuable opportunities to build brand recognition and capture market share.

MVP vs. Prototype vs. Beta

It’s essential to distinguish between an MVP, a prototype, and a beta version:

• Prototype: A prototype is often an early, non-functional version of a product meant to demonstrate the design and concept. It’s not intended for use by customers but for internal feedback or investor presentations.
• MVP: An MVP is a functional version of a product, albeit with limited features. It’s intended to be used by actual customers and provides real value, though with a lean scope.
• Beta: A beta version of a product is typically a more developed version than an MVP, and it is often released to a wider audience for further testing. While an MVP is about getting feedback on core functionality, a beta test focuses on refining the product with more features and a broader user base.

Examples of MVPs

Many successful companies started with MVPs that evolved over time. Here are a few examples:

1. Airbnb: In its early days, Airbnb founders simply created a basic website offering rooms for rent, which they initially tested with friends and acquaintances. The MVP did not have sophisticated features but was enough to validate the idea and gain user feedback.
2. Dropbox: Dropbox initially released a video explaining how their file-syncing product would work. Instead of building the full product upfront, they gauged user interest and validated the concept with just the video, which was their MVP.
3. Instagram: Instagram started as a simple photo-sharing app with basic features. It didn’t have all the filters and social features that exist today, but it allowed users to take and share photos, which proved to be the core value of the app.

How to Build an MVP

Building an MVP involves several steps:

1. Identify the Core Problem: Understand the problem you’re trying to solve and what your users need most. Your MVP should focus on solving this core issue effectively.
2. Map Out the Essential Features: Based on the problem, define the simplest set of features that your MVP must include. These features should directly address the problem and provide enough value to users.
3. Develop and Launch: Create the MVP with minimal resources, focusing on the core functionality. Launch it quickly, and keep the process as lean and agile as possible.
4. Gather Feedback: Once the MVP is in the hands of real users, actively seek feedback. Analyze their usage patterns and conduct surveys or interviews to understand their experiences.
5. Iterate: Use the feedback to refine the product. This may include adding new features, fixing issues, or adjusting the product based on real-world usage.