An MVP (Minimum Viable Product) is a product equipped only with basic features that should be enough to meet the needs of early adopters and attract their attention. For instance, it can be a tool with a single function. Building an MVP is crucial for tech startups, and here is why.
- Building an MVP allows validating the idea in actual market conditions and understanding if the final product will be in demand.
- Developing an MVP takes less money, time and effort than building a final product — therefore, you will enter the market and start earning money faster.
- Releasing an MVP helps detect possible risks and avoid failures (or losses).
- You get actionable insights into features your final product should have and what to fix.
- A functional MVP that has already gained some loyalty will help you to attract investors — it will help prove to them that the project is worth funding.
- You attract potential customers who will be looking forward to the final product release.
On the other hand, if you skip the MVP stage and immediately proceed with developing the final product, you may implement a lot of unnecessary features, losing time and money. After the release, you may even find out that customers don’t show sufficient interest in your product. Developing an MVP is beneficial not only for startups but also for companies that already have loyal audiences and are unsure about some of their new ideas.
Developing an MVP doesn’t always mean software development: for instance, instead of a basic app, you can create a landing page or video explaining its main features and use cases, and make a decision regarding further development on the basis of collected feedback. That was what Drew Houston, founder of Dropbox, did — he started with building a prototype, then recorded a video showing the benefits. Viewers could also join a waiting list for the private beta, and the video was so compelling that the list grew from 5,000 to 75,000 people overnight.
Such minimum viable products are low-fidelity MVPs. They don’t require complex development and help identify clients’ needs, though they tend to bring less accurate results. This category includes landing pages, videos, crowdfunding and advertising campaigns, presentations, polls, and blogs. Another category is high-fidelity (and more complex) MVPs. Such products allow testing value propositions, finding primary buyers, and identifying potential effective strategies. For instance, a basic app with a single feature is a high-fidelity MVP. Low and high-fidelity MVPs can be combined: you don’t have to focus on just one option. You may start with building a low-fidelity MVP, and then proceed with developing a high-fidelity one.
Reasons Why Startups Fail
Unfortunately, even great ideas may not realize their potential. The infographic below illustrates the study provided by CB Insights and shows the top 20 reasons for startup failures. Please note that many companies indicate multiple reasons, therefore, the total percentage exceeds 100%.
Building an MVP cannot prevent all these failures, but it allows identifying if there is a market need for the product and detecting potential risks. Besides, it helps attract investors and decide on the final product features. This means that with MVP you can avoid some of the above-mentioned problems, such as missing market need, user-unfriendly product, and lack of investor interest.
Stage 1: How to Build a Minimum Viable Product (MVP)
The product development process consists of several stages, and building an MVP is the first of them. We will review the entire process beginning with building an MVP.
Step 1: Do Your Homework
Conducting a thorough research is the first thing that you should do, so here are some questions for you to answer:
- Is there a market need for your product?
- Who is your target audience?
- What would your target audience value the most in the future product?
- Are there any similar solutions on the market? If yes, what market shares do your competitors have? What prices do they offer? What audiences do they focus on, and how do they attract customers? What channels do they use?
Step 2: Conceptualize Your Idea
With all the essential knowledge in mind, proceed to the next step — conceptualizing your idea.
- What value will your product offer to users?
- How will your product benefit users?
- Why may users want to buy your product?
Based on the answers, you can create a low-fidelity MVP (for example, a presentation or a landing page) to test your concept and figure out if it meets the needs of potential customers.
Step 3: Create a Product Roadmap
After the idea is conceptualized, and a low-fidelity MVP turns out to be promising, you can start working on the product roadmap — a strategic plan of your product development, and which consists of the following points:
- Vision — the future state of the product and the problems it is going to solve
- Strategy — a plan explaining how exactly your company is going to achieve the vision
- Goal — a time-bound purpose that a specific metric can measure (the metric should also be mentioned)
- Initiatives — themes consisting of product features that should be implemented in order to reach the goal
- Product features — the list of basic functionalities that solve the user problem
- Time frames — approximate dates or time periods for specific deliverables to be shipped
Step 4: Prioritize the Features
Make sure to prioritize the features to understand which of them to add to an MVP. Remember that an MVP requires only the features with the highest priority — those ones that will make it functional and solve the main users’ problem. Other features can be implemented later (if the idea is validated), so that after all the iterations you will get the final product you aimed for.
Step 5: Code It
Focusing on the selected features, build a minimum viable product. Keep it basic, but design it properly. A poorly designed MVP may easily scare potential customers away, even if the product itself is attractive to them. So pay attention to the design — it can be simple, but an MVP should still look good and be convenient to use. Besides, do not forget about testing — minimize the number of bugs to ensure a good experience for the MVP users.
Step 6: Iterate According to Feedback
After the MVP is released, gather feedback from its users, implement the necessary changes and move to the testing stage. Then analyze the feedback on the updated version and, if necessary, make more changes. Repeat these steps until your MVP is perfect. Then, if the idea is validated and users get interested, you can present the MVP to investors. Show them real user feedback and metrics to prove that your project is going to be successful, and provide a product roadmap to explain how you are going to complete it. Your chances of getting funding will be higher if investors know that you have a detailed and clear plan for product development.
Stage 2: MMR and MMP
After the MVP completes the mission and the idea is validated, it is time to proceed to the next steps of the product development process: MMR and MMP. MMR stands for Minimum Marketable Release — a fully functional release of a product that meets the current user requirements and needs, and shortens the initial time-to-market. Basically, that’s the subsequent “form” of an MVP.
MMP is a Minimum Marketable Product, the first release of an MMR with a must-have functionality. Its purpose is to document feedback from real users and start monetizing the product. The risk of loss during this stage is relatively low since the launch of an MMP requires minimum investments.
Stage 3: MMF
MMF stands for Minimum Marketable Feature, a fully functional single feature providing real value to end-users. This stage is crucial, as customers expect not only bug fixes but also completely new features that will allow the product to solve their problem faster and more effectively. Therefore, the primary mission of an MMF is to increase customer loyalty and generate income. Besides, an MMF helps attract funding from investors since each successful MMF can increase the number of users willing to pay for the product. One MVP can have several minimum marketable features.
Stage 4: MLP, MDP and MAP
You are approaching the final product — MLP, MDP and MAP stand for Minimum Loveable, Minimum Delightful and Minimum Awesome Product respectively. This stage involves updating the design and adding features that will improve user experience and make the product not only useful but also special and fascinating. In simple terms, they should make the product so cool, that customers will want to share their experience with their friends and families, and become even more loyal. For you this means a larger audience and higher income.
During this stage, involve more UI/UX experts and developers to create an eye-catchy design and implement new features quickly. Make sure to collect the feedback continuously — this will allow you to react and make changes promptly. Moreover, feedback will perform as the evidence and prove to the investors that the product is successful and worth further investments.
How Much Does it Cost to Build an MVP?
Unfortunately, there is no exact answer to this question — the cost of MVP development highly depends on the complexity of the product. For example, building a landing page will be cheaper than developing a simple app. On average, development of a low-fidelity MVP costs around 5%-15% of a full scale beta version of the product.
However, such MVPs may become obsolete, as they are too basic to serve as a foundation for a full scale version of the product. For instance, you built a basic web-system with one or two features and a very simple architecture. It is perfect for testing the demand, but you won’t be able to add more features in the future without changing the architecture and hence, redoing the entire codebase from scratch.
Other factors affecting the cost of building an MVP include the required technology stack, the team expertise, and the engagement model they offer. From our experience, value-based engagements offer the best results and often grow into successful long-term partnerships.
MVP Development Options
There are three ways to build an MVP: with your in-house team, freelancers, and an agency. For startups, the latter option is usually the most effective, but everything depends on the company’s objectives, skills, and resources. Keep these factors in mind to make the right choice and remember that you can also combine several development options. For example, you can build an MVP in-house but hire a freelancer to complete a specific task, or entrust an agency with most of the development tasks, while your in-house team will be responsible for the rest of them.
Developing an MVP with Your In-House Team
- Your product is developed by experts who have already been working with each other (in case you don’t have to hire the entire team from the ground up).
- Direct and fast communication minimizes the risk of misunderstanding.
- Higher flexibility — unexpected changes can be implemented faster.
- You have complete control over all the processes.
- No language, cultural, or time zone differences, which is vital for effective collaboration and communication.
- An in-house team has a better understanding of the company’s objectives and values.
- A lot of expenses to cover: salary, taxes, insurance, office rent, equipment, and tools.
- You may have to hire more experts to deliver all the required features.
Developing an MVP with Freelancers
- Hiring freelancers is usually cheaper than developing MVP with an agency or your in-house team.
- Freelancers are often motivated to carry out their duties faster to start working on another project. This means that your MVP may be built within a shorter period of time.
- For completing a particular non-recurring task, it’s usually more beneficial to hire a freelancer with relevant skills than an in-house employee.
- Most freelancers do their best to deliver high-quality products, as their relevance depends on the reviews provided by their clients.
- Managing freelancers takes a lot of time and effort, and there is no guarantee that they will work coherently.
- It may be challenging for you to hire the right freelance developers, as you have to decide on the stack on your own.
- You may spend a lot of time on finding all the required experts, which prolongs MVP development.
- Freelancers may not agree to long-term cooperation — after completing one project, they often switch to a different one. So even if you find some bugs in the developed product, you may have to hire another freelancer to fix them.
- Freelancers may leave the project in case something goes wrong.
- Potential security issues — to prevent them from happening, make sure to prepare and sign an NDA contract.
Developing an MVP with an Agency
- Technical expertise — the agency designs the system properly, implements all the essential features, prevents potential issues, and brings your idea to life.
- You work with a full-stack delivery team that, apart from developers, has BAs, UI/UX designers, QA engineers, Blockchain developers, DevOps, SEO specialists.
- The core features are implemented quickly, and the MVP is launched faster.
- Outsourcing MVP development or cooperating with an agency (while some of your employees also take part in the process) is often less expensive than hiring new team members.
- The presence of a strong technical team on your side may be a crucial factor for some investors.
- The agency helps you move further, transform your MVP into the required final product, and support it afterward.
- You can count on a solid team of experts who have already been working with each other.
- Your internal team gets an opportunity to focus on other business processes.
- It may be challenging to establish proper communication if the agency is located in a different time zone.
- Potential lack of control.
- Potential security issues (sign an NDA agreement to avoid them).
- As Gary Vaynerchuk says, “Ideas are shit, execution is the game”. When you entrust an agency with execution and building an MVP, your idea, even if it’s brilliant, may be implemented not in the way you expected. Effective communication and the involvement of your team in the development process will help prevent this issue from happening.
When your company is a startup, you should start with building an MVP to validate your idea, get feedback from users, and convince investors to provide you with funding. Make sure to add only core features to an MVP. This way, you enter the market with minimum risk, and once you see the product is well-received, you can move on with all the fancy features to step up your game.
Then, if the idea is validated, you can move to the MMR and MMP stage and start monetizing your product. MMF is the next step involving adding new features to generate more interest and increase customer loyalty and income. During the MLP, MDP and MAP stage you should make your product awesome. Work on the design and implement more features to turn the product into something absolutely special and memorable.
To increase your chances of success, consider hiring a skilled team that has already worked with MVPs. Our dedicated Redwerk team has experience with all the product development stages, including MVP, and provides support to startups, mid-sized and large-scale businesses.
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