- How can startups benefit from MVP?
- Step by step: successful MVP
- A list of reasons why developing an MVP is so important for your startup
- Start working on your MVP and join top companies
MVP (a Minimum Viable Product) is a process that includes keyproduct features that enable customers to use and provide feedback to help your business work on future product development. The goal is to get as many valuable observations as possible from customers with as little effort as possible on the part of the development team.
It is a great alternative to avoid unnecessary work that early customers may not appreciate. Instead, developers adopt new product versions according to feedback and comments received from customers to make sure the latest version meets customer requirements. Sounds great, doesn't it?
Nevertheless, building an MVP is a challenge. To make it successful, you need to be sure of the right direction of an MVP development and avoid common mistakes during the process. Read on to find out if an MVP is right for your business.
How can startups benefit from MVP?
Typically, to afford the product development process, startups look for investors to help cover their expenses. To do this, they must offer real value, a reliable design, and meet market demands. Ideas as innovative as they are may not be enough to convince investors to risk their resources. They need to interest the target group and offer them the solutions they have been looking for.
A minimum viable product is the fastest way for a startup to release a simplified version of the product to the market and test whether its idea actually attracts customers. One of the main benefits of issuing an MVP is that it often allows companies to be the first to reach a particular market and gather feedback to develop an effective business model.
The most important benefit of developing an MVP is knowledge. The information collected by the company and confirmed assumptions will give you a competitive advantage in a given market. It allows startups to develop in the right direction based on a verified business model, working on a product that has already been partially accepted by the target clientele. Your startup can also work on a unique value proposition during this process.
A Unique Value Proposition (UVP) or USP, a Unique Selling Proposition, is a statement that clearly presents the potential customer with the benefits of your product. UVP contains more information than a tagline, for example.
Step by step: successful MVP
Step 1: Research
One of the key elements of any successful MVP development is to research first to understand customer requirements and your specific market. At this stage, the key is to start direct communication with potential customers to learn about customer behavior, set patterns, and create a customer profile. This will help the development team set the right direction when working on the MVP and later announce the finished MVP.
During extensive research, startup members should endeavor to gather information on:
- Serviceable Available Market (SAM),
- Total Available Market (TAM),
- Serviceable Obtainable Market (SOM).
This information will help your company verify the business model and build a competitive advantage strategy.
Step 2: Competitor Analysis
The next step in working on the MVP is to conduct a competitor analysis. It will help you find the right direction of development, an approach that will distinguish you from the competition on the market. You may find a gap that has not yet been filled.
When conducting deep competitive analysis, the best approach is to consider as many variables as possible. Start by identifying your close competitors. What is their positioning, customer segments, niches, types of the market?
Then start working on the perceptual map. It should contain all the necessary aspects, such as price-performance ratio, etc.
Now that you've established what aspects are essential, you continue to thoroughly analyze your main competitors. Check their pricing and see if you can offer the same value for a lower price. Look carefully at their opinions from your target audience and evaluate the level of customer satisfaction. Learn from their mistakes.
Finally, analyze the presence of competition on social media and advertising channels. Ensure that your promotion strategy is unique and easily distinguishable from the competition. Decide which distribution channels are appropriate for your product, verify them, and run tests.
Step 3: Make changes
While your team is working on a minimal viable product, there is still room for adaptation. As the rate is still relatively low, you can afford to make changes quickly and release new versions of your product for feedback.
Early adopters will most likely suggest some changes to help you improve your product and ultimately achieve the final MVP that meets the needs of your target audience. Adaptability is your advantage in the marketplace because your competitors cannot make changes so quickly and so often.
Step 4: Evaluate your resources
To get your business going and make sure your MVP is a success, you need to calculate all costs and determine if you can take it long enough for the project to take off.
The main costs include wages, administrative fees, technical architecture, insurance, patent, etc. Make sure your startup has enough money to cover it all until adequate financing can be obtained.
So, once you've learned the most important steps while working on a minimal viable product, check out the list below to understand why it's so crucial to your startup. These are the reasons why you shouldn't have any problems finding investors after launching your MVP!
A list of reasons why developing an MVP is so important for your startup
1.Faster release on the market
It can take years to develop an advanced product full of features and an intuitive user interface. This means high costs for the process and a huge risk of potential losses. Few startups can afford such a move.
Thanks to an MVP, your company can quickly and relatively cheaply launch a product and verify its potential in a given market. Moreover, accelerating the development process puts your company ahead of the competition!
2. Seed funding
With MVP, you can assess the reaction of your target group and its value in the market in advance. The real-time data feedback you get is a great argument to use when negotiating with investors.
Potential investors can analyze ROI (Return On Investment) based on the data you provide - not just your words. This is a huge advantage when looking for seed funding.
3. Affordable process
Creating the perfect product right away is simply too expensive for most startups. Creating a minimum profitable product enables companies to obtain minimum start-up financing faster to cover the development process costs and then upgrade it to an advanced, final product.
4. Less risk
Working on a new, innovative project involves many risks. These include changes in consumer demand, market fluctuations, and competitors' activity. MVP significantly reduces risk with lower investment and quick feedback from early adopters, allowing you to create a product that will for sure meet the needs of your target audience.
Start working on your MVP and join top companies
Companies like Spotify, Amazon, Air Bnb, and Dropbox started by developing a minimum viable product. That is how they have managed to build excellent products that serve millions of users and put them at the forefront of their field.
Getting customer feedback before building the perfect product is of great value to your startup and could be what will determine your project's success. It will help you attract investors who will make an informed decision based on the return on investment analysis.
Our team can help you develop your product strategy and build a reliable business model that minimizes risk. We are experienced in product design and custom development of software. If you want to start turning your ideas into a successful product, contact us!