Traction, scale, value-creation. Digital products need to have a strong product-market fit to be able to gain users, build a user base and convert users into customers driving a sustainable business model. The old development methods of waterfall and gates assumed you knew everything you needed to know about a product’s value proposition before it was launched. That is rarely the reality for innovative products. As a result, startups and large organisations are finding that using Minimum Viable Product development methods gives them the feedback and insight they need to iteratively develop better digital products faster.
A Minimum Viable Product (MVP) is a development approach in which new business ideas or products are developed with the least number of features required to satisfy its users. The subsequent set of features are only developed after feedback from those initial users. This concept was popularized by Eric Ries, a writer and consultant to startups. The three elements of an MVP are: - It has enough value to initially gain users or buyers. - It shows potential to retain early users.. - It provides a feedback loop to guide future development.
Nobel prize winner Daniel Kahneman researched and revealed a flaw in our decision-making he called the planning fallacy: That you make a plan, which is usually a “best-case scenario”. Then you assume that the result will be exactly according to plan, even though you really should know better because the outcome is nearly never exactly according to plan.
When building a new product or service, or even extending it into a new area, the business development research pre-development only provides enough insight to understand that there might be a need or want to cater for. It often doesn’t illuminate how it should be built to provide the desired user value and be sticky enough to keep users coming back to build a sustainable model.
Launching early and with less is ultimately about getting feedback from users. Rather than working in a waterfall workflow where the end-product is predetermined before launch, Minimum Viable Product development is built on an agile or iterative process. Allowing each iteration to incorporate the learnings and data from the previous iteration’s use by customers. Those insights can change what gets built next, or direct existing product features to be redesigned, resulting in a closer and faster product-market fit.
Risk in new product development can be seen from two perspectives. Risk of loss of investment, that is sunk costs in a product that doesn’t create value, get used or bought. The other can be seen as time to market, establishing a brand and capturing any first mover advantage. Minimum Viable Products reduce risk by minimising the amount of development required before a product is put in front of potential users and customers. Less is invested before you start to understand how the market reacts to your product. This feedback results in more decisions and changes along the way but each of those is of smaller importance to the whole, taking the pressure off any one milestone or team member, and increasing the likelihood of developing the product in the right direction.
Startups and tech companies have popularised the Minimum Viable Product approach. Frequently both capital and time poor, they race to build something that has traction and can scale. Some startups are building innovative products that solve customer problems, and create new markets or categories, without established rules or best practices. This makes customer feedback critical to directing how the innovation can best fit their needs. Other startups are more incremental in their nature, providing digitised improvements on existing solutions. They too benefit from understanding how the digital translation is best applied to their customers’ problems. We've worked with startups across various stages from inception to late-stage to conceptualise and develop MVPs across sectors ranging from health to transportation, robotics to retail.
The MVP methodology is a great way to enable large corporations to quickly execute on innovation initiatives by avoiding internal I.T bottlenecks. There is often a desire to build new products in-house, to the pride, sense of ownership and even secrecy surrounding new product development. However when the internal team has their development backlog filled to the brim and their priorities on migrations and business as usual, innovation initiatives have a hard time getting resources - slowing down speed to market. Building an MVP with an external partner provides market intelligence critical for decisions around an initiative's continuation and future investment. It also gives time to build and scale internal teams to take a handover of the MVP as it’s ready to graduate from innovation to ongoing product.
At the heart of a MVP is the concept of minimum. Answering the fundamental questions - Where do we stop? What’s the first iteration? What’s enough? - are not easy. A first iteration can sometimes be too scant to give real insights into whether the new product will create value. Prototyp’s experienced product developers looking at your pre-development research will help make answering these questions easier.
Critics of the MVP approach will often find fault in that releasing a slimmed-down version of the final product will show (potential) competitors that you’ve identified a market opportunity that you’re planning to capitalise on. First mover advantage isn’t created in speed to first MVP, but rather your speed through iterations. How effectively you can apply the feedback into the next iteration to improve your product. So an important part of winning any competitive battle is to have an understanding of your competitors’ development processes and resources and to ensure you’ve invested appropriately to outmaneuver them.
Swedish startup MindMore dreamed up a new tool to increase people’s access to testing for & improve treatments for stress and memory related illnesses. Over a single summer with an effective iterative and agile project workflow, we helped them create ‘Minnemera’. This MVP ensured the first version of the product met the needs of patients and physicians and played an important role in raising capital to scale the product. Read more about how you create an MVP for a startup here: https://www.prototyp.se/en/cases/startup-minnemera
Are you planning to break new business ground? Considering your options on building v1 of your new digital product? Get in touch with us and we’ll demo some of our digital products created using our MVP approach.