What is a Minimum Viable Product (MVP)?

Eric Ries first introduced the minimum viable product concept as part of his Lean Startup methodology. He describes an MVP as the version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least amount of effort.

Simply put, a minimum viable product is the most basic version of a product that contains enough features to address just the core needs of early adopters. By focusing on essential functionalities, an MVP enables businesses to test their assumptions, gather user feedback, and iterate on their product to meet market demands. Because the agile methodology is built on user input led validation and iteration, the MVP has an important role to play in agile development.

How to develop a Minimum Viable Product?

As the first step, you should start identifying specific problems you want to solve or improvements you want to make. This involves conducting thorough market research, understanding customer pain points, and analyzing competitors' offerings. By identifying a clear pain point, you can ensure that the MVP resonates with the target audience.

Once the problem has been clearly defined, the next step is to prioritize the features that will be included in the MVP. It should prioritize the core features that deliver the most value to users. You can base these decisions on a number of factors such as user research, competitive analysis and implementation costs.

After establishing the feature set, the development team can start building the MVP. The minimal viable product should be simple enough for the users to interact with it seamlessly. The user experience should be intuitive and straightforward, enabling early adopters to understand and use the product with minimal guidance. You should therefore focus on delivering a functional product with a minimalistic design. 

Don’t forget that the product also has to be viable - an MVP should not be a combination of incomplete tools and features, it must enable customers to complete a task or project and deliver a high-quality user experience.

Benefits of Using a Minimum Viable Product Approach

The utilization of a minimum viable product approach offers several benefits:

• Market validation

One of the primary reasons why an MVP is crucial for business success is that it helps validate the market demand for a product or service. By building a basic version of the product and releasing it to early adopters, businesses can gauge customer interest and gather valuable feedback. This feedback allows them to make informed decisions about the future direction of the product, ensuring that it aligns with customer needs and preferences.

• Faster time to market

One of the most significant advantages of using a Minimum Viable Product is the speed at which you can get your product in front of the users. By avoiding time-consuming development of advanced features and focusing on the core value proposition, you reduce development time and can launch sooner. This rapid launch enables you to gain a competitive advantage by being the first to address a particular need in the market.

• User-centered design

With a Minimum Viable Product, you're able to gather real-world feedback. The feedback loop is invaluable, as it helps you understand how well your product addresses users' needs and what improvements are necessary. It's a direct path to learning and adapting. This customer-centric approach results in products that are more likely to succeed in the market.

• Reduced risk

Since you're not heavily investing in a fully-featured product from the outset, you minimize the risk of investing time and resources into a product that may not resonate with the target audience. If the MVP doesn't resonate with users, it's easier to pivot or make changes without major losses.

• Cost-effective development

Minimum Viable Products are cost-effective because they require fewer resources to build and maintain. By prioritizing essential features, you can allocate your resources efficiently and avoid investing in unnecessary functionalities.

• Iterative improvement

Rather than building a product in isolation and hoping for the best, MVPs encourage continuous improvement. You can release subsequent versions of your product with added features, gradually improving it based on user feedback.

Challenges and Misconceptions of MVPs

While an MVP offers numerous benefits, it also comes with its own set of challenges, limitations and misconceptions:

• Managing customer expectations

One of the main challenges is managing customer expectations. Since an MVP is a stripped-down version of the final product, customers may have certain expectations that are not met initially. Proper communication and setting realistic expectations are crucial to mitigate this challenge.

• Risk of competition

Another limitation is the risk of competition. By launching an MVP, you expose your ideas to potential competitors who may replicate or improve upon the concept. To counter this, it is essential to continuously iterate and improve the product based on user feedback to maintain a competitive edge.

• Impression of a low-quality product

Some people might think that an MVP is synonymous with a low-quality product. While an MVP may have limited features, it should still meet a certain level of quality and usability. The focus should be on delivering value to early adopters, not compromising on the overall user experience.

• “MVP is a one-time release”

Another misconception is that an MVP is a one-time release. In reality, an MVP is an iterative process that involves continuous improvements based on user feedback like we mentioned earlier. It is an ongoing cycle of testing, learning, and iterating to ensure that the product evolves and remains relevant in the market.

Examples of Minimum Viable Products

Several successful companies have decided to go with the MVP approach to launch their products:

One notable example is Airbnb, which actually started off as 2 designers trying to cover increased rent by creating a basic website and offering 3 air mattresses and breakfast in their apartment during a design conference. It then became a website that enabled homeowners to rent out their spare rooms. By focusing on the core functionality of connecting renters with hosts, Airbnb was able to validate its business model and keep expanding its offering over time.

Another great example is Dropbox, which launched with a basic file-sharing feature before adding more advanced functionalities. By starting with a minimalistic approach, Dropbox was able to attract early adopters and gather valuable feedback to shape its product roadmap.

Thinking about physical MVPs, during one of the business trips, Raido stayed at a hotel where he found this interesting product shown on the images below. It is a ladder for emergency exit in case of a fire. A great example of an older MVP as it addresses the core problem which is getting out of the building during fire but it doesn’t have any extra features like comfortability, modern look etc. You can also find our thoughts on the product in our LinkedIn post where we covered it in a bit more detail.

Conclusion

In today's competitive landscape, the ability to adapt and innovate quickly is the key to success in product development. A minimum viable product (MVP) is a powerful tool to achieve this - by focusing on essential functionalities and gathering user feedback, it allows you to validate your assumptions, minimize risk, and make data-driven decisions. Although it does come with its own set of challenges and limitations, when implemented effectively, an MVP can lead to accelerated time-to-market, reduced development costs, and increased customer satisfaction.