How to build an MVP: the basics

How often do you find yourself working on a project but not feeling it solves a real problem? I worked on many of those and started doubting some decisions. I was lucky enough to put my doubts into research. Famous works by Eric Ries and Steve Blank (The Lean Startup and The Four Steps to the Epiphany, respectively), helped me understand what was bothering me. I spent thousands of hours writing code for projects that could have been tested with a simple MVP in Google forms.  For me, it wasn’t just a new challenge. It was something I decided to share further, being an enthusiast of customer development principles.

I plunged headlong into the Lean Startup world, where the MVP was a crucial concept. The minimum viable product requires the least development and can still bring you profit. A minimum of invested time and money — and yet it allows you to test your idea in the actual market. It sounds like a dream, but is it?

So, what is an MVP? And why is it so easy to get lost in terms here? Since I have been engaged in the MVP full-cycle development many times, I will try to share my personal thoughts and experiences. I’m going to help you understand the essence of the concept and share some tips. 

Challenges you’ll face developing an MVP

The MVP launch is associated with a number of challenges. Interestingly, you will have to deal with almost all of them before the development process. 

They depend on your basic understanding of what you are going to get involved in. Therefore, it is important to get to grips with all the definitions from the very beginning.

Difference between MVP and First Version of a Product

The first version of a product differs from an MVP in several crucial points. The MVP is created in order to test the hypothesis you set and analyze your business model; gather some information about your users and even acquire early adopters. The hypothesis should be understood as a kind of “if … then” statement that is based on your market observations or research. It helps determine the purpose of your startup. As a universal example, we can consider the formula: “We believe that the target user will opt for this solution to solve this problem for this reason.” At the same time, you shouldn’t limit yourself to only one hypothesis. The more solutions you assume, the higher the chance that at least one of them will be validated.

On the other hand, when creating the first version of the product, you pursue a goal of making your first profit and testing your product in the real market. The MVP helps you test a particular hypothesis, while the product is aimed at sales and user satisfaction.

Ignorance of the difference between MVP, Proof of Concept, and Prototype

Let’s remember the product creation cycle: idea —> proof of concept —> prototype —> mock-up —> MVP —> full-fledged product. And now, let’s delve deeper. 

An MVP is a working product that has core functionality. It is created to test your hypothesis and business model to survive in the real-market environment. It means that customers actually use it to solve their issues. Therefore, a successful MVP will also bring you first profits and satisfied customers.

Proof of Concept allows developers to try out the basic mechanisms of the product (prior to full-fledged development) without additional risks. The company doesn’t create a POC model to show it to users, it is checked internally within the team. 

A prototype should be created to test the basics, e.g. initial user interface. For this, real people are involved. Their feedback allows you to understand whether you should even do this business.

Ignorance of the difference between these concepts leads to inaccurate priorities, fake goals, and wrong expectations. Understanding the basic concepts will help you avoid situations where, for example, you sought to create an MVP and, as a result, created only a prototype. 

Failure to identify the problem and the correct target audience

You may think that your ingenious idea is enough to achieve success. This isn’t true. The trick is to sell your product to those people who really need it. To do this, you need to determine your target audience and the problem that your product will help them solve.

For this, you need to conduct a thorough study and find out as much information about your potential users as possible. You can start by studying the customers of your competitors: how they behave and what problems they experience. Whether you are creating an MVP or a full-fledged product, the correctly defined target audience and the purpose of your product are extremely important.

Another crucial point is the concept of value. In order to determine what your product will be like in the future and what value it brings, you should conduct a number of problem interviews. You will find out what difficulties people experience in the chosen area, why (from their POV) they experience these difficulties, how they solve this problem (and whether they’re solving it at all) and whether the existing solution completely satisfies them. These questions are part of the customer development process. This process was described by Steve Blank as a 4-step program designed to help you confirm that you’ve correctly identified the needs of users, found a solution to their problem, built a working product based on this solution, and allocated the appropriate amount of resources for the product.

As you understand, if you fail at this stage, your MVP will have a wrong focus. In addition, it will be introduced to people who don’t need it. The result of such an enterprise can be only one — collapse.

It all looks like a big headache now. However, you will understand that it is well worth the effort when you realize the MVP benefits.

Benefits of starting your business with an MVP

First of all, there is no such rule by which you will surely achieve success if you start your business with the MVP. It depends on many factors, and even if all tasks are correctly accomplished, success isn’t guaranteed.

Nevertheless, starting a business project with an MVP is still more reasonable than developing a full-fledged product right away. Why?

Opportunity to understand your audience and its pains better

One of the obvious and most useful advantages of starting with an MVP is that you get closer to your users. Early adopters tend to share their impressions of your product if it helps them solve at least one important task. Having received such feedback, you will be able to make the necessary changes in the future and create a more market-oriented roadmap.

It also happens that the audience you’ve been targeting while creating and promoting your MVP abandons your product. Don’t be upset, try to test your project with a different audience. Negative feedback can be useful too. Thanks to it, you can learn more about users’ pains and problems. You might even think about changing your MVP’s main priorities and goals. 

Potentially acquired customers from early adopters’ group

Early adopters that are ready to give their feedback can be of benefit, no doubt. But it is even better if they eventually get satisfied with their experience and become your first customers.

Creating an MVP is probably the best way to get customers’ support before the product actually enters the market. The main thing here is to not screw up with the value so that adopters would really be eager to acquire your full-fledged product.

Running first marketing channel tests and gathering stats

Let’s face it, you will promote your product in any case. In today’s market, with tough competition, you can’t do without advertising. So, why not start doing this at the MVP stage?

By promoting your MVP, you can test several major marketing channels. Based on the data collected, you can still draw the first conclusions about the efficiency of these promotion methods. The big plus here is that you don’t need huge advertising budgets to promote your MVP. Thus, you also reduce the risk of wasting a large portion of marketing funds.

Verify whether there’s any need for your product 

We’ve already mentioned that the MVP allows you to know your audience and its problems better. In addition to that, you will also understand whether your product is needed in the market and whether there are customers, who are willing to pay for it.

You don’t want to see that the business, in which you’ve invested a lot of work and money, is completely useless. Any business is associated with risk, you know that. However, these risks should be minimized if possible. Developing an MVP, you don’t invest a lot of resources. Still, if done right, the MVP is enough to check whether your idea is viable or not. Perhaps, it will be better to abandon your idea at all. 

Collect proven data for investors to get additional funding

In the end, you will get comprehensive data regarding the launch and performance of your MVP. Clear figures and indicators always inspire confidence and allow you to make transparent conclusions and predictions. Having such data at hand, you will be able to assess how successfully (or not) your MVP operates. Plus, you will understand in which direction you need to move further and whether you need it at all.

Finally, having good rates of conversion, purchases, reviews, or whatever indicators you set, you can hope for fruitful negotiations with investors.

Starting with an MVP: Real examples

Now that the challenges and advantages of launching an MVP are outlined, let’s look at a few examples of successful business projects that started with an MVP. 

• • Dropbox. The Dropbox case is a classic conflict of theories. Nevertheless, I decided to leave it on this list. 
    In 2007, Silicon Valley entrepreneur Drew Houston presented his new product — Dropbox — to the Hacker News audience. You now know Dropbox as a revolutionary service that allows for instant synchronization between devices and cloud storage. Once you upload a file to a folder on your computer, it immediately becomes accessible from all your devices in the cloud. Brilliant.

    Mr. Houston presented his project in the form of a 2-minute video explaining the process. In 2007, this made waves and the company immediately received large investments. The method of presenting your business project as a short video clip was unofficially called the Dropbox MVP. 

     

    I know what you think now. A video clip can’t act as an MVP, because it has no functionality that solves the problem. And I completely agree with you. For many, including me, a classic MVP comes with a minimal set of functionality that allows your target audience to really solve a particular problem. That is why I wouldn’t call the Dropbox video (and even their landing page) a full-fledged MVP. 

     

     However, if we consider an MVP as a means to test hypotheses, then the Dropbox video-clip can be called an MVP. This video tests the hypothesis of a problem and a segment. The response received from the audience showed that the problem described in the video existed. So, this MVP has fulfilled its task./

  •  Zappos . LinkedIn’s co-founder Red Hoffman once said: “If you aren’t embarrassed with the first version of your product — you’ve launched too late.” Of course, this is a joke, but there is some truth in it.  At some point in 1999, Nick Swinmorn was wandering around shoe shops looking for the right pair. Not finding the right shoes, he came up with the idea of ​​selling shoes online.

    However, Nick needed to first test the hypothesis of the segment and whether there were solvent customers. Equipped with a camera, he entered the nearest store and took a few pictures of shoes. After that, he posted the photos on his simple one-page website. After receiving the first order, Nick literally had to go to the store, buy shoes and then send

    them to the buyer. The concept worked. In fact, Nick was losing money on every order. However, his hypothesis of the segment was confirmed — people were ready to buy shoes online.  I, personally, love this example, because it shows how bold and, sometimes, absurd a start of a successful business can be. Zappos launched a shoe store without having a single shoe!

  •  AskTina . The live video chat widget for blogs — AskTina — failed with its MVP. The idea was to establish communication among users via video chats directly on authored blogs, using mobile devices. Sounds good, but what caused the failure? According to AskTina’s founder, they didn’t spend enough time to test the viability of their idea. This could have been achieved through user surveys, but there weren’t enough interviews, and they were conducted inaccurately. 

    In the beginning, two main KPIs were established: the number of sessions per month and paid calls. As a result, AskTina reached the desired number of sessions — 10,000 per month. But users refused to pay for calls. This feature, which the developers relied on, simply turned out to be unnecessary. As a result, the MVP failed since the creators put all their bets on the idea that turned out to be poor.

• Healthcare telemedicine app. Now, I want to tell you about two MVP launches that I personally participated in. The idea of ​​the first project was to provide remote advice between the doctors. It was needed to help the doctor quickly consult another specialist regarding the patient’s condition. At the time of the MVP design, it was decided that communication would go through the Zoom video service from the doctor’s laptop. The company manager connected two specialists at the right time. 

   Although the idea was good, it didn’t scale well due to the limitations of the Zoom video service. It was necessary to automate the processes. Also, the company wanted sessions to be recorded and stored. Therefore, it was decided to choose a more reliable video service. After that, a simple web interface was written for both parties — for doctors and for communication managers. It helped to significantly speed up the process of connecting a session.
   It took us 2 months to develop a proper back-end structure with sufficient front-end elements, and the client eventually switched to our system. Over the next few months, the startup was operating with our MVP. They managed to acquire enough customers to expand their network. As a result, the company received large investments and reached far more extensive volumes.

  This MVP can be considered successful as it showed the viability of the idea and the possibility of its further development. It also helped the client attract investment to develop a large-scale full-fledged product, so the main objectives of the MVP were accomplished.

• Juno Health. The idea of ​​the startup was to create a web service for psychological counseling of women who went through the process of pregnancy. It had already been proven that this process causes serious changes in the woman’s mental state, so the client decided to concentrate on this particular segment. They saw their project as an extensive platform with a lot of features. These included integrated video chat with call recording, text chat with specialists, and the possibility of booking consultations online with subsequent payments. All this functionality was necessary for a full-fledged product. However, developing such a service would definitely require a lot of time and resources.

   We advised the client to make a more limited platform for the start. This would allow testing the idea for viability while investing less. We abandoned the video chat and text chat idea and decided to use Skype instead. Session archiving was an important requirement, but at the first stage, it wasn’t necessary.

   For reservation and payment, we decided to use WordPress with a base of doctors. All processes went through a regular plugin.

   These solutions allowed us to reduce costs by 10 times and launch a working service in a month. As a result, the client faced the problem of low traffic and not enough resources for a full-scale marketing campaign. After a couple of months, it was decided to abandon the project. So, why can this MVP be considered successful? Because minimal functionality allowed the client to make sure that the idea wasn’t viable, at least at that moment. Moreover, the client didn’t invest a lot of money and time in the development process and still was able to get important results in a month. The hypothesis was tested, which means the MVP fulfilled its main function.

These are just five examples out of thousands, or maybe tens of thousands of startups that either failed or succeeded at the MVP stage. So, this process must be approached with the utmost care. 

Summing Up

Let’s stop and see where we are now. We have examined the basics of the MVP development, its advantages and the challenges you would encounter along the way. Remember the importance of correctly identifying the problem and the target audience, we will talk more about this in the second part of my article. In order for you to have an idea of ​​what you will encounter, I gave you an example of several successful (and not so) products that started as MVPs.

That was the first part of the extensive material regarding MVP development. In my next article, I will delve into all the details. We will walk through all the processes step by step – starting with the problem statement and defining the hypothesis to test and ending with further steps after your MVP launch. More to come!