A startup operates around a vision that its product will uniquely solve the pressing problems of customers in their target market. The founders often expect that their product will deliver an unprecedented return on their investment. This vision includes two important assumptions: the assumption around providing value (i.e., the value hypothesis) and the assumption around growth in the market (i.e., the growth hypothesis). Commercialising a brand new product or service is a complex task with an uncertain outcome. Whether it is undertaken in a big corporation, a startup, or a not-for-profit organisation, it requires vision, determination, and resources. Entrepreneurs of all stripes, in a garage, a multinational, or in a social enterprise, have brilliant ideas and doggedness to succeed. Resources, however, can be scarce. For a startup, it is essential to validate its value and growth hypotheses as soon as possible. In order to do that, the company has to come up with a version of its product that is complete enough to demonstrate the value it brings to the users: a minimum viable product (MVP)
A Minimum Viable Product (MVP) is a product that has the minimum set of features to prove an essential hypothesis in your business.If you’re starting with an idea and nothing built, your first goal is to prove that people want what you’re planning to build. A Minimum Viable Product would be what you could build at a minimum to prove that.It sounds obvious. But the reality is many products are made that no one cares about. A product may have many great features but building features don’t help a product in search of a problem.Building a Minimum Viable Product can save you time and money, but it’s not an excuse to build a bad product. Making a Minimum Viable Product means thinking about all the elements your product could have – each feature, each potential page – and only doing the things most essential to prove people want it.
Let’s pretend you’re building a startup with the goal of creating the best doughnut ever.
The product team starts off by building a plain doughnut. At this point, it’s considered an MVP. The product works, but it’s probably not quite the best doughnut product out there. Now the team can ask their customers questions about the doughnut, like:
- What do you like the most about the doughnut?
- If you could choose any topping, what topping would you add?
- Would you prefer a doughnut in a different shape?
- And, so on.
Using this newfound validated learning from their customers, the team can create a better doughnut. But, depending on the context of the customers that provided feedback, the team can have wildly varying results:
- In this particular case, it’s to add candy sprinkles.
- In a different market, with different customers, those customers may have wanted a chocolate doughnut.
- If the team spoke to customers in another country, they may have wanted a strawberry doughnut.
An MVP is the smallest fully-functioning product that you can deliver to your customer that solves a valuable problem for them. The goal in figuring out what your MVP is to determine the smallest, fastest thing that you can get in the hands of your customers, and to iterate on it from there, given what you learn from their experience with the product. That is an MVP.
– Tarun Vakkalagadda