The minimum viable product (MVP), sometimes referred to as a “lean startup MVP,” is a way to test a new product. In one of our previous articles, we mentioned that the biggest mistake entrepreneurs can make is to run their business based on assumptions. No matter how much trust they put in intuition and judgment, even if their business plan was developed independently (through in-depth analysis) or by using focus groups with business partners, their understanding of what kind of goods or services are required in the market will always differ from reality, sometimes significantly. That is why the main emphasis in the lean startup methodology is on the creation of the so-called feedback loop, which consists of such activities as “building,” “measuring,” and “learning.” In the loop, the lean startup MVP—the simplest version of the product—takes a central role because it is the MVP that makes it possible to start the process of learning during the earliest stages of the product.
At Yarandin, Inc., when providing lean startup consulting services, we explain that the lean startup MVP is not just a website or an application with a limited functionality. Of course, the MVP’s functionality is generally smaller than in a final product—but that is not the point. Although limited, the functionality still must simulate the key parts of a potential product. Moreover, minimal functionality is not an end in itself because the goal is to understand what people really need to create a meaningful product down the road. Also, the lean startup MVP does not belong exclusively to an IT or high-tech world. Instead, it is a universal concept, valid for startups in almost any industry.
To make the concept less confusing, let us illustrate this idea in the following example. Consider the entrepreneur who has decided to start a small business selling personalized gifts online. As many others, she spent time doing marketing research only to become confident that the demand for gifts will probably be higher in the days preceding national and religious holidays. She failed to find any definitive answers to such questions as which gifts to sell, at what price, and what type of customization her prospective customers would require. So, what should her decision be at this point? This is the dilemma each startup owner must deal with at some point—continue doing research or start a business based on assumptions (in our example, assumptions about items, price, and customization features)? The lean startup methodology offers another option—MVP.
So, let’s see what exactly a lean startup MVP means in this case.
If our entrepreneur wants to take advantage of the lean startup methodology, she needs to find a way to test what exactly is needed in the market. This can be done in various ways. For example, she might become an official or unofficial dealer of her main competitors, and by reselling their products she realizes her own fact-based conclusions about the demand for gifts. By reselling their products at different prices, she might even come up with a profit maximization strategy. And by communicating with real clients, she will learn about the required website functionality—what exactly is needed to streamline the process of gifts customization and ordering. This is a lean startup MVP! As you can see, it is more than just a small, simplified version of a product. This is a concept that allows us to begin the process of learning from customers.
The previous example demonstrates another important aspect you should consider. The MVP cannot be separated from the lean startup methodology. In other words, when thinking about building an MVP for a new business, it is important to find professionals who, like Yarandin, Inc., can provide comprehensive services—not just programming—and can also consult in the field of the lean startup. This is how you can take advantage of the lean in your next project.