| Sarasota Herald-Tribune
A minimum viable product (MVP) is a product with just enough features to satisfy early adopters (customers) and provide feedback for future product development, according to Wikipedia. The term was first coined and defined in 2001 by Frank Robinson and then popularized by Steve Blank and Eric Ries of Business Model Canvas and The Lean Startup fame, respectively.
Gathering insights from an MVP is usually less expensive than developing a product with more features. Additional features increase costs and risk if the product fails, for example, because of wrong assumptions.
In the old days, manufacturers would produce a product they hoped would attract a market. Sometimes they were successful; other times, not so much. The concept of creating a product with a minimum set of features (core features) does four major things: 1) saves money; 2) gets the product to market faster; 3) garners feedback from the early adopters of what they would like to see added; and 4) avoids building products that customers don’t want.
The objective is to discover what customers want with the least effort in resources and time. According to Ries, “The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
However, with a new product launch, adding the right amount of initial bells and whistles is a judgment call. Generally speaking, less is more. MVP uses a circular iterative process of ideas, creating prototypes, collecting and analyzing data and redesigning the final product for a product/market fit that can be marketed successfully as a first-generation product. Or, conversely, the product is shelved if determined to be non-viable.
An MVP may be used to launch a series of products in a product line with varying feature sets offered for additional costs. As an example, your cell phone can have increased memory from 64 to 128 gigabytes if you are willing to pay the up-charge. An MVP helps build brand equity quickly. Remember, the first iPad didn’t have a camera.
Using a fantastic modeling tool such as the Business Model Canvas to test assumptions about a new product launch is the way to begin. You need to be most concerned about the value proposition (What problem are you solving and what advantage do you have with this product/company over the competition?); customer segments (Who you are going to reach?); and the channels of distribution (How you will reach them?).
MVP lingo is common among startups. In fact, the startup team is typically lean and mean with a minimal amount of people and overhead to accomplish the launch. You might refer to it as a Minimum Viable Team (MVT).
In the marketplace this makes a lot of sense. Why spend beaucoup bucks to test something that may not work as envisioned, or at all? You may have produced the best product that no one wants.
Strategic market research should still be conducted on the front-end. It makes sense to dip your toe in the water before you jump in.
Some tips:
- Release early (the product), release often.
- Gather feedback as quickly as possible.
- The validated learning is what’s most important.
- Fail as early as possible.
- Test price and pricing upgrades.
Three irrational fears: (per Eric Ries)
- Customers would have liked the product, but the minimal product wasn’t great.
- Customers don’t know what they don’t want.
- Lastly, a fear of being too busy to learn. It would be faster to build it right, the constant measuring distracts from delighting customers.
In summation, if you are considering a new product launch, consider using fewer resources to test your idea with a minimum viable product instead of engineering with too many bells and whistles that no one wants or is willing to pay for.
Dennis Zink is an Exit Strategist, business analyst and consultant. A Certified Value Builder and SCORE mentor, and the past chapter chair of SCORE Manasota. Dennis created and hosts “Been There, Done That! with Dennis Zink,” a nationally syndicated business podcast series and “SCORE Business TV” available at www.Time4Exit.com. He facilitates CEO roundtables for the Manatee and Venice chambers of commerce. Dennis led a SCORE team to create the Exit Strategy Canvas and Exit Strategy Roadmap program that provides a real-world methodology for business equity realization. Email him at [email protected].
