Why Start Business With MVP Is a Good Idea
Starting a new business is always a risk. Statistically, 9 out of 10 startups fail. The main reasons for this are lack of market demand, running out of cash, and a wrong team. To increase the chances of success, you need to know what users want and correctly calculate your budget. Besides, it is necessary to select an experienced development team and draw up a detailed plan before launching a project. At Softensy, we always recommend that novice companies start with a minimum viable product (MVP) and only then move on. This approach helps save resources and choose the right vector of development. This article will take a closer look at what MVP is and why it’s a win-win solution for startups.
What Is MVP?
A Minimal Viable Product is a test version of a software product with the smallest set of functions (sometimes even one) that brings value to the end-user. MVP aims to test hypotheses and check the viability of the product idea. It wants to learn users’ reactions and see if they enjoy a newly introduced service.
After launching MVP, the stakeholders expect to gather feedback from the target audience and understand whether it is worth investing more. They may also decide on possible changes in the current strategy taking into account the wants and needs of the clients.
The MVP model has long been proven to be effective. Many strong brands applied it to test their products at the infancy stage to add more sophisticated features in the future. The prominent examples are Spotify and Airbnb. They started as one-function services — music streaming and apartment renting, respectively. Today, they are global companies with millions of active users and huge incomes. You can compare how their software looked like at the start and now at the picture below.
10 Steps To Build MVP
At Softensy, we follow a well-tried plan to build MVP. This plan helps us effectively allocate time, distribute resources, and filter out secondary tasks. Below you can see the steps to create MVP:
Step 1. Learn Market Needs
As you know, demand creates supply. Therefore, to make the right product, you need to be aware of market requirements. First of all, it is worth studying local peculiarities and direct competitors. It is also necessary to pay attention to global trends and companies that indirectly deal with the services you provide.
Step 2. Set Goals
What business goals do you want to achieve, and what benefits should the product bring to your company? Unclear answers like increase revenues or minimize costs are not suitable. You want to define precise goals in quantitative and qualitative indicators. For example, if you own a grocery store, a retail app might intend to shorten checkout time by 25%.
Step 3. Define Success Criteria
Describe in detail the outcome of a successful application launch. For example, in our case, a retail app can be considered successful if it reduced the checkout time by the expected 25%, gained a thousand active users per month, and processed transactions totaling one million dollars.
Step 4. Compose Personas
A persona is a detailed portrait of the user who will deal with your app. It should describe everything down to every last detail: age, profession, social status, marital status, and so on. The personas will help you get to know the target audience and better understand users’ needs. Such awareness provides a solid base to build relevant functionality in your software.
Step 5. Highlight User Pains
Specific users have specific problems. For example, a retail app user might be a nine-to-five employee with two kids who has no time for long shopping trips in offline stores. The online service should provide them with a convenient and fast mechanism for ordering products. It should also let them choose home delivery or pick-up from the shop.
Step 6. Offer Relevant Gains
Your product should solve users’ problems through relevant services. In our case, the retail app would provide users with a convenient and fast mechanism for ordering products. It would also let them choose home delivery or pick-up from the shop.
Step 7. List Key Features
Now it’s time to translate the gains and benefits of your app into specific features. In MVP, these are usually 2–3 functions that cover basic users’ needs. For example, a personal profile, catalog, and delivery options will be sufficient for a novice retail app. They will let users shop online and eliminate the need to visit an offline store.
Step 8. Work Out User Journey
Last but not least is to think about the user path in your app. What will happen after the app launch? Is registration required? How to reach the product catalog? How to place an order? All steps must be thought out and logically follow each other. The user should quickly figure out what’s what and not guess your app as a tricky puzzle.
Step 9. Design, Develop, Test
Remember that MVP is a true-life product with ready-to-use functionality, a user-friendly interface, and high performance. The only difference from full-fledged software is the limited number of functions. Nevertheless, the minimum you propose must be implemented at the top level. That is why you should apply proven practices of software development to release a reliable program.
Step 10. Release And Watch
To get true value from your MVP, you have to keep a close eye on how it travels in the real world. Monitor app performance, collect reviews, track downloads, analyze customer satisfaction, and draw conclusions about further changes and improvements. A thorough MVP analysis will help you enrich the app with more advanced features and turn it into full-featured software.
What If MVP Fails?
Keep in mind that MVP is a pilot version of a product. Your key purpose is to record users’ reactions when it goes out into the world. It’s great if they give a green light. In this case, you can be sure your course is correct and fill your modest product with more advanced features. But it also happens that users do not show much interest in the app. In this case, you would also need to give yourself a pat on the back: all in all, you did not waste the entire budget but tested the idea on a limited version with minimal costs.
Moreover, the unpopular app should not be immediately thrown aside. There is a high chance the reasons for the failure lie on the surface and are easy to fix. Based on our experience, we recommend that you pay attention to the following points:
Target markets and users. Perhaps your app will do its best in other regions and with other user groups. Reconsider your target audience and try launching the product elsewhere.
Price policy. Setting prices is a challenging task. An expensive subscription can scare the users away and discourage further use. On the other hand, low cost raises questions about product quality. To establish fair prices, collaborate with business consultants, economic experts, and marketers. Find the offer that will be most attractive to your users.
Wrong priorities. If hundreds of similar apps are on the market, it’s useless to come up with basic functionality only. You need to introduce a definite perk that your competitors do not have. Getting back to our retail app, it may be super fast delivery, attractive cashback, or a big bonus for a subscription. Thus, coming up with something different, you can still offer a standard set of functions.
MVP is a kind of safeguard measure and a way to ensure the product will be successful. Also, this approach helps allocate resources and face the slightest loss in case of failure. If you have an idea for software development but don’t know where to start, use our step-by-step guide to build MVP. If you need expert help, contact our managers. They work both with startups and big enterprises and can guide you through developing a win-win launch strategy.
This article was originally published at Softensy.