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Minimum Viable Products

Dec 14, 2020

This is a complete guide to building a minimum viable product (MVP).

In this in-depth guide you’ll learn:

  • What is a Minimum Viable Product
  • How to build a Minimum Viable Product
  • Types of Minimum Viable Products
  • Plus lots more

So if you’re ready to go “all in” with building MVPs, this guide is for you.

Let’s dive right in.

What is a Minimum Viable Product?

First, let’s define what a Minimum Viable Product means. Wikipedia defines MVP as: 

“A minimum viable product (MVP) is a version of a product with just enough features to be usable by early customers who can then provide feedback for future product development.”

Starting a new venture is inherently risky, and your first idea is unlikely to be the right one. Startups talk about their runway – the amount of time they have before the cash runs out – for good reason. The clock is ticking. Would you feel more comfortable knowing you’ve got a single shot at success, or many?

Of course, unless you just like to gamble, the other factor here is progress. Let’s imagine we’re playing a card game. While being able to play ten hands will give you a better chance of winning than just one, what is even better is being able to learn from each of those hands to improve your chances of winning the next one.

An MVPis the nexus of these two ideas: narrow scope with a bias towards learning. It is a tool to help you build out an idea, test it in the market, and learn from its performance, so you can iterate on it. This is the “Build-Measure-Learn” feedback loop, popularized in Eric Reis’ The Lean Startup.

There’s some debate/confusion/disagreement about what really “counts” as an MVP, so we’ll give you our definition: an MVP is the smallest thing you can build that can test a value proposition for your customer, and if successful, allows you to capture some value yourself.

MVPs are Small 

When you think about your product, it’s easy to dream big, and over time, that vision can seem essential. But the best products begin from identifying and understanding a true customer need that is currently not being met in a satisfactory way. Finding one of these insights often enables you to build something valuable for that customer who is highly focused and targeted.

MVPs are Real Products

That means it can’t simply be a description of a concept, or a “front door,” such as a landing page with nothing behind it. It is certainly useful to test demand for ideas using these sorts of techniques, but that’s not where the rubber meets the road. With an MVP, you are looking for people to actually use the thing you are building, and hopefully find value in it.

MVPs Capture Value

The best way to see if someone finds value in something is to ask them to pay for it. If they will, then you are providing them enough value for that monetary investment to be worthwhile for them. That’s a good sign.

MVPs Allow You to Test Something

MVPs are fundamentally about learning: we develop something small so we don’t burn too many of our resources on a single idea, and can test multiple ideas with the same amount of time and money it would have taken to build out a much larger concept. 

We develop the MVP and put it out into the market to get real data from customers that can help us design our next iteration. And we ask people to pay, to ensure that if the idea is getting traction, we can be certain it’s genuine, and not just because people are trying to be nice.

MVPs are like a chemistry kit—sure, it’s not a full-blown lab, but there’s plenty of exploration you can do with it before a lab is really necessary. While your neighbor is busy building his fancy lab, you could have run hundreds of experiments, and maybe— just maybe—found the secret formula to success and riches.

If that concept appeals to you, stick with us. 

Building Your MVP: Choosing the Right Path for Your Product

So, you’ve done the customer discovery, you’re confident you’ve found a problem worth solving, and you have even built and tested a prototype or two. Now you’re probably asking yourself, what next? 

This is the time to take the plunge and build your MVP!

Building an actual product is a super exciting, very scary, and often expensive effort. That’s why we’ve spent so much time preparing for this step so that we can be reasonably confident that we’re building something people actually want to use. 

But, before we even begin building, we’re going to have to tackle one big question: how do we build it?

Hire a Developer

This can be a freelancer, in which case you need to quickly brush up on how to manage freelance developers, or it can be someone you bring in as a formal part of the company, usually in exchange for equity of some kind. 

Learn to Code

Building the MVP yourself is the cheapest way to get your product out the door, but it’s also one of the slowest if you don’t already have the ability to code. Learning takes time and getting really good takes even longer. 

No-Code or Low-Code Tools

We’ll tackle these tools in their own series later, but for now, what you need to know is some tools will allow you to build and deploy a functioning MVP with little to no coding experience. 

As of this writing, these tools are getting better and better every day, but they’re still usually just functional prototypes. If your no or low-code MVP connects with your market, you’re still probably going to have to start building a product, using actual code from scratch eventually. 

Use a Development Shop

Development Shops bring a cross-functional development team togetherto build your product and are one of the most common—and most expensive— ways to build an MVP. This can often result in faster time to market and quicker problem solving than other methods of building an MVP. 

However, your mileage may vary with development shops. We’ve seen and have experienced amazing results as well as disastrous failures with development shop products in our years as product professionals. 

Let’s cover a couple of MVP example frameworks.

MVP Frameworks

Three very different characters for two different types of MVPs

Let’s talk about two common and powerful forms of MVPs: the Concierge MVP and the Wizard of Oz MVP. These MVPs both narrow the scope of your solution by cutting out development work and performing parts of the solution manually. The difference between the two is what is cut, and that has significant implications for when to deploy each of them.

Concierge MVP

With a concierge MVP, you perform most, if not all, of the steps of your solution manually. Much like a hotel concierge, you are providing a VIP service to the individuals who are your first customers. 

A classic example, outlined in the Lean Startup, is Food On The Table, a company that built meal plans for customers based on what was on sale at their local grocery store. In its early days, Food On The Table’s founder, Manuel Rosso, prepared these meal plans manually by going to the stores and identifying what was on sale – true personalized service.

This type of MVP has a few characteristics:

  • Minimal upfront costs: because the solution is performed manually, there’s no investment in software development required
  • Lack of scalability: the intention is presumably to build a software solution that replaces the manual steps
  • Adaptable: you can change the service you are providing based on your customer’s needs
  • Exploratory: because of this adaptability, a concierge MVP can be useful when you have a rough idea of what you want to do, but don’t have the specifics nailed down yet.

One application of the concierge MVP that can be particularly powerful is when you are a subject matter expert whose background is in an old-school industry that provides a manual, high cost service (such as wealth management or legal services). 

In these contexts, you can continue to provide a version of that service, while looking for ways to automate the process, making it more scalable and efficient, ultimately developing a lower cost solution to disrupt the market.

Even after you have developed an initial version of your product and brought it to market, you can use concierge MVPs to test specific features that you are considering to improve the product. At Pack Health, we have used this technique numerous times to reduce the time it takes for us to test new ideas, particularly those that are attractive but seem technologically complex.

Wizard of Oz MVP

By contrast, a Wizard of Oz MVP attempts to give the illusion that it is a fully functioning product by providing a genuine looking front end and handling the back end processing manually. 

A classic example is Zappos, the online shoe retailer. Zappos’ founder, Nick Swinmurn, created an online shoe store and populated it with photos he took of shoes from local brick and mortar stores. If a customer bought a pair of shoes, he returned to the store and bought the pair he had photographed.

The characteristics of a Wizard of Oz MVP are very different from a concierge MVP:

  • Driven by a solution hypothesis: whereas the concierge MVP is exploratory, the Wizard of Oz MVP is best used to test a specific solution idea (such as an online shoe store). It’s harder to change the MVP dramatically midway through—an online store for shoes is an online store for shoes.
  • A starting point to improve on: whereas the value experienced by a customer in a concierge MVP should be excellent (as they are receiving VIP treatment), the experience of a Wizard of Oz MVP will likely be slightly lower than the eventual product, if launched. That is because there will be inherent latency as you perform the manual steps that will eventually be handled much more quickly by technology.
  • Some initial upfront development costs: the front end needs to be built, even if the scope is still much narrower than building a full solution due to the resources saved by not building out the back end.
  • Hides the human: a Wizard of Oz MVP tries to pretend like it is a fully-fledged technology-driven product, whereas a concierge MVP transparently puts a human in the mix.

Once again, there’s nothing to stop you deploying a Wizard of Oz MVP for features in your product after you’ve released your V1.

Piecemeal MVPs

A Piecemeal MVP, as the name suggests, is like building a raft. You are tying together different products and services to build the solution, even if it’s kind of rough around the edges.

This can be a powerful approach for many reasons.

The Advantages of the Piecemeal MVP

First, there will be aspects of your solution—maybe even the majority of it —that won’t be unique to you. Someone else has built something to achieve that goal, whether it is processing payments, storing and manipulating data, sending communications, and so on. By using pre-built services, you can dramatically cut down development time.

Second, there is an increasing number of tools that make this process of cobbling together products to build your solution even easier. Workflow automation tools like Zapier or IFTTT, no or low-code tools such as Airtable or Retool, productivity platforms like G Suite, and many other products can allow you to build even sophisticated products with a little ingenuity.

Third, many of these tools have been designed for users who can’t, or prefer not to, code. All you need to do is figure out the business logic behind your solution, and you can be off to the races.

A classic example of using a Piecemeal MVP to test an idea is Groupon, the daily deals site, which started as a basic WordPress blog. The founders would put an offer on the site each day and then process the orders using other tools. For example, they created the coupons using PDF creation software and then automated delivery via their email client.

As with the Concierge and Wizard of Oz MVPs, a Piecemeal MVP will likely have some manual steps in it, to get around the fact that you are using out-of-the-box functionality that isn’t customized to your particular solution. But that’s okay —you’re still saving yourself time and money!

The Dangers of the Piecemeal MVP

There are some pitfalls to the Piecemeal MVP, however.

First, you want to avoid being biased by the tools you’re using. You shouldn’t be searching for a way to use that cool feature or integration you’ve seen in Zapier or Airtable; you need to start with a clear understanding of the problem you are trying to solve for your customer and the solution you want to build. Similarly, you want to keep your solution simple: don’t tack on extra features at this early stage just because you can see a way to do it with the tools you are using.

Second, you need to be on the lookout for the limitations of the tools you’re using. Assuming your idea is a success and you start to scale, you may start to hit walls with these tools. You want to make sure you have an “exit strategy”a way to move beyond the piecemeal so you can keep growing and innovating.

Third, “piecemeal” is not a synonym for “crappy.” Remember that your goal is still to deliver value to your customers, and capture some of that value for yourself. It’s fine if the solution is rough around the edges, as long as the value proposition is strong and you are meaningfully delivering value to your customers in a new way; if those rough edges are introducing enough friction that the customer can’t experience that value, then your MVP will fail.

The MVP Is What You Make of It

As you have probably gathered, Piecemeal, Concierge, and Wizard of Oz MVPs are not necessarily mutually exclusive, nor are they the only options. They are more like tools in a toolbox, which you can deploy for different purposes. And just like physical tools, their effectiveness is a function of their user!

As you think about building your MVP, remember what we discussed at the start of this series: your MVP should help you test whether a real product can capture value for/from real users, in as short of a timeframe as possible. Keep these principles in mind, and regardless of how you build your MVP, you’ll be starting a journey of learning that will put you on the winding road to success.

Have you heard about Foundations by AppThink?

Interested in joining a group of entrepreneurs working toward their MVP? Join our flagship cohort-based course, Foundations

Foundations is perfect for an entrepreneur with an idea but who is unsure of the steps to take to attack the problem and build a business. Do you have questions before you join? Send us a message, we’re happy to help. 

article by Trevor Newberry

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