Minimum Valuable Product: How to Evaluate Your Idea?
Minimum Valuable Product = Maximum Business Value
A minimum viable product (MVP) is a product version with just enough features to satisfy early customers. It provides feedback for future product development and the possibility to scale fast so you won't lose precious time when your idea turns out to be a unicorn. And that is all.
"When you think about a minimum valuable product, you just think about something ridiculously simple; this is the first thing you can give to the very first set of users you want to target, to see if you can deliver any value at all to them. That's all it is, it's extremely simple", - Michael Seibel, Y Combinator partner.
The main goal of launching MVP is to validate your idea as this solar panel application did, find product-market fit, figure out if the business model works and scale it fast.
Finding the key to customers' hearts could be tricky. They can't say what they need or want; it is our job to suggest and get their feedback, whether it works or not. In a perfect world where an ideal MVP would exist, it could be extremely fast to build, have optimum functionality, and be a base to scale and iterate. The simple launch means getting customers and their feedback, not doing things that already are on the market, or no one needs them.
Minimum Viable Product Development Stages:
From Business Analysis to Fast Solution Delivery
Stage #1. Business Analysis
The starting point of any solution delivery - to go deeper into product and customers. Core questions for this stage would be: What is the problem, and who is a customer? How are clients facing a situation your solution would manage? How do they figure it out? What alternatives do they have? Is there any market competition?
Self-confidence and strongly believing in your product are essential. But an understanding of the environment gives you a better grasp of the challenge you are fighting with. Choose a couple of competitors, study their products and ways of communication with customers, find weak points, beat them!
Customers' UX/UI Environment Analysis
We all live in a world of apps; your customers already use a lot of technologies and different style interfaces. To fit clients' expectations, you need not only to be competitive but to look acceptable on this market, in this country, for such type of customer. Otherwise, you would be banned just because you look more worthy.
Stage #2. Service design
User Flow Defining & Modelling
What path takes the customer while using your solution to complete the necessary action? What steps need to be taken from entry point to final result-buy-action (order, purchase, subscribe, registration)?
Revenue Stream Processes Defining & Modelling
Every business has three types of the business process behind it - operational, management, and support. Operational business processes are core processes; they generate the company's revenue, actually. It is a way in which you receive income. Management business processes - they are an operational basis that helps businesses work effectively and deliver products and services. Supporting processes are helping businesses be better, competitive where the challenge is tough; customer support is one of the top of the mind examples. Talking about minimum valuable products, it's better to focus on the Operational (core) business process at the start. It's crucial for understanding how and how your idea works.
Stage #3. Summarize & Prioritize
List all features & options
Visionaries always have big plans. Big plans demand a lot of precious time and effort. Sound like the market opportunity is lost. The result of any Business analysis is not a substantial document but a list of features & options.
Prioritize them in terms of business value and easy to implement
Give each option and feature a value - how much impact can these items have on your future business these items help to earn more customers? Choose pure grade - low, medium, high (S, M, L if you like shopping). Define a difficulty level for each option and feature. Choose the most crucial and easy to implement. The main idea of MVP is to make your core process work and be used by early customers.
Stage #4. Deliver Fast
Development from scratch is an excellent option, but can it be FAST? Would competitors and customers wait while you are building a perfect developers team? I bet you know the right answer.
Let's discover Unicorn examples we all know and use - Airbnb market place to rent a private stay in any part of the world. They launched with simple features - search & ability to be listed. Now Airbnb is a giant marketplace with extremely convenient filters and experience renting options. So you could receive not only bed & breakfast but also the feeling of how to stay local with these particular persons. Airbnb didn't wait for a full-scale launch; they just created a core business process and continuously improved it based on customers' feedback to create a product we all love now.
Want to decrease time-to-market to launch your solution as fast as you can, are there any platforms and tools to help? The answer is yes. But you need to be very accurate while choosing one of them. Mostly they offer low-code options that look nice at the very beginning. But they limit you with a standard business process way of thinking instead of a service- design approach. These platforms are black boxes - you can't upgrade, fix what is inside or resolve some unique integration point. And you need to pay for them! It definitely restrains your growth and development.
Usage of the open source fast code platforms with all their benefits will contribute to your future business. At the end of the day, you receive a flexible tool for your solution design needs: integrable, scalable, transparent. It sounds like a win-win!
How Much Does the Minimum Viable Product Software Cost?
To answer this tricky question, you need to evaluate the core business process - what helps you acquire customers and generate revenue from their interactions. Experts suggest fulfilling high-quality business analysis to determine all critical features for the customers to choose the most crucial one, and choose a scalable solution for your business - so technical limitations won't kill a future unicorn. Create minimum viable products really fast and stay competitive.
What is the Difference Between MVP, POC & Prototype?
MINIMUM VALUABLE PRODUCT
Minimum Value Product is a working solution which can generate revenue - that is the main distinguishing feature. It is a working application with all the necessary features, not just an idea.
Minimum Valuable Product is About:
Ready to be launched on the market for early adopters - first customers.
Feedback loop integration for continuous customers' behaviour tracking and feedback. A/B testing possibilities should be the part of Solution Architecture to verify your statements with real customers.
No need for high-level investments but still have a good customer retention rate. Some industries are an exception - healthcare, banking, IoT, aerospace. You need to invest more time and money into applications in these areas.
Project's team efforts and the company's money treatment in a savvy way.
When MVP Works Best?
You need a working application for customers, and you are pretty sure about your idea, so you are ready for market validation.
You are looking for returning your investment into this idea - the working application can generate revenue.
You are looking for excellent retention with fewer efforts.
You need customer feedback and market response to make your app better and find product-market fit.
PROOF OF CONCEPT
Proof of concept originates from the space industry and stands for an approach to validate the concept of some limited group of customers or even hypothetical customers. It is something really "small" and often uncompleted. We create POC before we start the development and delivery process to show our colleagues, management, and angel investors what we are going to do. It is much straightforward to literally see what is going to happen and how than studying boring slides with descriptions.
Proof of Concept is About:
Idea validation and confirmation with colleagues, investors or hypothetical customers.
Less time & money inputs - you just create a shell to show something which is inside your head.
Emphasize potential risks and difficulties on the early-stage, before solution would see the world.
Provides confidence - does this idea need to be launched widely and who are going to be the first customers to try it.
When POC Works Best?
Technical approval for launching - is it possible to implement.
Knowledge sharing among colleagues or inside the team.
The potential value and success estimation.
The Prototype focuses on evaluating new features or design. It can visually show working flow for some process or action, so it is easy to understand how it works. The Prototype is more about showing how some parts of the solution may work.
The Prototype is About:
Early feedback from the team when you are launching a new feature.
Mistakes and weak points marker - you clearly see where gaps are before you are trapped in on the development stage.
Make complicated features look understandable.
Validation tool for business users.
Nice option if you are looking for an angel investor.
When Prototype Works Best?
You are looking for visualization of precise features to validate them with someone else.
Time and money restrictions. You need to show how the core idea may work for your stakeholders.
No developers to help. The Prototype is something you can basically do in Slides or PowerPoint. It may be enough to show your way of thinking to another person.
Building a Minimum Viable Product is about launching simple solutions that work. It is essential to choose what should be inside your application, which will be vital for the early customers and why they want to pay for it.
From a technical point of view, it's vital to choose the right framework to deliver and develop your solution. However, you would be ready for scalability and growth, whether it be a development from scratch or a fast code platform.