For any type of business or startup that generates a product, it is necessary to know and apply an MVP (minimum viable product) strategy, which activates and mobilizes the process in which a new product adapts to the market and potential customers.
Definition: MVP / Minimum Viable Product
The minimum viable product or MVP is a term that Eric Ries disclosed, which consists of the minimum amount of utility that is needed to obtain information from customers or potential customers.
That is a basic product that works as a collector of information and interests of those who are interested in a new product that provides a solution to a need with the least possible effort.
The way to collect this information is not through surveys or test subjects, but from the acquisition of the base product, use and promotion among the same customers, and that this can give concrete data to the business to apply and optimize the product or service.
What is the goal of the MVP (minimum viable product)?
The creation of the MPV (minimum viable product) can have different objectives for a business or startup:
- Investment in products that really work, that is, with this method those that do not attack a need and nobody wants are discarded.
- Increases knowledge about the client, their tastes, how they spend, etc., with each investment made, so that the most benefit is obtained.
- It generates results, tests, on how much a product can work before starting a large production and optimization.
- A quick launch of the product or service to the market is sought.
- Reduces the investment of execution.
- Update and optimize the customer database.
The MVP (minimum viable product) seeks to be a practical tool so that any producer does not make the mistake of creating something that is not consumed, that does not meet needs, and does not generate interest.
Rather, create an experiment that generates enough information to project a business plan into a product that will be successful.
But this strategy also has its drawbacks, since it may not always have the appearance or finish to which the market is accustomed or the result may be less than the “minimum” that we have calculated.
Taking this into account and being a business test, we seek to provide us with the greatest amount of data and information with the least investment of time and money, quickly entering the market and that the largest number of users know and acquire, avoiding losses.
How to make your Minimum Viable Product
Going into the matter, let’s see step by step how to make your minimum viable product or MVP.
Create a value proposition
The first thing is to make sure that the product or service you are creating is functional, what value it can have for the client according to its usefulness, in addition to being achievable.
Offering value to users is key to being able to catch them.
To establish objectives
It is in this part of the process that what is being sought with the service or product is asked, what are the metrics that will tell us that the product is profitable and from there start the process of creating trial versions.
It is necessary to emphasize that the product must be accessible, easy to make, that it does not take too long and must be functional and show certain basic characteristics that generate attraction and motivation on the part of the public.
As we have commented previously, one of the main characteristics of a minimum viable product (MVP) is its short production time and rapid market penetration.
Why should we think in such short times? Currently, the flow of product creation and trends has increased significantly, hence competition in all areas.
For this reason, it is necessary to take advantage of every minute within your marketing plan and with it its opportunity, creating an execution schedule: from the sketch, planning of ideas, tests, to the launch of your product or service.
The premise of being a test of the product, that is, it is not about manufacturing the final and optimized version but an experiment with a significantly lower investment.
This does not mean that the product can fall far below the (minimum) expectations of the customers since the product must generate the attraction of the customer.
We must keep in mind the development of a product with a low production cost but that meets the minimum operating characteristics to be commercially usable.
For this, you must have a detailed description of the expense ratio for the creation of the minimum viable product (MVP): materials, development, labor, distribution, extra expenses, etc.
In addition to this, you must define the return objectives to make the sales projections, how much do you need to sell to recover the investment? What is the ROI or return on investment you are looking for?
To measure the performance of your MVP you can use several resources:
Once we begin to develop the minimum viable product, we must be clear about the way in which we will receive the feedbacks, data, information from the leads.
If we cannot receive information about the operation, how it looks, what could be improved, from the public, the MVP objective completely loses its meaning.
When developing the minimum viable product, it is important to think of strategies to know its impact. An MVP who can’t capture feedback completely loses his purpose.
Evaluate the data:
The data and information obtained from the process and through feedback must be studied in great detail since these are the ones that will answer whether the product in question will be a viable business or not.
Identify each of the data that can help interpret how it behaved and project into the future: the time it was sold, comments about the product, returns, interest before, during, and after the launch, store or web traffic, growth in platforms, referrals, etc.
We share some of the elements that you can take into account when measuring according to the sector where you are:
- E-commerce: conversion rate, investment behind a purchase, and affiliation.
- Service software (Saas): sale, engagement, and the percentage of the real value of the service.
- Mobile app (applications): popularity, number of downloads, customer reviews.
- User Content: the amount of content they do, number of times it is shared, feedbacks from other users.
- Own content: number of people who go to the web, networks or store, popularity, user response.
Why is the MVP important?
Introducing a minimum viable product, MVP, in your strategy has many benefits in different aspects when it comes to improving your business, the main one is to be able to test the performance of products and services with a minimum investment of time, money, and effort.
In turn, direct contact with customers and their feedback to optimize the product, purchase process, promotion methods, etc., also help to capture information about their behavior for future launches and projects.
It is having first-hand the expectations that the market has, therefore a great advantage when it comes to innovating to cover a need and greater return on investment.
With this we must also take into account that the customer’s response will not always be so receptive, they may not like the product at all, but even in that case, by working on a minimum viable product we will have time to modify and adapt the product before launching and final investment,
The minimum viable product is applicable to any type of business, of any modality, and at any level, although it is a more popular method in the area of technology.
So if you have a company with products or services, physical or digital, you can apply the principles of MVP to optimize your sales and market responses.
How does the MVP help your Marketing strategies?
The minimum viable product is an excellent bridge to enhance your brand, enter the market, and evaluate user behavior.
The development process can provide feedback to the different channels of your company, for example: conducting surveys through Google and Facebook to collect information enhances both the production of the MVP and the performance, feedback, and interaction of the platforms, market validation, contribution in segmentation, etc.
In turn, keeping products on the market contributes to brand positioning, alliances, and promotion through traditional, digital media, influencers, sectors of interest that contribute to engagement, etc.
Starting Groupon before having a platform.
Groupon or now known as Peixe is a platform recognized for the number of coupons and discounts that they handle daily from countless stores, stores, and products.
Before being a developed business, they were dedicated to solving problems, identifying needs. Andrew Mason says it took him eleven months to develop everything before investing in software.
They released a kind of WordPress blog to the public, where it was published and followed up through an email to the public that showed interest in the offers.
This method turned out very well since they found a population interested in obtaining discounts, had conversion rates and information before developing the final product.
Flight policies at Despegar.com
Despegar.com tested a minimum viable product for business, corporate travel. The experiment was a page similar to the one seen by end consumers but adapted to the processes of companies when approving budgets for travel expenses.
The results of the MVP were not being what was expected, so a process of analysis and evaluation was started to identify where the fault was.
One of the possible options was that people who travel for business tend to cancel or change easily due to eventualities, and the change and cancellation policies of the flights were not exposed on the page, since in the original platform it was not necessary for the purchase flow.
Carrying out the policies was complex for the different airlines, routes, types of seats, etc., since each element has a different policy and this type of information was not standardized, nor adapted to the users.
Therefore, before carrying out this tedious task, which would have an additional cost in the investment of the product, it was necessary to verify if this information was useful for potential clients.
This was through a link to a pop-up page to access the information (which was not yet there), it only had a call center number to verify the information and in this way, the percentage of interest of the users could be measured.
The result was not overwhelming, 0.005% of users clicked on the link. Although it wasn’t exactly the source of the problem, it helped rule out options without investing time and effort in a hypothesis.
Buffer is one of the most successful examples of a minimal viable product. This is a platform to schedule posts on different networks, such as Facebook, Twitter, and LinkedIn.
Its founder, by using Twitter frequently, began to gain popularity which led him to increase the number of daily publications, but it was becoming difficult to do so constantly.
Considering this, and that he was probably not the only one to whom it happened, he considered making a platform that did it automatically, but would users really be willing to use it?
To verify this, he made a landing page where the only thing he could do was click a button to know the plans and prices of a supposed platform and where he could leave an email to receive more information.
From here, the hypotheses and data collection began: among friends they tweeted the page to position it, with which they got about 100 registrations and feedbacks.
In addition to checking if people would be willing to pay for the service and how much, inserting a page where they broke down 3 prices according to the services: 0, 5, and 20 $ USD, monthly.
After several experiments and publications, they had more than 500 registrations and an acceptance of 5% of the total to pay for the service.
After 2 months of tests and hypotheses, they launched the platform with very fast growth, proving that it was an excellent MVP.
The minimum viable product is a tool that deserves more attention from other sectors beyond technology since it provides the necessary information for those businesses whose objective is to grow, ensure sales, and know the behavior of its public, that is, any business.
As we can see in this article, understanding and studying the process in detail can guarantee that the product is viable, has a very low investment of time, effort and money and that it adds to the positioning of the company, business, or startup.
Creating an MVP, whatever the result, indicates a contribution to the process of creating and distributing a product or service and is perfect if your company is starting or in its full development.