Let’s imagine that you have come up with an excellent business idea. You start asking yourself crucial questions helping you to shape a best-selling product: “Is there a real market need?” “Who is the target audience?” “What is the key functionality?” The answers to these questions need to be obtained prior to the development as the key aspect of building a successful business plan is to ensure the solution’s relevance and its necessity for end-users. In addition, you want to be able to improve your software with time. In this piece, Andersen’s experts will share what a minimum viable product is, and how MVP development helps companies elicit product requirements, verify the viability of its functions, and cut project costs while creating outstanding software solutions.
What an MVP is
Statistically, seven in ten startups fail within the first five years of their existence, about a third of them due to creating products for which there is no market need. Conducting market research and building a minimum viable product is a cost-effective and sure way to verify a business idea and improve the software before its final version is developed. An MVP is the initial version of a solution with vital features that are just enough to operate on the market and deliver real value to its users. It doesn’t have a top-notch user interface, perfect localization, gold plating, or minor attributes. The idea behind developing an MVP is the ability to quickly and cost-effectively test a raw solution with the potential of bringing great utility to customers rather than spending substantial effort, time, and money developing fully functional but useless software. Thus, the app is tested by its first users who provide feedback and valuable insights for future changes.
An MVP is somewhat similar to the proof of concept, or PoC, which is the demonstration of a feasibility of a method or idea in order to prove that it really works. The PoC approach includes developing an outlined prototype or test model. The key difference between them is that the PoC deliverable is not necessarily a full-fledged product but rather a theoretical confirmation of the fundamental possibility to create it while an MVP is a fully working solution with minimal scope of features to deliver a certain value to its end-user.
Why does your business need an MVP?
Thanks to MVP development, your company creates better software by taking the following steps:
Validating a business idea in advance
Every business idea needs to be tested whether it’s a startup or an existing project. It’s extremely important to check if there is any substantial demand for what you’re going to produce. An MVP allows you to test hypotheses using the initial version of software, and thus, assess the viability of the idea by collecting feedback from real users.
If the idea is accepted by the users, then the investment in it will be justified. Your MVP can be subsequently refined and adjusted based on user feedback, redundant features can be removed, and missing ones added. All these improvements aren’t based on assumptions but rather on feedback and metrics, e.g. the number of downloads, purchases, and new users. Thus, you’re protecting your investments thanks to a better understanding of customers’ needs and the ability to satisfy them.
Identifying possibilities for further improvements
After you release an MVP and subsequently gather insights from users, you will know what the potential for further growth is and how to improve the existing solution. An MVP is easy and fast to develop, and therefore, it helps to reduce the time-to-market ratio when launching an app and rapidly provides you with all necessary information regarding the integration of the new solution with the existing one and its large-scale implementation.
What the challenges of MVP development are
Let's take a look at the challenges companies face when developing an MVP.
Poor market research
How can you be sure that the target audience will find your app useful? In-depth market research conducted by professional Business Analysts prior to the MVP development process will help. Insufficient research, in turn, will result in vague functionality, an inability to define what software has already been introduced to the market by your competitors, who your target audience is, what functionality is needed to meet their needs, and how to adjust your solution so that it would be a success. Thus, inadequate market research will ultimately result in failure.
Inexperienced development team
Sometimes companies opt for hiring low-skilled teams to build an MVP which might seem like a cost-effective option. Subsequently, they start looking for a top-notch team to finalize the development. Building the final product based on an inferior MVP leads to a situation where the quality is tremendously affected entailing negative user feedback. Lack of experience and proper planning creates chaos in a project. Thus, when you hire any team member, verify that they have proven experience in custom MVP software development.
Superfluity of features
It is strongly recommended to avoid adding extra features, that don’t cover basic user needs, to the initial version of your solution. When you’re trying to add as many nice-to-have features to your app as possible, the development will cost you more and take substantially more time. Any additions that aren’t critical for the software’s proper functioning can be implemented later when upgrading the solution.
Strive for perfection
Startups often spend more time than needed creating a perfect solution because they are continuously improving its features. However, users don’t need this perfection if the feature doesn’t have any value for them. The initial version of a solution isn’t meant to be perfect; its aim is to provide a business with insights to help develop the final product.
The story of successful MVP implementation
Perhaps everyone has heard of Airbnb, an online service for short-term accommodation rental worldwide. It started when two roommates decided to offer the spare space in their apartment to renters who found rental prices in their city too high. They came up with the idea of putting an air mattress in their living room and offering a bed and breakfast service. The website was soon up and running, offering short-term housing, breakfast, and a business networking opportunity for those who were unable to book a hotel in the overwhelmed market. After the initial business plan was validated and its creators saw the demand for their services on the market, the site’s content expanded from air mattresses and shared spaces to a variety of properties including homes, apartments, private rooms, and so on. Within a decade, the company launched other products like Airbnb Plus and Beyond by Airbnb. The story of Airbnb is an example of how a business can start with a simple MVP and expand it in the future.
What does it take to design a successful MVP?
Below are the five steps to take when converting an idea into an MVP.
First and foremost, you need to generate the idea of the technology that will bring value to the users. To do this, you will need to hold brainstorming sessions, create profiles of end-users, conduct market research and benchmarking, and investigate innovative solutions to let the idea grow into a well-developed concept. The expected outcome of the first step is to gather the initial data required for the subsequent analysis and software design.
After the information is gathered, you need to analyze it to understand the needs of end-users and the ways you can satisfy them more efficiently than your market competitors. Additionally, you should create a defined list of features essential for implementing MVP as well as a roadmap for your project so that everybody is on the same page regarding the priorities and the scope of functionality to be released.
To elicit product requirements, prioritize its features and qualities, and document them, you’ll need a hand from skilled Business Analysts. Agreeing with a customer on software features and requirements is a key part of the Discovery phase, and it’s essential for delivering to the customer the very outcomes they expect. At the end of this phase, you should crystallize a vision of the app into a particular business plan with specific ways of implementation which are clear for all the team members.
Development and launch
When requirements are conceptualized, you can embark on the development. The main thing is not to spend too much time on drawing up documentation, designing the interface, and prototyping as you might lose the main advantage an MVP provides, i.e. time-to-market. While it might take several years to develop a large-scale IT system, you can create and launch a solution with a minimum set of key features within three to six months. At the end of this phase, a fully working piece of functionality is launched delivering value to end-users.
After the app is launched, collect user feedback to learn about its pros and cons. This will help you to figure out the ways of enhancing your service quality and understand whether your software was successful and is worth further investment.
Monitor key user engagement metrics, such as the number of sign-ups, percentage of active users, percentage of paying users, customer lifetime value, and so on. This will help you measure your solution’s success with users. Implementing A/B testing will also be of help to verify your hypotheses. This process is likely to require in-depth data analysis which is extremely valuable since the statistics show the difference in using different subscription models, several variants of the same interface, etc. You may also involve crowdsourcing techniques like discussion forums and Q&A to incentivize people to share their impressions about the app.
Integrating the results into your business model
Received insights are used to make conscious decisions when proceeding with the development of the released product and transforming it from minimally viable to completely satisfying. If the idea turns out to be unprofitable, you will be able to abandon it with minimum financial loss and turn to another one.
A well-designed software solution saves customers time, money, and resources. An MVP provides businesses with the ability to test their hypothesis in practice and receive valuable insights and feedback from users.
Any type of enterprise can benefit from MVP development. If you have a startup or a small business, an MVP will help you to verify the feasibility of your idea or business plan, thus, guaranteeing the profitability of the implemented concept. If you own a large well-established enterprise, an MVP will serve as a basis for improving the existing solution.
Andersen’s experts have extensive experience in MVP development and are delighted to discuss your project with you, consulting with you on further steps to take. Contact us to build outstanding software from scratch.
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