In the previous article, we talked about the main benefits of creating a Minimum Viable Product. This approach to creating a product will help not only quickly develop and launch it, but also find out the needs of the audience, purchasing power, and check out ways to monetize it.
MVP will help to avoid unnecessary costs, as the project is launched with the minimum necessary capabilities. The functionality highlights the main thing for solving the client’s problem. In other words, if you want to create a website for rental housing, then it will be vital:
- Possibility to place ads;
- Leave a request, make a reservation for a specific date;
- Contact administrator.
Approximately 40% of startups become profitable. And in the first half of 2022, investors around the world have invested about $250 billion in startups.
In Russia, in the first half of 2022, the volume of attracted investments fell sharply. But despite this, this period became a stage of transformation both in the strategy of start-ups and in investing in projects. Import substitution is actively developing, suppliers and delivery channels are changing. Private investors become drivers, Business Software, ECommerce, Transport & Logistics become priority investment segments, preference is given to young projects at early stages.
And yet statistics say that about 90% of startups fail. One of the main reasons is the inconsistency of the idea with the requirements of the market, the second is the lack of funds for financing.
How not to end up in the startup graveyard and launch a really successful MVP?
PoC, RAT, MLP, MVP?
It is not uncommon for Minimum Viable Product to be confused with other hypotheses testing approaches. Let’s separate the flies from the cutlets.
PoC or Proof of Concept serves to prove an idea, a concept. For this, it is not necessary to develop a product. To check that the future project is interesting to the market, you can use surveys, make a small landing page and collect lead applications from the announcement. PoC serves as a preparatory stage and a small guarantee that the future product will be of interest to the audience. The MVP is already offering the product and testing it.
RAT or Riskiest Assumption Test checks the most risky assumption, a product can also be created for this, but they follow the cheapest path. The main tasks in the RAT approach:
- Make your wildest guess.
- Check it out in the cheapest way.
- Get feedback, make a conclusion to include the hypothesis in the MVP or not.
How to use RAT? See below
MLP or Minimum Loveable Product is a bit broader than MVP, it serves to win the loyalty of the first buyers. You create a product in order to stand out from the competition and find advocates for your brand. This is still a minimal version of the product, but in this version you will pay more attention to the interface or shopping experience.
Below we have compared all approaches, with an example:
Stages of creating an MVP
So, the main stages in the development of MVP can be identified as follows:
1. Determine the goal
Your service, product or service should be a solution to some problem or close some task. Ideally, it should also be interesting to the buyer. Figure out how your product should help customers.
2. Research the audience
To better understand who you are creating a product for, segment customers into groups and describe their portrait:
- income level;
- marital status;
- habits and hobbies;
- ways to search for information;
- how customers make a buying decision?
Segmentation will help you better understand what motives and incentives will encourage your audience to convert on the site, what drives them when making decisions. Having found out this, you will understand what functionality is worth working on, and what can be postponed for now.
For example, the target audience that buys equipment for yachts lives in private houses, they have their own berths and, when making purchase decisions, they are guided by the reviews of acquaintances and YouTube videos. Therefore, the ability to watch videos, reviews will be an important advantage.
3. Analyze competitors
Find out if there are similar solutions on the market. Who are your competitors, what functionality do they offer, what are their main features. Serpstat, Popsters, search by key queries, industry ratings, analytical reports on the venture market will help you here.
4. SWOT analysis
Once you have a specific audience, competitor offers and the main goal of your product, make a list of your:
Strengths and weaknesses reflect the internal characteristics of the product itself. Based on them, as well as external factors, it turns out what opportunities your product has, what potential it has, what threats or risks the product may face.
Make a map of risks and rank each of them, depending on the likelihood of the event occurring and the consequences that the event will entail. Prepare a strategy to prevent these threats, plan for weaknesses, and use opportunities to the maximum.
5. Describe the Customer Journey Map
Look at the product from the customer’s point of view. The customer journey is the course of action on the site that the user must complete in order to purchase a product or use a service. CJM shows how the client will interact with the site.
It should be not only short, but also convenient. There can be several user path scenarios and they can describe not only actions, but also the way of thinking and emotions.
To get more than just a sales funnel, describe the actions that relate to both visiting the site and the stage after the sale. CJM will help you find out at what stages you need basic functionality, at what additional ones, what page prototypes will be required.
6. Highlight the main thing in the functionality
This will help to prioritize and divide the work into stages. To create a minimal product, you need to highlight the functionality, without which the product cannot cope with the solution of the client’s problem. For example, buy a product, find and select a hotel for booking. Developing additional functionality may turn out to be an unnecessary investment, since after the launch you will receive feedback and will know exactly what exactly needs to be added and where.
7. Approach to development
Depending on the detailed terms of reference, budgets and the degree of involvement in the development, choose the appropriate way to work with the development team. This could be Scrum, Kanban, or a mix of approaches to improve the product as feedback comes in.
MVP should be tested regularly. Testing internally will help to release the product without errors. Testing on real users will help to collect the first feedback to find out how the current functions work adequately.
After the launch of the MVP, it is also necessary to constantly test in order to technically improve the product.
What mistakes should be avoided when creating an MVP
1. Excessive idealization.
The main task of an MVP is to launch a product quickly in order to test hypotheses. When working on the minimum functionality, do not forget that it should perform the main task. This means that if you need a buy function, then there should be a button, a shopping cart, a checkout, and payment methods. Functions such as compare products, offer analogues, collections and accessories are aimed at upselling. You can work on them after you are convinced that the market is interested in the idea.
2. Minimal does not mean unfinished.
MVP saves your budget by limiting the development of quantity, but not the quality of functionality. To get reliable test results, your minimum functionality must work well. Otherwise, buyers will refuse the product not because of its uselessness, but because of the difficulty of acquiring it.
3. Ignoring feedback.
Respond to feedback in a timely manner to avoid shortcomings. To do this, use quantitative metrics:
- dynamics of the number of users;
- average time spent on the site;
- conversion rate or number of paid users.
And also conduct qualitative research to get emotional and detailed feedback. We wrote more about metrics in a previous article.
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