June 1, 2021
What Is an MVP, and What Is It Used For?
One of the biggest concerns when it comes to launching a new product is whether people will actually want to use it and pay for it. Fortunately, there’s a way to minimize risk and gain greater clarity on your product’s viability. You release an MVP. What does “MVP” mean? The letters stand for Minimum Viable Product. Simply put, it’s a software product that satisfies the minimum requirements to solve a problem or satisfy a need.
Javier Trevino, Director of Technical Services at 3Pillar Global, offers this definition: “A minimum viable product defines the minimum effort to complete a process from point A to point B while disregarding anything that is not critical for the process to be successful. This is also known as a happy path.” But don’t be fooled by the word “minimum” here. Approached correctly, an MVP is a valuable and powerful learning tool for your business.
This article will explore the fundamentals of this key step in product development and explore an MVP’s meaning, benefits, and characteristics.
Releasing an MVP before launching a final product brings many benefits. For starters, MVPs allow for Agile development cycles. Among other principles, Agile employs design processes that facilitate rapid iteration. In practice, that means your product can get to users faster. Those users will then provide feedback that informs the next development cycle. This iterative process will ideally provide a shorter path to realize ROI.
MVPs can also provide critical early insights. As Scott Varho, SVP for Product Development at 3Pillar Global, points out, “The sooner you can start learning from your buyers and users with a functioning product, the sooner you can unlock value.”And value, in this case, means identifying a solution for a problem that customers would be willing to pay for.
Another great benefit to releasing an MVP is that it can save your company time and money in the long run. Varho explains, “If your potential buyers don't see the potential or don't think it's valuable enough to pay (or pre-pay for a future version), then you may not have a product worth continuing to invest in.”
What is the MVP Used for?
Along with a host of benefits, there are multiple practical uses and applications for a minimum viable product.
At the end of the day, your MVP is still a product. It’s a very early stage product, but it’s a product nonetheless, and as such, it should be viewed as a functioning learning tool. Among other things, an MVP can help you prove hypotheses on value generation and success metrics. You can’t learn if you don’t measure. You want to use your MVP as a way to test your product’s potential value in the market by using whatever success metric is appropriate for your use case.
Related to the above point, a minimum viable product is a useful tool to assess risk. Because an MVP represents a minimal usable feature set, it’s a relatively quick way for you to determine the risks involved in launching the full-fledged product.
If you’re looking to validate assumptions about your product (and you should be), an MVP is a critical component of your strategy. The term MVP was originally coined by Eric Ries as part of his Lean Startup Methodology, with a strong focus on validation. He says, “The minimum viable product is that version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort.”
While a minimum viable product was originally discussed by Ries in relation to startups, it’s still a valid and important tool for more established companies to test the viability of their product as well. That said, an MVP will look different for startups vs. established companies. Bernie Doone, Director of Information Services at 3Pillar Global, points out that, “Viable for an established company will mean the product can generate revenue and ROI, while viability for a startup may solely be rapidly learning and iterating. For both, the common goal is establishing product market fit and self-funding products.”
Key MVP Characteristics to Consider
To learn the most and get the full value from your MVP, keep some important considerations in mind. First and foremost, spend as little time and money on the MVP as possible. Otherwise, it defeats the purpose of low-risk, low-cost validation.
Diana Sabau, Technical Manager at 3Pillar Global, explains: “A Minimum Viable Product should be created to validate an idea or assumption as fast as possible and measure customer traction, without investing too many resources from the start. Such a product should contain a smaller but cohesive set of features that could attract users to discover the application, give feedback so that the development team can iterate and ideate further and improve it.”
And it’s worth noting that, depending on your use case, an MVP doesn’t necessarily need to be a software product, although it usually is. In some cases, something as simple as a working honeypot website, for example, where you test whether your value prop is compelling enough to get people to sign up for more information, could be a valuable way to test your hypothesis.
Other characteristics of an MVP include:
- An MVP must be usable. It’s a product, remember, and if it doesn’t function, you can’t test anything with users.
- An MVP must seek to solve a problem. If the MVP doesn’t solve a problem, then there won’t be any product market fit. Part of the reason you spend as little time and resources as possible on your MVP is to minimize your own risk if it turns out your assumptions were wrong about the problem you solve.
- An MVP is the minimum version of your vision. But “minimum” doesn’t mean low quality. As The Pragmatic Institute points out, “The “minimum” is that it needs to viably solve early customers’ top problems from day one, building only those features at first and putting everything else in the backlog until we’ve achieved product/market fit.” In other words, while it is meant to use as little resources as possible, it’s not a throwaway release; it requires careful consideration. Eric Ries cautions that: “ … [It] is decidedly not formulaic. It requires judgment to figure out, for any given context, what MVP makes sense.”
- Your MVP may not end up in the market, and that’s okay. Bernie Doone states, “The Minimum Viable Product may never be released into the market. It may serve as the prototype for learning whether your product is achieving product market fit to improve your product concept before releasing your product in the market. Thus, the MVP may come before the First Releasable Product (FRP)”.
The minimum viable product, or MVP, is a crucial step in testing the viability of your software product. It’s all about gathering the maximum amount of knowledge through the minimum feature set to prove (or disprove) your most important hypotheses about your product’s viability.
But to ensure that your learnings are accurate, it’s wise to balance care and consideration with agility. Alina Perde, Technical Manager at 3Pillar Global, says, “I always see an MVP as the Minimum LOVABLE Product. It's the connection of all the most important parts in the simplest possible fashion.”
At 3Pillar Global, we strive to minimize time to value, solve for a real need, and excel at change. Creating an MVP puts these foundational principles into practice. Learn more about 3Pillar’s services and how we can help you create a minimum viable product to test and validate your assumptions with real customers by contacting an expert today.