Minimum viable product: Why every business should think like a tech start-up
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Posted: Mon 29th Jul 2024
For the average SME business owner, the concept of a 'minimum viable product' (MVP) might sound like ridiculous jargon. However, there’s a lot that can be learnt from this simple principle, which is rooted deeply in the start-up world.
It’s all based on the ability to innovate while reducing risk. So, what exactly is an MVP and why should every business consider this approach?
What is a minimum viable product?
An MVP is the most basic version of your product that still allows you to release it to market.
The aim is to gather as much feedback as possible about customers with the least effort. It isn’t about cutting corners or delivering a substandard product.
Rather, it's about focusing on core features that meet your customers' primary needs and nothing more. This approach helps avoid the costly and common pitfall of developing features that your customers don't actually want.
Example: An accountant might want to start a networking membership club for local manufacturing businesses.
Instead of selling memberships from day one and spending time and effort on marketing, they might decide to put on a small event first as an MVP to gauge interest and feedback from the target clients.
Start small: Embrace the Lean Startup methodology
The Lean Startup methodology, pioneered by Eric Ries, is about building businesses and products that are sustainable over time through a rigorous, hypothesis-driven approach to product and business development.
Starting small means pinpointing the essential features your product needs to function and meet customer needs, then building only those. This doesn't just conserve resources, it also allows you to test your product’s viability early in the development process.
Example: Consider a local bakery that wants to start selling online. Instead of developing a full-fledged e-commerce website with all the bells and whistles, the bakery first creates a simple webpage featuring a menu, a phone number for orders and a daily update of available items.
This simple page serves as the bakery’s MVP, allowing the owner to test the market’s response with minimal investment.
Test and learn: The cycle of innovation
A key aspect of the MVP approach is the constant process of testing the product, learning from real user experiences and refining the product based on feedback.
This cycle helps in understanding what works and what doesn’t, which can be crucial for businesses that need to adapt quickly to changing market demands.
Example: Product testing helped shape the file storage company Dropbox. The founder, Drew Houston, created a basic video demonstrating the product's concept and measuring user interest before actually building the product.
The overwhelming response from the video provided validation and crucial customer feedback that shaped the final product.
Talk to your customers: They guide your product development
In traditional businesses, customer interaction often comes after the product development process. However, in an MVP-focused strategy, talking to your customers from the outset is crucial.
Their feedback informs product development, helping ensure the product meets their needs and reduces the risk of developing unwanted features.
Example: Imagine a garden centre considering a new line of eco-friendly products. By discussing these potential new products with their existing customers, the business can gauge interest and receive suggestions on features even before the products are developed.
Minimum does not mean incomplete
It’s important to clarify that minimum in MVP does not imply an incomplete or poor-quality product. Instead, it refers to stripping down the product to its essentials, ensuring quality in the core features that are developed.
This concept is about smart, scalable growth, where additional features are developed based on solid data and customer demand, not assumptions.
Every SME can benefit from thinking like a tech start-up
Adopting the MVP framework allows businesses of all types to be economical while focusing on building products that their customers actually want.
This approach is not just for tech companies but for any business that wants to stay competitive and agile in a fast-paced market.
By starting small, testing, learning and continually engaging with customers, businesses can foster innovation and growth without the substantial upfront investment traditionally associated with new product launches.
Embrace the MVP mindset and let your customers' needs drive your business innovations.
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