Minimum Viable Product (MVP): What is the Meaning & Benefits?

 I want to open a business but the product is not ready yet~

If you think that to start a business you must have the perfect product, that's a big mistake.

When you plan a product for too long, it could be that the tastes of potential customers have changed again. In fact, your business doesn't even move at all.

But if it's too soon, why don't you want to give a makeshift product to potential customers?

So here, we will introduce you to the minimum variable product (MVP) . MVP is a term in product development, which can change your mindset about business.

Curious how? Let's see this article!

What is a Minimum Viable Product (MVP)?

MVP is a product with basic features that have high usability even though the form is not very sophisticated. MVP is deliberately created to attract the attention of users. The goal is to validate business ideas, study user experiences, and get product-related feedback. That way, products can be developed better in an efficient way.

Well, the term minimum viable product (MVP) first appeared in the book Lean Startup by Eric Ries. MVP is an important part of product development . Especially for startup companies.

Indeed, how big is the benefit of MVP? Broadly speaking, MVP is useful for:

• Keeping product development focus on key features;
• Help companies better understand the needs of the target market;
• Test the product's potential success in the market firsthand;
• Minimizing the risk of loss due to launching inappropriate products;
• Save production costs;
• Receive feedback from the target market quickly to improve product quality.

Because the minimum viable product only offers basic features, the investment that the company incurs is also less. Both in terms of time, resources, to the potential for product failure.

The goal of MVP is to…

The biggest risk that haunts startup companies when launching a new product is that the product is not accepted by the public. It failed miserably, even though the company's resources and costs were quite high.

Therefore, startup companies need MVP in products. The goals of MVP are to:

1. Release Products to Market Quickly

MVP allows you to quickly release your product to the market. Thus, the product can be immediately enjoyed by customers and the company gets feedback for evaluation.

2. Accelerate Feedback from Customers

With feedback that is quickly collected, the company will find out the strengths and weaknesses of the product as soon as possible. Later, this feedback can be used as evaluation material to improve the final product.

3. Testing Hypotheses with Minimal Resources

Using MVP, you can prove hypotheses based on real conditions in the field. So, it's not just an assumption.

And because the product is a new MVP, the resources you spend are also minimal. Not as big as if it was the final product. Both from material costs, production, labor, etc.

In conclusion, MVP is a tactic for companies to speed up the learning process. MVP can be a reflection so that the company is able to make a better final product and is welcomed by the market.

4 Jenis Minimum Viable Product

Here are four types of minimum variable product:

1. Fisik (Physical)

As the name implies, MVP physical has a physical form. This product users can touch and try directly. Be it food or things. For example: soda drinks, bags, cellphones, etc.

2. Product Design

The next minimum variable product type, product design. This means that the products launched by the company are in the form of designs. It can be software, websites, applications, or other digital media.

3. Piecemeal

Translated, piecemeal means bit by bit . Well, piecemeal MVP means products that are produced from a certain combination of products and services.

For example, you already have a furniture store. Because you want to expand your market reach, you also create a website or online furniture store.

4. Concierge

Concierge MVP is a digital product generated through manual experience. The goal is to better understand what potential customers are facing, by jumping directly into the field.

Say you want to create a cash register application. Before creating a product, you try to do transactions manually. In other words, feel the human interactions and processes that occur on the counter.

How to Create an MVP in Business?

Up to this point, you really understand that MVP in business is important. But more importantly, you know how to make it:

1. Do Market Research and Find Problems

First, do some market research . Thus, your picture of the state of the market and the needs of the target audience will be clearer. Here are some types of research you can try:

• Primary research: focus on direct information from potential customers. Consists of quantitative and qualitative research;
• Secondary research: using research data from other parties. Articles, ebooks, news, etc.

From each of the research methods above, you will get a better idea of ​​the behavior to the target market's barriers to doing something. Whether the procedure, design, product malfunctions, and so on.

2. Think Value Proposition

The value proposition is a very important step in making an MVP. It is a tool to help ensure a product/service meets the needs of potential customers.

Using the Value Proposition, you are able to formulate specific product details that the target market needs. Starting from features, benefits, to customer experience.

3. Map the Customer Sales Funnel

To strengthen understanding of customer needs, investigate what stages the customer goes through to reach a purchase decision ( sales funnel ).

For example, your MVP is an online store website. Before release, understand from start to finish, how your target market will find the site to shop at your online store.

4. Prioritize Your MVP Features and Create Hypotheses

Here, you have understood the target market and the design of the minimum variable product features. But so that your product can focus on solving the customer's main problem, you also need to prioritize its features.

Make sure the product addresses the right MVP characteristics:

1. Contains the main gist of the idea;
2. Low production cost;
3. Contains the value that customers need;
4. Have room for future iteration or development.

To determine which features you should prioritize, please create a hypothesis. Then, do the scoring. It's as simple as filling out this table (values ​​one to five):

5. Launch MVP

Now, it's time for you to launch MVP. Remember, the minimum variable product is not a perfect product.

You build MVP is not to make the highest possible profit. Rather, to gather insight as deeply as possible . So, the most important thing is to see how your product is responded to by the target market.

6. Do BML

Your task is not finished. Once MVP is launched, continue to build-measure-learn (BML).

BML is a cycle to build a product, measure indicators of customer satisfaction and product performance, and then study it. Of course, don't forget to collect consumer feedback.

From the results of the BML cycle, then compare them with your hypothesis. You can use this analysis as material for future strategies.

7. Strategy Pivot

By this point, you've got a detailed understanding of the product's success. Whether it's a success or a failure, the MVP in business tells you whether the company is going in the right direction.

Then, what should you do next?

If the MVP performance is not satisfactory, pivot your strategy. This means that you need to change your strategy while still pursuing the same goals. Then, repeat from the beginning how to create an MVP in business.

But if your MVP is a success, refine the areas that are still lacking and launch a mature final product.

Example of Minimum Viable Product Is…

1. Zappos

Zappos is an American online shoe and clothing retail company. Before it was successful until it was acquired by Amazon for $1.2 billion, 20 years ago Zappos was just a simple shoe store with a makeshift website.

Nick Swinmurn, founder of Zappos or formerly known as Shoesite.com, initially set up an online store without owning the original product. Nick simply posts photos of the shoes he wants to sell on the website.

When someone orders it, Nick just goes to a conventional shoe store and buys it. Then, he himself sent the shoes to the customer.

2. Dropbox

The next minimum viable product example is Dropbox . Maybe, you are already familiar with this cloud-based file storage service.

Who would have thought, Arash Ferdowsi and Drew Houston actually launched Dropbox before they even built the product?

Initially, Arash and Drew shared a simple video showing how DropBox works.

Unexpectedly, the video was successful in capturing 75,000 registrations from people who are interested in DropBox.

With a warm welcome from the community, DropBox continued their project. Now, DropBox has managed to become one of the largest and most popular file storage services in the world.

3. Groupon

Next up, there's Groupon. Groupon is an e-commerce that helps people find their best vouchers, coupons and cashback.

From the start, Groupon has focused on its business goal: distributing coupons with a subscription system. Later, Groupon will send coupons to subscribers via their respective emails.

Well apparently, the way Groupon runs MVP is through a simple WordPress website. The main thing, from there Groupon managed to collect email lists from potential customers.

From there, Groupon slowly began to improve to redesign the site so that it looks like it is now. Not only that, but also enrich the supply of vouchers in their storefront.

Let's Launch Your MVP Now!

Now you have understood the meaning of MVP. MVP is a product with basic features that are purposely made for the company's research needs.

With MVP, you can get product insights and feedback faster. Including seeing if your final product is responded well or vice versa. From there, you can improve the product or move on to product ideas that are more attractive to users.

To create an MVP, you can start from something simple. Just like Zappos and Dropbox did with their simple websites.

By creating a website, it will be easier for you to assess product performance later. Remember, there are many tools that you can use. Google Analytics, for example.

So if you don't want to bother creating a website from scratch, please consider Niagahoster Instant Website.

In addition to getting a website with a ready-made theme, you are also provided with various interesting features according to the design of your choice. The Online Shopping theme, for example, is complete with these features:

• Product list;
• Customer-only member;
• Product orders;
• Integration of delivery services;
• And many more.

So, what are you waiting for? Let's launch your MVP right now!