Launching a new product is inherently risky, especially for startups that have just started their business. Will it cater to customer demands? Will the market even support it? The minimum viable product (MVP) serves as a powerful strategy to mitigate these risks. The concept of “minimum viable product” was first popularized by entrepreneur Eric Ries, who is also known for his contributions to lean startup methodology. Instead of investing heavily in a full-fledged product, an MVP allows companies to test product hypotheses with a simplified version, gathering valuable feedback before committing significant resources. Let’s explore the meaning of a minimum viable product (MVP), its purposes, and how to develop it.

What Does Minimum Viable Product (MVP) Mean?

Minimum viable product, also known as MVP, is the basic product development model that only includes the essential features necessary for early adopters to use and interact with. An MVP must solve a significant problem for users, providing enough value that customers are willing to pay. It has become a standard tool for startups to test their products, as the MVP is used to observe how real users interact with the product so they can gather feedback and improve their products before launch. 

What Are the Purposes of Minimum Viable Product?

Minimum viable product (MVP) is a crucial strategy to ensure the success of the actual product during its official launch. Here are some purposes for developing an MVP:

Testing Product Hypotheses

The primary goal of an MVP is to validate product ideas by testing product hypotheses with real users. The MVP allows companies to gather insights about customer needs and preferences before investing significant resources in full-scale product development. Companies can also validate whether there is genuine demand for the product by using an MVP.

Reducing Development Risks

MVP serves as a low-risk testing ground for the products before they are ready to launch. By validating product ideas through user feedback before committing to extensive development, companies can ensure that their products meet the market needs and demands. Through MVP, companies can also refine their products based on real user insights.

Faster Time to Market

The MVP approach can shorten the time from concept to launch. By concentrating on core functionalities, companies can bring their products to market more quickly and capitalize on emerging trends or demands before their competitors. With MVP, companies can also establish their presence in the market and start gathering user feedback sooner.

Gather User Feedback

By launching a basic version, businesses can collect valuable insights from early adopters to improve the product. When companies launch an MVP, they release a basic version of their product that includes only the most essential features. This allows early users to interact with it, test its functionality, and provide feedback. It is crucial to refine your product based on real user insights.

Cost Efficiency

Developing a full-featured product can be time-consuming and expensive, especially for startups. By focusing on developing an MVP, companies can launch a basic version of their product quickly and economically, minimizing initial investment and financial risk. Companies can also allocate resources more effectively and avoid the pitfalls of investing in untested ideas.

Proof of Concept VS Minimum Viable Product: What Are Their Differences?

Proof of concept and a minimum viable product are two critical terms in product development. Both serve as the foundation of successful products, but they have different purposes. 

Proof of Concept

Proof of concept (PoC) is a small-scale demonstration that aims to verify the feasibility and potential of a product idea. Companies commonly use PoC to test a product’s technical or functional aspects before requiring a fully functional product. The objective of PoC is to mitigate risks by confirming that the product idea can work in a real-life scenario before investing significant resources in product development.

Minimum Viable Product

Compared to proof of concept, minimum viable product (MVP) represents a more advanced stage in the product development lifecycle. It only includes the essential features necessary for users to interact with. The objective of MVP is to gather feedback and validate the product’s market fit by developing the early version with basic functionalities.

How to Develop an Effective Minimum Viable Product?

If you are an entrepreneur wanting to build a successful product, developing a minimum viable product is a strategic approach to test your products with minimal resources while gathering valuable user feedback. Here are the steps to develop an effective minimum viable product:

Identify the Problem to Solve

Start by defining the specific problem your product aims to address. To validate the problem and solution, conduct thorough market research to understand your target customers, their needs or pain points, and the existing solutions they use. For example, if your target audience’s problem is tracking and managing various work projects efficiently, you can develop an MVP for a project management app to answer this problem.

Conduct Market Research

Performing extensive market research is essential to validate your idea. This includes running surveys, focus groups, talking to your potential users, and competitive analysis to gauge demand and understand user preferences. Clearly define your product’s unique value proposition and how it stands out from competitors. This step is crucial as it helps mitigate the risk of building a product that may not have a demand in the market.

Define Core Features

After conducting market research, create a list of essential features that your MVP must include to solve the identified problems faced by your target audience. Differentiate between “needs” and “wants” by categorizing these features into high, medium, and low priority. You should focus on developing only the core functionalities that provide value to users. 

Develop the MVP

The next step is developing your MVP based on the insights gathered in the previous step. Make sure your MVP is functional enough for users to interact and provide feedback, but it doesn’t require perfection at this stage. The goal is to launch quickly and start gathering feedback from users. For example, if you are developing a mobile app, this may be an app with a single feature or a few basic features.

Launch and Gather Feedback

Launch your MVP to a small group of early users to gather feedback. Collect feedback through surveys, analytics, or direct user interactions. This step is essential to see how well your MVP meets user needs and where improvements are necessary. 

Iterate Based on Feedback

Next, analyze the feedback gathered and identify areas for improvement or additional features that users desire. Use this information to refine your MVP and enhance it based on real user experiences and needs.

From MVP to Market Domination: Funding Solutions from Phintraco Natha Kapital

The journey from a minimum viable product to market dominance requires more than just a brilliant idea but also strategic funding and expert guidance. Phintraco Natha Kapital understands this transition and offers tailored investment solutions to empower businesses at every stage. Our diverse portfolio spans a range of sectors, including our core strength in ICT – encompassing IT infrastructure, contact center solutions, token technology, and more – as well as emerging opportunities in property, manufacturing, and education. We provide not just capital but also the advisory services and technological expertise necessary to scale your MVP into a market-leading product.Phintraco Natha Kapital believes in investing in the founders as much as the business itself, providing personalized support and guidance tailored to your unique needs. Choose Phintraco Natha Kapital, and let us help you transform your MVP into success. Editor: Trie Ayu Feminin & Irnadia Fardila