A minimum viable product is an effective way for startups to get their product in the hands of users before thinking about a full-scale launch. The product is built with some features to meet the customers’ needs and to collect their feedback for future enhancement. Most of the products or services that we use today rely on the concept of minimum viable products like Facebook, Airbnb, Groupon, Dropbox, Buffer, etc.
MVP design and development allows startups to complete an agile cycle of the Build-Measure-Learn by offering a basic product to the customers and getting feedback from them. Now that you understand what MVP is, let’s discuss it further to understand the prime benefits of MVP for startups.
According to CB insights, in 35% of cases, poor market, product, development, and customer research resulted in product failure.
What are the benefits of building an MVP for startups?
Here are the best six benefits of MVP development for startups that ensure a successful product launch, from testing business ideas and gauging monetization opportunities to validating market demands and investor buy-in.
1. Test business ideas
The biggest advantage of developing an MVP is that it helps your startup to test its business concepts. An organization can validate that its product idea resonates with their target audience, who can interact with the product and provide feedback by providing a basic set of features rather than a full-fledged, feature-rich product.
This information can be used to customize app functionality to meet user expectations. With a final feature-rich product, it would be difficult for the startup to change anything later as they would have to rebuild the entire product.
For example, Instagram is a brand that developed an MVP. Initially, Instagram wasn’t a photo-sharing application just as it is today. Originally, its concept was revolving around a GPS feature. Yet, after it was launched, the makers planned to change the concept based on gathered insights.
2. Create a monetization strategy
Every startup aims to develop a product that turns out to be profitable. Since organizations have multiple product monetization strategies, deciding which plan is best can often be challenging. The right approach in this scenario for your startup is to test a strategic assumption with a minimum viable product.
For instance, if a company creates an application monetization strategy is created for in-app purchases, they can use an MVP to test these tactics and assess their users’ opinions. This scenario will indicate to the company whether this approach is result-oriented, or they should take other strategies to monetize the application.
3. Validate market demand
The reason behind creating an MVP is to test and figure out what works and what doesn’t. Typically, MVPs are developed to understand market demand, not to sell or acquire customers. A lot of organizations are under the impression that their product meets a specific user need; however, this may not be the case.
This reason for this is either that the product is not needed anymore, or that it is already available in the market to address the pain point. An MVP allows startups to test market demand for their product before discovering if users want it and will use it without investing large amounts of money.
Based on these insights, your startup can either rebuild the product solution to enable more market differentiation or develop something entirely new. For any product application to be successful, a business must conduct detailed user research to ensure that their product offers the solution their customers need.
You need a lot of money, time and effort to create and launch a custom software solution. Furthermore, if the entire product idea doesn’t turn out as expected and fails, you may incur a heavy loss in your venture.
On the other hand, a minimum viable product can be developed with minimized risk and low costs. Also, developing an MVP needs very basic functionalities, engaging the development team for a short span of time to complete the project. As your startup begins to acquire more users and gathers more information about the product from the MVP, you can start investing more prudently.
5. Investors buy-In
Nowadays, a lot of businesses rely on investor buy-in to gain funding for their new product. The advantage of getting this buy-in is to build a confident pitch for the product. Although you may have the most innovative idea ever, convincing investors to fund your startup can be difficult. Investors want some assurance for their money and there are risks in every project. Hence, a successful MVP can alleviate that risk. Getting more funds from investors allows you to develop your product application even better, making it a lucrative investment for more investors.
6. Quick product launch
There is constant competition among rising startups to deliver innovative products faster compared to their competitors. MVP development allows them to connect with their target customers at a lesser cost and time. This is how, with a quick product launch, your startup can also get the product tested in the initial phase and with rapid feedback.
MVP – More innovation and less cost
MVP development is a step-by-step journey that involves close interaction between product makers and end-users. A product enters the market through several stages of user experience research and continuous improvement.
It is not possible to develop a perfect digital product in the first attempt, thus minimum viable product development is inevitable. If you want to know more about how to go about developing an MVP, contact our experts, and we will be glad to assist.