- Details
Nowadays, following the above examples, millions of companies try to build a new business life, and the creation of MVP products assumes some good luck. Let's look at why businesses should think about how to build an MVP at the beginning of their successful market journey.
What is an MVP?
The (MVP) minimum viable product creation helps build a product with a minimum set of critical features necessary for launch.
Many business owners confuse a custom product, an MVP, and a fully-featured product. Let's make some clarifications.
MVP is a product with critical characteristics created for a specific niche. Often, companies develop a minimally available product with custom functionality, which does not contradict the concept of an MVP.
A fully-featured product is a fully equipped project according to a particular niche's and industry’s requirements. It has not minimal but full functionality for work and may include custom elements.
The main difference between these functional models is the cost and development time. Accordingly, the fully-featured product will take significantly more funds and time and may not recoup the costs.
What about an MVP? It helps global businesses to:
- develop and analyze the entire product development system
- receive active user feedback after the launch
- minimize the risks of creating unnecessary inconvenient functions for users
Creating an MVP, above all, helps speed up the process of introducing the product to market. For many companies, including startups with great promising ideas, it is essential to be the first in their niche.
However, companies should rely not only on their sense of the product's uniqueness but also on marketing research and validation of the idea before starting product development. Statistics say that more than 63% of startups in information technologies fail, while in most cases, the main reason is no market need.
If a company starts developing its product after validating an idea and conducting marketing research on the product's value, it’s great. In this case, the business can repeat the fate of modern enterprise giants that started their journey with an MVP product.
Let’s look at the Uber and Airbnb MVP products; they followed the right direction with the product, showing what opportunities they give to their customers, and only then began to develop further.
Uber: MVP product
As for Uber now, it is the largest car-sharing giant with around $17.5 B in revenue in 2021 and approximately 93 million monthly users worldwide.
Airbnb: MVP product
By 2022, Airbnb boats total revenue reached $6B because of a considerable popularity growth and strengthening market position at the end of 2020.
5 Reasons For Building an MVP First
Idea Validation
Idea validation determines if a particular product has a place on the market and whether users are willing to pay for using the product, etc. By choosing MVP development, companies get the opportunity to test the implementation of the product as quickly and cheaply as possible.
Before testing the product with MVP, companies need to test their idea to see if there is a profitable market and opportunities to achieve business goals. However, after determining the feasibility of the product, companies should not rush and choose a fully-featured solution since financial difficulties, delayed development, and deceived expectations in the future are possible.
By selecting a product with core functions, companies minimize financial risks and get an excellent opportunity to test potential customers' attention and receive immediate feedback.
Faster Time-to-Market
The modern digital world is fast and has excellent competition. By choosing MVP development, companies save a significant amount of time, resulting in a product with crucial functionality, fully ready to work.
On average, the creation of an MVP product can take from 3 months to 9 months, which means that customers will not have to wait long.
The faster a high-quality MVP product gets to the market and receives the first client flow, the faster possible work on bugs and improvements will begin, which means the path to the ideal product.
Lower Costs
MVP development is more profitable for different types of businesses because it helps to save significantly. This is because only the essential features necessary for each industry and niche are created. Thus, the company doesn't spend much time on development and saves money, which businesses can later spend on their product promotion, various marketing activities, etc.
Early Customers Attraction
Let’s imagine a situation where companies have come up with an exciting idea, started developing an MVP product, and then launched a message that the product will soon be released. If the idea is new or has long been expected by the audience, the interest in the product will be huge.
Since the development of an MVP does not take as much time as a fully-featured one, users will be able to enjoy the product faster, and the waiting time will not be tedious. Here, companies have a great chance to win over the audience from the beginning and create the best conditions for long-term cooperation, as was the case with Uber and Airbnb.
Fundraising Opportunity
Getting invested has always been the desired outcome for a start-up company. You can get financing if the company interests investors with its idea and demonstrates the development and potential of the product. However, the best option would be to provide a visual MVP that will convince the companions of the practicality of financial investments.
In general, world statistics show that global investments are growing, and their growth is mainly due to private capital. For example, the American private investment company Blackstone recorded a profit from fundraising in the amount of $93B from 2016 to 2021 due to constant successful investments.
Conclusion
Many companies have various ideas that they want to translate into successful business projects.
Most companies remain cash-strapped and are not ready to create a fully-featured product right away. The best idea that will allow companies to only benefit from the development is to create an MVP product that would:
- allow them to validate the idea
- spend less time on development
- enter the market first ahead of competitors
- attract users earlier and boast their attention
- get funding and investor support.