The Strategic Advantage of MVP Development for Startups

Many startup founders dream of achieving unicorn status or, at the very least, making a big splash with their product in the market. No matter what you offer to the world, it’s crucial to understand how your target audience will react, preferably before full-scale sales begin. It’s where a minimum viable product comes to the rescue. Startup MVP development is a complex game with multiple variables that can help businesses set sail on the right course from the beginning.

What Is an MVP?

Back in 2005, YouTube started as a video dating site. Instagram, on the other hand, was originally named Burbn (yes, after an alcoholic drink) and served as a planner where people could tag locations, share photos, and earn points. But both ideas didn’t catch on as expected. So, the companies analyzed their numbers, listened to users’ feedback, and made a pivot.

The term MVP, which stands for Minimum Viable Product, is not about lines of code or a website; it’s about testing hypotheses and quickly getting a startup to a functional state. The concept was popularized by Eric Ries through his Lean Startup methodology. It is essentially the earliest version of a product that’s available for testing.

“About 91.3% of the businesses have already launched a product with an MVP approach.” Explore the findings of the recent research conducted by GoodFirms we were pleased to participate as an esteemed Research Partner.

The core principle of the Minimum Viable Product can be summed up as “Dream big, start small.” It’s based on a step-by-step development approach where each iteration is tested with real consumers. This process allows companies to gather feedback, identify risks, fix mistakes, and even gauge if there’s demand for their offering — all at the early stages.

An MVP is like a trial run that helps a startup refine its product and strategy before going all in.

Here are three key principles of a quality MVP:

1. Value to start: The product should offer enough value that consumers are eager to start using it.
2. Future potential: It should contain the core aspects of the product a company plans to develop in the future, making users anticipate the final launch.
3. Feedback loop: The MVP gathers feedback on product quality, helping the company address any shortcomings and enhance the final version.

Each development stage brings the product to a higher level. Then, it gets directly to customers who test it and provide input for potential improvements. This way, MVPs help test hypotheses and avoid bad decisions before they harm the entire business.

It Always Starts With an Idea

The search for great ideas isn’t a straight line. It’s more like loops that sometimes circle back on themselves and occasionally take you to the next step. There are six steps in this process:

1. Problem-finding: Identifying the problem.
2. Solution hunt: Looking for solutions to the problems found.
3. Prototyping: Building a prototype.
4. Testing: Testing the prototype.
5. Feedback: Gathering feedback.
6. Adjustments: Making necessary adjustments.

Each step could be a loop. You need to revisit these steps over and over, sometimes going back a few steps if your hypothesis doesn’t work out. And if the original idea proves unfeasible during testing or feedback, that’s when the product needs to pivot.

The Benefits of MVP Development for Startups

Building and launching a strong MVP is a strategic move that, if done right, benefits startups on multiple levels, from cutting costs and saving resourcing to optimizing the business model and attracting potential investors’ attention. Here’s about the main advantages of MPV development for startups in more detail.

Resource Efficiency

Through early real-world customer testing of the MVP, the company can identify errors during the initial phases. This enables improved financial planning and adaptations to the business model, leading to time savings. Every successive iteration surpasses the prior one in effectiveness. Consequently, customers receive a high-caliber product tailored to their requirements.

Fast Time to Market

Speed really matters in the world of startups. From this perspective, time to market is not simply about being fast but about gaining competitive advantage. The formula is fairly straightforward — the faster you are in the market, the sooner you generate revenue. The MVP approach facilitates the iterative process of learning and improving the offering based on real-world feedback. Put simply, reducing time to market enables startups to capitalize on market opportunities and increase their chances of success.

The Minimum Viable Product enables startups to confront reality swiftly and allocate their budget more effectively before and during the project launch.

Early Customer Acquisition

The examination of each iteration with actual customers aids startups in discovering potential purchasers even prior to the official sales debut. As people test the fundamental MVP features, they can assess the future product’s potential.

Matching Supply and Demand

According to CB Insights, 35% of startups face failure because of no market need. This signifies that the solution the product intended to provide didn’t meet customer pain properly. Grasping and heeding the customer’s wishes and desires is vital. The MVP helps the business align the product with market requirements.

Elevating Investment Prospects

Investors are more likely to think about giving money if they can see a real version as opposed to unrealistic concepts on paper. Being able to use a model of the product and understand its main features makes the project more attractive for getting funded. Generally, investors feel more sure about companies that can show they can do things well and deliver the product on time.

Why Speed Matters

Imagine a startup, let’s call it MedSolution, that has a grand vision to revolutionize patient-doctor communication. The three founders invest their private savings to build a cutting-edge platform with extensive features like AI-driven symptom analysis, in-depth medical record management, and virtual medical tests. Striving for perfection, the founders spend over a year creating their product and perfecting each intricate detail.

Meanwhile, the market’s needs shift. Users now favor simplified telemedicine platforms that offer quick video consultations and easy appointment scheduling. By the time MedSolution launched, they found themselves with a feature-rich product that was out of touch with what users wanted — timely and accessible healthcare.

The delay cost them not only their chance to capture a loyal user base but also the trust of investors who sought adaptable and agile ventures.

In turn, a parallel startup, let’s call it VitaCare, monitors the shifting landscape and takes an alternative approach. They quickly launch a stripped-down MVP — a straightforward video consultation platform connecting patients with doctors instantly.

By focusing on speed and user feedback, VitaCare addresses the immediate market needs. With each release, they iteratively add features based on user input, gradually expanding their offering. They grow and develop with a limited budget till they build the product that can attract investors’ attention and expand dramatically.

In this hypothetical story, MedSolution’s meticulous development approach led to a well-crafted product that didn’t match what users actually wanted. On the other hand, VitaCare quickly made a simple product that people needed and improved it based on their feedback. The alternative way took VitaCare to user engagement, investor confidence, and sustainable growth.

Main MVP Types

The MVP’s main goal is to test the upcoming product with a real audience. It means that the quality and accuracy of the test results can notably influence how quickly and effectively the development process goes. That’s why there are two main types of minimum viable products — high-fidelity and low-fidelity. These can be combined or used concurrently.

Low-Fidelity MVPs

These MVPs have lower reliability and imply simplified data collection methods. They don’t require extensive programming or significant financial investment but provide less precise outcomes. Their main objectives are:

• To assess the practical value of the product.
• To identify the most effective and sought-after solutions to the problem.
• To aid in defining and understanding customer needs.
• To conduct a niche analysis and determine if the game is worth the candle.

Here are some low-fidelity MVP types:

1. Blogs: Creating simple blog posts to gauge interest and gather feedback on a product idea or concept.
2. Forums and communities: Engaging in discussions within forums or online communities to validate demand and gather insights.
3. Surveys and questionnaires: Conducting surveys to gather user opinions and preferences related to the product idea.
4. Landing page: Designing a basic landing page highlighting the product concept and capturing user interest.
5. Explainer video MVP: Developing explanatory videos to showcase the product idea and its potential benefits.
6. Advertising campaign: Running targeted ads or promotions to assess user response and measure interest.
7. Crowdfunding campaign: Launching a campaign on crowdfunding platforms to validate demand and attract backers.
8. Idea review services: Utilizing platforms that review and assess new ideas, validating interest and potential for development.

High-Fidelity MVPs

These MVPs require more preparation, resources, and analytical work. They are used for:

• Formulating and enhancing marketing approach.
• Experimenting with value offerings, modes of communication, and calls to action.
• Investigating feasible expansion tactics.
• Gaining initial patrons and footholds in the market.
• Evaluating data regarding the appetite for the newly crafted product.

Here are some high-fidelity MVP types:

1. Feature MVP focuses on building and releasing a product with a single core feature. It’s often used to test the viability and demand for a specific feature before investing in full product development.
2. Single-Use MVP is designed to solve a particular problem for a specific audience. It targets a niche need and aims to demonstrate the product’s value in a highly focused manner.
3. “Concierge” MVPs is an approach when the product is manually operated by the development team, simulating its functionality for users. This helps validate the concept and gather user feedback before building a fully automated version.
4. “Wizard of Oz” MVPs are similar to the “concierge” MVPs. They involve manually providing certain features the user believes are automated. Behind the scenes, the functionality might be manual or simulated. This is useful for testing user reactions and gauging demand.
5. “Piecemeal” MVPs involve building a minimal version by integrating third-party tools, services, or platforms. This helps test the integration and user experience while minimizing development effort.
6. A non-functional prototype MVP (or a mockup) is developed to visually represent the product’s user interface and interactions. This can be useful for early-stage testing and feedback on the design.
7. Pre-order MVPs involve offering the product for pre-order, where customers can place orders for a product that’s not yet fully developed. This provides insights into demand and allows for early revenue generation.
8. In smoke test MVPs, ads or promotions for the product are run to gauge interest. When users click on these ads, they might be led to a page indicating that the product is “coming soon” or “under development.” This helps validate demand before investing further.
9. “Concierge” onboarding MVPs involve manually guiding users through the onboarding process and helping them achieve their goals using the product. It provides insights into user behavior and pain points.

The choice of an MVP type depends on the product’s nature, goals, target audience, and available resources. The key is to create the simplest version of the product that can effectively validate assumptions, gather feedback, and demonstrate value to potential users.

Building the Foundation: Final Thoughts on MVP Development for Startups

Building an MVP is about the process, in contrast to, for example, drawing a visual prototype. It’s about the process of hypothesis testing, collecting feedback, improvements, and entering new niches. Mastering this process helps prevent wasting money and energy on creating useless and needless products — which, in turn, means better market environment and conditions.

This process, however, can be overwhelming and confusing. That’s where it makes sense to look for trustworthy MPV development services for startups. Finding an experienced tech partner focusing on guiding new ventures through the complexities of the process may become the first step in the journey to becoming a unicorn