How to set up an MVP for your startup: 5 essential tips for building your Minimum Viable Product
In this article, you will understand how setting up an MVP is important and you will learn some fundamental tips for building your own and validating your startup.
Many businesses fail during their first year of existence. The reasons are varied, but include legal issues, poor business model, fierce competition, lack of investment and poorly analyzed market, etc.
Based on the information released in the study Inside Venture Capital, created by the innovation company Distrito, despite the fact that, in the first months of 2022, around US$ 1.36 billion was allocated to Brazilian startups, on average 90% of them failed during this journey.
The good news is that it is possible to predict and prevent some of these problems, preventing your business from being part of the negative survival statistics in the market. Do you want to know how? That's what we're going to talk about.
What is MVP?
The term MVP (Minimum Viable Product or minimum viable product) is a methodology popularized by Eric Ries with the objective of not wasting time, money and resources and is directly linked to the concepts of Lean Startup.
First of all, it should be noted that, currently, there are several Frameworks/structures to create an MVP, but here we will discuss what Patrick Vlaskovits proposed in book The Entrepreneur's Guide to Customer Development.
According to Vlaskovits, the MVP goes far beyond the systematization of a business, its use allows tests to be carried out on product prototypes before their launch and, thus, makes it possible, through feedbacks of clients and of possible adjustments, assertiveness in building a sustainable business.
The construction of a Minimum Viable Product must occur when a product or service is not yet in its final stage, but can no longer be considered unfinished, but a leaner version capable of going to the real world and being tested by its consumers.
In this way, the company has the possibility to reduce costs, understand if the product needs to be improved before its final development, and even to know how the public is reacting to this solution.
This testing phase is extremely strategic and allows for the collection of information, validation or not of the solution, and allows the complete visualization of market and competition reactions in relation to the product or service offered.
If there is a positive response after this analysis, the company can also notice the gaps faced, allowing for prior improvement and guaranteeing greater acceptance and profit margins, since the product can be launched in a more optimized and personalized version. Let's see in practice how this happens.
3 Cases of successful MVP's
The success or not of an MVP is directly related to the correct use of the chosen methodology. Some Examples of innovative Brazilian startups show us how, through a well-applied embryonic idea, a business can stand out in the market. Here are some others Cases successful:
01 - Dropbox:
Dropbox was created through the development of the structure of a cloud-based file synchronization service, but until then, there were no people interested in this type of service. It was then that Arash Ferdowsi and Drew Houston, the founders of Dropbox, decided to go directly to the final audience by applying an MVP made through a video to promote how the app would actually work.
02 - Uber:
In 2008, the founders of Uber had a Insight for his dissatisfaction with the use of transportation in San Francisco. This motivated the entrepreneurs to create an MVP, based on an established need, made with a low budget and which generated a ride-hailing app that initially ran only in their hometown.
Through the data obtained by this prototype, several improvements were made and soon the service that we know today was launched.
03 - Spotify:
In 2006, the music industry faced several problems related to piracy. Many sites provided online access to music that, until then, only generated recipes in physical form. After realizing the problem and developing a solution, the founders of Spotify created an MVP, through a desktop application that offered streaming of music with ads to generate revenue.
The use of this tool generated information that evidenced the desires and needs of the market - an accurate move.
Advantages of applying for an MVP
The creation of a product, the analysis of the market, the cost, and the feedback from the public are of the utmost importance for the creation of a successful product. Perhaps, therefore, it is almost impossible to underestimate the impact of developing a Minimum Viable Product. Among its numerous benefits, we can mention:
- Cost reduction: It is normal for an entrepreneur to be frightened by the need to build an MVP, because this involves the application of resources and inputs to the construction of a prototype. However, in these cases, the price of the error is substantially lower than if the final product were launched directly to the market;
- Information collection and feedbacks of users in an interactive way: with an MVP, it is possible to discover gaps in the most and least popular features of your solution and apply the necessary improvements. In addition, you are able to identify whether additional functions will be required;
- Time savings: creating a base model requires less effort. According to Lean Startup, the first version of an MVP usually takes about 12 weeks to build (including programming and design phases);
- Attracting investors and first paying customers: Here, the advantages are obvious, if your product starts to generate more revenue, you can, consequently, improve your product.
Thus, since MVP allows validation with real data, cost reduction, product improvement, data collection, it definitely puts your company on the market's radar.
Therefore, it causes you to move on to Visionally think like a startup and be able to establish effective planning based on real strategies, needs, and analyses.
Tips for Implementing a Successful MVP
Finding out which MVP is right for your company is not an easy task, you need to analyze the scenario, understand your product and its characteristics, analyze your target audience and draw up your success metrics (KPI's). To assist you in this endeavor, here are some steps for building a successful MVP:
- Build a team:
The choice of a team goes beyond drafting the MVP, as you need professionals capable of offering a broad view of the scenario in which you are inserted, who have design techniques and who understand the need for your solution. In short, assemble a plural team that is capable of validating every aspect of your service/product.
- Understand the market need and customer pain:
For an idea to be well executed, an analysis of its need is necessary. That way, after having the team assembled, it's time to do research and trace your ideal customer and what your pain is.
- Define the product:
To define the product, two steps are fundamental: the first is to define what pain of your audience you want to solve and how you can do this, and the second is to define the attributes of your product, the functionalities, the features and executions that it will possibly have.
- Define the variables to be tested:
Design different versions of the same product and choose which versions you want to use for testing. After that choice, define which indicators will be used for data collection and the goals that will characterize the success of your product.
- Define when, where, and how the product will be tested:
Defining where the product will be distributed and publicized, whether it will be made physically or online, and estimating how long it will take to collect data is essential. After these estimates, it is important to structure the presentation for your consumers.
- Analyze the data
Analyze the feedbacks of the market and customers, understand the risks and advantages of the product and improve the final version based on the knowledge collected.
The MVP is an essential and efficient part of an experimentation strategy, since the product is made with a minimum set of resources and allows for the possibility of improvements so that it is more assertive.
However, even though it is essential to validate a business idea, the MVP is not the only tool to optimize within a startup.
When starting a business, the search for improvements and tools that facilitate the entrepreneur's daily life are essential. In this sense, Clicksign's solutions are perfect for reducing costs and managing all phases of your company.
Now that you know how to set up an MVP, come and see our solutions as well, test our platform for free and build a valuable brand in the market.
