To successfully build a mobile app, a web app, or software, startups often have to come up with a minimum viable product (MVP). An MVP provides immense value to businesses by allowing them to gather feedback from real users spending only a small fraction of the development cost required for full-scale production. Let’s talk more about these and the other benefits of MVP development.
Funding is essential when it comes to getting a startup up and running. It is estimated that roughly 29% of all startups fail due to a lack of funding in the first 12 months, and that’s one of the most common reasons for their shutdowns in general.
Pitching a product to an investor is very difficult: you have to go through a lot of preliminary market research, find a solid product-market fit, and prove there’s a customer for your product. You can do the latter through building MVP and allowing your audience to use and review it — and then show the MVP, along with their reactions, to investors. (Building an MVP isn’t easy, though, — Purrweb at https://www.purrweb.com)
When CB Insights is talking about startups running out of funding, it’s not only about them failing to attract investors. Sometimes, though, startups burn through funds they’ve already landed much faster than they’ve been estimating (especially if the first investment was indeed generous.)
To avoid it, you can optimize your product-related spending from the beginning; build an MVP instead of investing in extensive end-to-end development. That also lets you reduce the cost of potential mistakes: if your hypothesis about product-market fit is wrong, underresearched, or too raw, building a big product will cost much, much more than creating an MVP.
Apart from that, the software can take years to develop. Your in-house team — or a software vendor — can build an MVP in several months, sometimes even weeks, depending on your idea. It gives you a solid basis to build a pitch deck around — and cuts the idle of not talking to your customers.
(Note: that’s only one way to avoid running out of money when you’re a founder and it’s not a solution to everything. Kirsty Nathoo, CFO of YCombinator, says the majority of early-stage entrepreneurs she talks to don’t even know their runway — and the perks of resources, saved with MVP development, won’t help with that.)
Test Among Users Before Release
The only way to reduce uncertainty in whether your idea will resolve your users’ pain is to conduct a comprehensive market analysis, talk to them, and invite them for, ideally, multiple test drives. Startups don’t do it often. That is why 1 in 4 users bin the downloaded apps after opening them once.
With MVP, you can test your app before you decide to scale. They can test new features as they occur. You can watch them use the MVP and pinpoint where you got the user flow wrong, where it’s hard for them to find what they are looking for. You can check your MVP’s accessibility. You got that.
Through user testing, your potential users are becoming your collaborators and advisers, — and you have the opportunity to enrich your knowledge about them through high-quality qualitative data (because that’s what the conversations are.) Within the development process, this data becomes your guide for crafting a solution your audience will adore.
But all that testing MVP among users can bring you another benefit…
Faster Release To The Market
Users who test your product will become your most loyal first customers if you’ll show them value in the pre-launch process. If you document the process and listen carefully, you can use their feedback in your promotion strategy — and speak about the audience’s challenges in the audience’s tone of voice.
Their feedback will allow you to target the most critical pain points, refine your business model, monetization strategy, and the MVP itself and deliver an amazing first-run for the next wave of users. Consequently, they’ll get the word about your product to other people; referrals are one of the most efficient ways of customer acquisitions.
There’s also a question of competition. When you’re stuck in a development loop or can’t get out of the research pit, you’re still aren’t on the market — but your rivals might be. MVP is a good way to beat them to a launch and occupy a niche — with good marketing, it’s possible even with a minimal number of features.
Early-stage startups benefit a lot from building an MVP. It saves them loads of money and reduces risks that, if encountered after a full-blown, full-scale launch, can (and does) kill a business.
MVP can become an asset to your marketing strategy. Put it on the landing page — with a description of what these few features embedded in it do for user’s issues — and complement it with a form that gathers email to inform about the launch and a feedback form.
You can also show the process of MVP development — and scaling and refining process after MVP launch — in your social media. Users always trust companies who express their humanity and share info about their internal processes in an honest, open tone more than those who do tedious corporate talks about perks that bring their Amazing Shiny NewGen Tech. Even if you are building MVP within a B2B business model.
Finally, a word about B2B. Often, startup founders forget that what they think processes in, for instance, banking and travel look like is based on a lot of conjectures rather than facts. User testing is possible and very helpful for your startup if you plan to build an enterprise solution, automation software, or any other tech that will be used by the organization rather than the individual. Find people from the target industries.
Partner with companies from there — try, even if they are intimidatingly successful and popular; even if it’s just for an MVP testing period (they will want to stay if you show good results and customer service). Don’t hesitate to reach out to businesses who, you think, will become ideal customers for your solutions — and do it as early as possible in your operations.