How a Minimum Viable Product (MVP) Can Benefit Your Startup
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Teams developing minimum viable products can be compared to alchemists, meticulously conducting experiments to create a groundbreaking potion. The essence of an MVP is carefully selecting ingredients and then measuring and mixing them to find the perfect formula that will deliver value to users. Fair enough, MVP development is a transformative journey that allows product teams to turn basic ideas into "gold".
So, what are the most notable MVP benefits? Let's dive into the myriad advantages that MVP development brings.
10 Benefits of Building an MVP
Every experiment in the alchemist's laboratory is a step toward discovery. And the process of building an MVP is very alike, as each ingredient of the product is selected with purpose and precision. Below, we explore the major minimum viable product benefits.
1. Risk Mitigation, Cut Costs, and Saved Resources
One of the undeniable benefits of minimum viable product creation is its cost-effectiveness and budget-friendliness. Because only the core features are in the spotlight, non-essential functionality and excessive ideas are placed on the back burner. That's why the MVP cost is several times lower than the money you would need to develop a complete product. You sort of stretch the expenses by splitting them into parts.
The entire process, from MVP design to development, implies minimal input of resources. This helps teams refine and test their ideas on the market before making costly commitments to large-scale projects. You get to save lots of various resources since an MVP entails having a focus on developing the bare minimum of essential product features. This, therefore, trims the required development time and saves money (consider this a seat belt that'll hold you back from investing considerable resources in developing a complete product).
Hence, you mitigate the risks associated with pouring resources into something no one wants or needs. According to the latest statistics on the startup failure rate, running out of money is among the most widespread reasons for such projects shutting down.
Even if you make fatal MVP mistakes and the entire endeavour proves to be unsuccessful, this means that you dodged many financial and time-related risks, which could have otherwise had unpleasant consequences. After all, why incur unnecessary expenses on big-scale development? This way, you opt for the "less drama" highway.
2. Lets You Test Hypotheses and Validate Ideas
A minimum viable product is an amazing hypothesis validation method. It allows you to test ideas and assumptions without lots of upfront investment, which is among the indisputable MVP benefits. In most cases, those building a product can't be 100% positive that they are right about their theories, for instance, about:
- business concepts;
- market demand;
- things that make your solution stand out and bring value;
- the target customer groups, their needs, and pains;
- which design people will like;
- what kind of features they expect;
- which marketing strategy to use;
- how to sell the product and handle pricing;
- and so on.
Using various MVP testing methods, you may gather data on fundamental matters like user demand or whether they accept the product. Moreover, you may allocate flaws or potentially hazardous shortcomings and adjust the product to answer user needs better.
The bottom line is that an MVP gives you the fast pass for validating your product idea on the market. Be it the early project stages like the discovery phase or later ones regarding another product iteration cycle, the MVP method is the key to making data-driven decisions from the very start. You can make informed calls about which direction your product should move in and lower the risks of building a poor-quality product that doesn't live up to expectations.
3. Building a Functioning Solution
According to the classic MVP definition, a minimum viable product implies having a solution with a small set of features but one that actually works. It is usually an early version of the product that doesn't require an enormous budget or years of development but has to be of good quality, free of bugs, and with a clean design.
Surely, many things can be used as an MVP for validation purposes and feasibility testing, such as fake doors, Concierge MVPs, demos, or prototypes. However, the product has to work and solve a user problem to be considered a proper MVP. It's all about learning, reworking, and scaling what you have bit by bit based on the obtained data.
4. Quicker Time to Market and Competitive Edge
You never know if some other company will manage to roll out a similar product before you do. The industry is fast-paced, so hitting the market first may result in a competitive advantage.
Noting other benefits of MVP creation, the reduced time to launch the product and get it in the hands of users has positively influenced many companies that have chosen this path. There are plenty of MVP examples of renowned brands that reaped the benefits of getting an early product version out in the world instead of building a full-scale solution.
Significantly cutting down the time it takes to get the product out there enables teams to get feedback quicker, which aids in decision-making and leads to safer development-related calls. Plus, multiple MVP tools can help speed up product development, providing optimal alternatives to custom coding and other from-scratch processes.
5. Allows for Gradual Product Development
Agile MVP development is based on the lean methodology and has iteration at its core. This is the quintessence of the build-measure-learn development model used for building minimum viable products. Iterative development is what makes it possible to create the product step by step, continuously enhancing and refining it according to integral findings, data, and feedback.
The idea behind incremental updates and feature releases is helping the product evolve to meet target audience needs and get one step closer to its mature Maximum Viable Product version. With every iteration, the MVP emerges in a newer form, rising from the ashes of ideas like a phoenix ready to fly high above the competitors and become something that people will be willing to come back for.
6. Feedback Analysis and Data-Based Decisions
Launching an MVP also means that you have the opportunity to pull in early adopters. Many people are open to novelty and are willing to try out new solutions. If you manage to deliver a quality product and hook them with what you're building, such an audience may evolve into brand advocates, giving you after MVP feedback, spreading the word about your product, and growing the user base (which are all noteworthy MVP benefits).
Are there bottlenecks, issues, pitfalls, or pain points users may struggle with? Are the users engaged with your solution, and does it provide decent usability? Ultimately, analyzing feedback makes it easier to achieve product-led growth. With such user insights, you can determine:
- whether what you've built resonates with your target audience;
- how great the user experience is;
- customer preferences and dislikes;
- what to roll back to or fix;
- which tactics are working and which aren't;
- which current market, industry, business, and startup trends are observed;
- and how to proceed with product creation to meet market demand.
With that in mind, the product's early versions start circulating on the market sooner, and teams may thus make vital discoveries based on collected data, not guessing. For instance, they can learn if they were wrong about an assumption or notice the urgent need for a business pivot. All that can help in gaining a competitive edge and winning over customers.
7. A Spot-On Value Proposition and Product Quality
As follows from the above, when the teams direct their attention to addressing a specific user problem, the MVP takes the shape that people expect. The users' pain points are in focus, so even a simple yet high-quality product that manages to solve a key problem gets the awaited appreciation, resulting in MVP success.
Of course, to deliver a quality product, the team sculpting it should have the required knowledge and be equipped with the right tools. That's why many startups and larger businesses turn to MVP development companies with expert teams for assistance.
A minimum viable product's core that aligns with expectations can be enough to grow into a bigger, more mature, and encompassing version someday (for example, a minimum lovable product). It's flexible and can adapt to the changing market trends and the target audience's wants and needs.
8. Improved Team Effort Allocation
A smart approach to MVP launch definitely enhances resource allocation. By focusing on functionality that brings the most value, teams devote their time to things that matter most, setting aside less vital parts for later.
Such concentration on effective feature prioritization prevents putting valuable resources to waste. This implies that teams don't lose time on creating useless features, and the company utilizes resources (like money on payrolls) more optimally. Unquestionably, these are prominent MVP benefits.
9. Faster First Sales
Profitability and a stable income stream are major concerns for most products undergoing development. Generating early revenue makes it possible for teams to keep moving forward with their product development roadmap and plan. If the MVP is worthy, it can get expected traction. Early adopters may purchase the early version of the product or pour in money during the pre-sales campaigns.
If you begin getting money at the starting stages, this can be a good sign that you're on the right track toward finding product-market fit or that you've made the right monetization strategy choice. Not only can the obtained funds be used to fuel further development, but they may also serve as an extra validation source for the product.
10. More Chances to Get Outside Investment
The product or startup funding process is always a challenge, as dozens compete for financial support. How do you secure funding when your product is at its earliest phases? The answer is building confidence with a functioning MVP.
An investment pitch has more chances to succeed if it has a ready product to show (even if it's only at an early stage). Investors and VCs are likelier to consider those teams that may demonstrate a working solution that's already receiving traction.
If you're pitching an intangible concept, then the whole undertaking may seem too risky for them in terms of their return on investment. Transparency and data to back your pitch rule during an MVP pitch.
Concluding Thoughts on MVP Benefits
MVP development enforces teams with the transformative power of turning raw ideas into unparalleled opportunities. Like skilled alchemists, they constantly iterate the product, run tests, assess data and feedback, and effectively drive innovation to achieve the perfect blend that users value.
We've overviewed the benefits of MVP creation. By leveraging them, teams can skyrocket their chances of creating a truly worthwhile and market-ready product, the elixir of success most teams crave.
Upsilon has years of experience in launching MVPs, in fact, some of the products we've created with our clients resulted in 9-digit exits! So, feel free to contact us to discuss your needs or reach out to us for MVP development services for early-stage startups and growth-stage businesses. And if you need a tool to quickly estimate how much a project may cost you, feel free to apply our intuitive MVP calculator!
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