The last article in our Startup Series, Validating the Market & Product, covered various methods which are great in helping you to confirm that the assumptions you’ve made in your new product and business model are indeed correct. In case you missed that article, you can read it here.
At this point, we’ve validated with a considerable degree of confidence that a market exists for our idea and the market is willing to commit to the use of our product, fantastic! Now is time to get an early version of the product into the customer’s hands.
The Minimum Viable Product (MVP)
You may be thinking that since we’ve validated our assumptions we are good to go full steam ahead with the full product implementation, but unfortunately this is not a good idea. From personal experience, and more importantly, from the hard statistics, even with a number of validation tests, it’s still difficult to gauge how the market will respond when the product until it is actually in their hands and being used. The trick is to start with something small, analyse the market response, and then either enhance what works, or throw out what doesn’t, this is the concept of the Minimum Viable Product (MVP).
As the name suggests, an MVP is a version of the product with the minimum set of features that make the product viable for your market. You will typically start by writing down a list of all the features you expect will make up your product. This features list will contain the big-ticket items like directory lookups, member registration, payment integration, push notifications etc. From that list, you will then drill down and identify the absolutely necessary items (or item) that will make your solution viable. Any features that do not directly solve the problem stated in the Lean Canvas can be introduced later. For now, we simply want to see with our own eye’s that the validation we have performed in the earlier steps has been accurate.
The concept of the MVP is tightly entwined with another concept, Validated Learning. This process was made populate by the book The Lean Startup, by Eric Ries. The idea is that you test an individual assumption in isolation, and then learn if the assumption is valid by measuring the response to the test. By starting with the smallest version of our idea and putting it into practice, we can gauge its effectiveness individually, and then elaborate on the concept only when it’s deemed effective.
Types of MVP’s
MVP’s come in many shapes and sizes, but as long as they’re giving us the ability to test and measure aspects of our product then they’re doing their job. Sometimes we can get a functional version of a product without the need to write any code, but its most common that you will need to leverage the skills of at least a designer and/or developer.
Wizard of Oz
Also known as “Flinstoning”, the Wizard of Oz MVP is when you create a front for your product that indicates you have a fully-fledged product, but in actual fact you are manually carrying out the functions of the product behind the scenes.
An example of this would be setting up a simple website which sells high end fashion clothing. Users reach the website, view your catalogue and proceed to order. However, only when the order goes through do you actually purchase the product from a vendor. This ultimately mitigates the risks associated with the buying up and storing large amounts of stock, particularly in the case that product is in a niche market which is yet to be fully tested.
The Concierge MVP differs from the Wizard of Oz MVP in that this time it’s a service that is the principle function of the solution, and not a product. Transactions for this MVP may also be initiated from a web or app interface, but the underlying service will, initially at least, be manually performed by the person behind the venture.
An example of this type of solution might be a preference based book rental service. Customers may perhaps initially subscribe for the service via an email address found on a simple website. The founder could then visit the customer on a monthly basis, take note of their genre preferences and come back the following month with a carefully curated set of books for the customer to read. This would be an ongoing process, with the customer each month receiving new books to read. Payment could also be manual at this stage. The primary objective is to determine the customer uptake and retention rate.
The Piecemeal MVP is a mix of the Wizard of OZ and Concierge methods, with the addition that you focus on providing your solution by leveraging tools and services that are already available. Your solution is provided to the user in the same way you imagined it. However, under the hood, you have automated the processes involved as much as possible. This approach is particularly useful for solutions that need a degree of scalability. For example, you might implement this approach when your solution is a purely online service which provides daily book list emails to your customer base. Sending out emails manually to over a hundred customers would soon become debilitating, so leveraging an email service such as MailChimp, AWeber or GetResponse to automate this process will be a far more scalable option.
MVP’s come in many flavours. These are just a handful of options that you have at your disposal. The benefit of the MVP approach is that you will be able to fine tune your product offering in a more efficient and practical way. Next up is MVP development, where we take a look at what’s involved in the technical implementation of a bespoke product.