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How Minimum Viable Products (MVPs) Can Save Your Business

Entrepreneurs often run into competing startup notions:

  • You only get one chance to make a first impression.
  • Fail fast.
  • Measure twice, cut once.
  • Move fast and break things.
  • If you’re not embarrassed by the first version of your product, you’ve launched too late.

So, which is it?

Should you be aiming for a perfect product on launch day? Or should you “just ship it” and get the ball rolling?

At Foundr, we’re big proponents of the minimum viable product (MVP) development method. An MVP is the most simple (and often ugly) version of your product that a customer can use—and though it’s flawed and unfinished, it can save your business before it’s too late.

We’ll walk you through what an MVP is, why you should use it, how to develop MVPs (the right way), and examples of brands you know and love that started as barebone MVPs.

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What Is an MVP? Definition and Meaning

MVP stands for minimum viable product, and it essentially means the most basic version of a product that customers can use. Why would a business want to ship an unfinished product?

Perfecting a product takes time, money, and energy. You might spend thousands of dollars fine-tuning every pixel on your app or specification on your product only to find that customers don’t like it, don’t need it, and aren’t willing to spend money on it.

This happens more often than you’d think.

“No market need” is one of the biggest reasons for startup failure—second only to “running out of cash.”

An MVP helps you learn about your customer behavior and gain valuable insights before investing more resources into completing your product.

Why You Should Take an MVP Approach

OK, so now you understand a second way of thinking about product development. However, you might still be on the fence about whether you want to move fast and break things or measure twice and cut once.

Let’s look at a few advantages to the MVP approach:

  • Find a Product-Market Fit: Your product might need a little bit of tweaking to connect with the right audience. You might launch a calorie-free electrolyte beverage for Gen-Z athletes only to find that it’s what new mothers want—not youngsters in sports. It’d be helpful to know that insight before you invest in your product’s design, copy, and marketing campaigns.
  • Abandon the Product Early if Necessary: You might not want to hear this, but it’s the truth: your customers might not want your product. But wouldn’t it be better to learn that now than years down the road? 95% of new products fail. If you quit early, pivot, and join the 5% with a different product, you won’t be part of that statistic.
  • Save Time and Money: Creating a brand-new product from scratch is expensive—and it takes a lot of time. Instead of investing your entire budget into a product that might fail, start with an MVP. MVPs are cheaper to produce and can help demonstrate the core features of your product without the costly investment of a full-blown product.

Who Should Use MVPs?

Any business can benefit from MVP product development. To get your mind spinning around the possibilities, here are a few examples:

  • Graphic Design: Imagine spending 20 hours designing an image, landing page, or logo only to find the client or your manager hates it. What if, instead, you sketched out your idea first, gathered initial feedback from the stakeholder, and used that information to inform the rest of your design?
  • Apps: It’s not easy to develop complex applications. There’s a lot of front-end and back-end programming and design work necessary to create a polished piece of software. Have customers or users test the product early on to see how they use the service and think about it. What do they like? What do they dislike? What is it missing?
  • Video Games: Back in the day, you bought video games on CDs, and that was the final product. Today, you purchase, download, or even stream video games straight on your computer or console. Instead of taking additional months or years to perfect video games, companies are releasing lighter versions to the public early on and then adding improvements and content to the game over time.

How to Go About MVP Product Development (the Right Way)

Now, an MVP development model isn’t an excuse to release poor, glitchy products to your customers. Let’s break down each part of MVPs to gain a better understanding of what an MVP is and isn’t:

Minimum

Minimum refers to basics or fundamentals. Your product should have the core features. If you were releasing a new pair of shoes, it’d need the outer layer, shoelaces, and an outsole—at a minimum. Later, you could add nifty designs, heel tags, cushy tongues, and the like.

Minimum is a good reminder not to go overboard with your first version. Ask yourself: What does the product need to have? What do I want it to have?

When developing your MVP product, focus on the needs first and take care of the wants in future versions.

Some businesses accidentally start building a minimum marketable product (MMP)—this is the most basic product a company can sell that still makes money. MMPs concentrate on earnings, while MVPs focus on learnings.

Viable

When you’re thinking about “minimum” and “viable,” prioritize viable. Cambridge Dictionary defines viable as able to work as intended or able to succeed.

Your product needs to work to gain feedback from customers. If it fails to meet customer expectations, you won’t gain the insights you need to improve your product.

For example, if you release an MVP video game that’s too difficult, your customers might not make it past the first level—that doesn’t leave you with very much feedback to make revisions.

Product

Your product still needs to be something customers will buy and use. It needs to be a standalone product that can exist with no future versions.

While it’d be nice to have future versions (and that’s what you want to plan on), your MVP should be able to exist and get the job done without any other iterations.

If you were designing a mobile app, your product could have minor glitches and bugs—but you don’t want to release a version that crashes and irritates your customers.

3 Ways to Launch Better MVPs

1. Shift to an MLP Mindset

MLP stands for minimum loveable product. Ideally, you don’t just want your product to work, but you want your customers to love it.

Take Twitter, for example. When Jack Dorsey first released Twttr (the original name), it was a barebones product without hashtags, reposts, replies, or direct messages. However, employees at Odeo loved the product and spent hundreds of dollars sending messages—that was validation enough for Dorsey and the team to build out Twitter further.

When developing your MVP, consider what’ll make customers love the product. These are the components your product needs to have at launch day that goes beyond just being viable.

2. Go Live with a Soft Launch

Don’t start banging drums and shooting out press releases when you launch your MVP—introduce it quietly. You don’t want boatloads of attention just yet. Save that for when you release the more complete version later.

Instead, launch to a small beta group. Handpick your initial buyers and work closely with them to gather feedback and insights. You might send them surveys, host focus groups, or interview 1-on-1 to learn about their experience with your MVP.

3. Test Ideas First

Before even building an MVP, validate your ideas. We like to do this with a smoke test.

Smoke test your product with a landing page. This page should highlight the benefits and features of your product. You might even include pricing.

Next, drive traffic to the page. If you have a digital following, do this with your email list and social media followers. If not, spend a limited budget on pay-per-click (PPC) ads to get potential customers to the page.

Now, watch what visitors do. Do they click the “Buy Now” button or leave the page? Do they spend 5 minutes scrolling through the page, or do they spend 10 seconds before they bounce?

We like the smoke test because it takes product validation to the next level. When you first brainstorm and present ideas to friends and family, you might hear a lot of “Oh, that’s super cool!” and “Great idea!” However, if you ask them to buy the product, they might not put their money where their mouth is.

You don’t want customers that like your ideas—you want customers willing to open their wallets and pay what it takes to get their hands on your product.

Examples of Successful MVPs That Evolved

Some of the world’s most successful businesses started as MVPs. These companies didn’t spend years perfecting their products before releasing them to the market. No, they launched with 1/10 of the functionality they have today.

Here are a handful of successful MVPs that evolved into household names:

  1. Facebook: Facebook launched as “Thefacebook,” a small social network for college students to stay connected. You could search for friends (and friends’ friends) and chat with them, but that was about it. Now, Facebook has Groups, Marketplace, Watch, Ads, and live streaming.
  2. Dropbox: Dropbox had thousands of customers ready to pay before even having a product. Drew Houston, the cofounder of Dropbox, released a video explaining the concept behind Dropbox. In a single night, Houston reached 75,000 early adopters. When the team launched the real-deal product, they generated 1 million active users in under 10 months.
  3. Amazon: Amazon humbly launched as an online bookstore. The website was pretty simple, and the company didn’t have any of the winning features it has today: cheap prices, fast shipping, and a vast product section. However, selling books online worked out pretty well—enough for Jeff Bezos to expand the business and eventually build the world’s largest retailer (outside of China).

Examples of Businesses That Epicly Failed Because They Didn’t Use MVPs

You’ve seen the inspirational examples of MVPs that went well. Let’s look at the other side of the coin: companies that failed epically because they didn’t use MVPs.

  1. Snapchat Spectacles: Only 0.08% of Snapchat’s users bought its camera sunglasses. Of those who bought it, less than 50% kept using Spectacles after the first month. Customers didn’t really need a camera on their face—not one that only worked with the Snapchat app, at least. Snap fell for the “great idea” feedback rather than actually testing to see if their market wanted this product.
  2. New Coke: Nobody had any issues with the original Coke formula, but Coca-Cola wanted to compete with Pepsi’s flavor—so they released New Coke. Coke lovers despaired, enough so that Coke had to ditch the idea and return to the old recipe. Coke even had to apologize to its die-hard fans.
  3. Google+: Google built Google+ to retain its user base, which was going to Facebook and Twitter for their social networking needs. However, Google+ didn’t offer anything new, and it just looked like a bland version of Facebook. Google users didn’t ask for it, and they didn’t adopt it, either. Google+ is now where it should be: gone.

Build Yourself Out of a Job

Many entrepreneurs get in the way of their businesses. It’s not intentional—they just tend to slow down progress and prevent rapid scale.

If you enjoy micro-managing and working 80+ hour weeks, keep doing what you’re doing. However, if you want more time, control, and freedom—while growing your business—we have a free course you’ll love.

Sign up for our free video masterclass to learn how to turn your owner-reliant business into one that runs better without you. You’ll discover how to build time-saving systems and processes that allow your business to run on autopilot.

Sound too good to be true? See for yourself.

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