interactivated blog

magento & ecommerce

Minimum Viable Product - The Smart Strategy for Software Development Startups

If you have an idea for a new software product but are unsure whether to invest all your time and effort in it, fear not. There is a perfectly viable way to “start your business without actually starting it”. The concept of a minimum viable product is gaining in popularity, simply because it's a complete win-win strategy. With minimal funds, you can start earning, test your products, find fans, and even start making some money. All the while, your newly acquired customers help you to develop and perfect your product until you are ready to make a considerable time and money investment. With an MVP, you’ve got nothing to lose and everything to gain.

What Is Minimum Value Product?

Product developers who start off with an MVP, create a version of their product, featuring all the elements of the fully developed product, without investing all the time and money to build the finished product. To give you a “non-software” analogy, let’s say, you would like to open a bakery. Instead of finding premises, buying costly equipment, and hiring staff, you start by baking cakes at home and selling them at the local market. The costs involved are minimal, in fact, because you are selling your cakes, you are likely to make more than you’ve invested. What is more, you will gain valuable market research information from your customers and determine whether there is a market for your product. Customer feedback will allow you to perfect your recipe over time. Once you are happy with your MVP revenue, you can start thinking about getting actual business premises, equipment, and staff.

The process of creating a software MVP is much the same. Rather than investing tons of money in fully developing your product, you produce a “lean version” for people to try. You do so by using a variety of existing MVP tools which we are going to describe in detail later on.

If you have an idea for a new software product but are unsure whether to invest all your time and effort in it, fear not.
Benefits of the MVP Concept

The MVP strategy comes with a plethora of benefits, including:

●    Early Product Testing: By making an early version of your product available, you will on one hand find customers or what are often called “early adopters”. On the other hand, they will test your product and provide you with valuable feedback. This can all happen without you having to invest much cash or time.
●    Product Development: The MVP concept is focused around product development, i.e. as you make the product available and start getting feedback, you keep on developing it with the help of early adopters. You build a “lean version” of your product, measure the results of the initial launch, learn from customer feedback, and go on to create your final product.
●    Market Research: Once your MVP is available, you start gathering information about the appeal of your product in an effort to determine whether there is a market for your product. Because you are already interacting with customers, you soon get an idea of the viability of your product.
●    Quick Launch: Because you are making a lean product available, you can do so quickly and without investing too much time and money.
●    Cost and Time Efficiency: Fully developing a product requires a lot of financial and time resources, MVPs on the other hand don’t.

How to Create a Software MVP

There are a few considerations necessary when creating a software MVP. Obviously, you need to have an idea for a product, however, you are going to have to carry that idea through the following development stages:

1.    Unique Selling Point / Unique Value Proposition: To start with, you will need to determine whether you are offering something unique or a better version of an existing product. Unless you have something new or improved to offer, there is little point in continuing your venture.
2.    Identifying a Customer Base: Identify who your potential customers are and define their reasons for buying your product. Who are you producing the product for? Why would they want to buy it?
3.    Customer Needs: Identify the need your product is going to meet.
4.    Provide Minimum Viable Solution: Your MVP ought to provide a minimum viable solution to your customer’s problems.
5.    Delivery Channels: How are your customers going to get your product? How are you going to deliver it?
6.    Who Are Your Competitors: Examine the market you would like to get a foothold in and identify your competitors. Continue by asking yourself in what way your MVP is more innovative or better than your competitor’s product.
7.    Costings: Do up some figures, calculate your input costs and potential earnings and see if the figures add up.
8.    Revenue Stream: Establish ways of collecting cash from your customers.
9.    MVP Process Data Collection: Determine methods by which you are going to gather customer behavior and market research information. Measurables are vitally important and will ultimately form the basis of your full product development.

Creating and Developing a Product

When creating an MVP, set your priorities as illustrated in the project management triangle of time-cost-scope. The process don’t need to take all that much time, especially if you are using a tool like the Agile Software Development Product. The benefits of using Agile include:

●    Fast Development: Potentially, you can develop your product within two weeks.
●    Flexibility: Agile allows you to tweak your product over time until you reach perfection.
●    Feature Prioritization: With Agile, you can prioritize features for your lean MVP
●    Collaboration: When using Agile, you will take everyone’s needs into consideration, the business’s, the early adopters’, and the MVP developers’.
●    Minimum Effort: Your developmental efforts will be minimal when using Agile.

The buzzword around creating an MVP is “lean”, because it describes the fact that you are investing the least possible resources when it comes to time and cash. Some of the “lean MVP development strategies include:

●    Cloud Services Are Cost-Effective: By using cloud services you save yourself a pile of cash. Once you have established a good customer base, you can invest in your own platform, while continuing to use cloud services for excess traffic.
●    Lean Product: Start off with a product that has few, but strong features. Companies like Google, Dropbox, and Craigslist initially made a slimline version of their product available, Customers tend to prefer simple and easy-to-use products.
●    SaaS: Rather than creating your own data collection, monetizing, and customer support service, outsource it to third party services. This way, you can remain focused on the development of your product which is the most important part of your project.
●    Most Popular Platforms and Browsers: Start off by making your product available on the most popular browsers and websites rather than all of them.
●    Open Source CMS: Platforms like WordPress are cost-effective and come with a plethora of data analysis and measurement tools.

If you have an idea for a new software product but are unsure whether to invest all your time and effort in it, fear not.

Finding Customers

Once you have developed your lean MVP, you will be keen to make it available to as many people as possible. But how do you build a customer base? Where do you find early adopters? How will you convince them to go beyond just trying out your product and become your regular customers?

Your approach will vary depending on whether you are launching an entirely new product or whether you are making an improved version of an existing product available. For the former, you will need to educate and enlighten your potential customers. When doing so, you will have to highlight an existing, previously unmet need, and illustrate and promote the solution you are furnishing. For the latter, you may be able to access an existing customer base and simply highlight the unique selling point of your product.

When developing a customer base and strategy, there are four steps you need to progress through:

●    Publicizing Your Product: You can approach potential customers in a variety of ways. A lot of companies create “explainer videos” and upload them on YouTube, some send emails, while others use platforms like Facebook, Quora, or ActiveCampaign. Clickable prototypes are essential because people can get a preview of your product and get a good idea of what kind of product you are launching.
●    Turning Early Adopters into Long-Term Customers: Once a few people engage, start a conversation and determine their real needs. Tell them how to get your product, ask them to try it and request feedback. Questionnaires and calls-to-action are a good way of building lasting relationships with customers. At this point, you also need to think about branding and make sure your product makes an impact and stands out.
●    Maintain Your Customers, Get More, and Keep them Engaged: Build your online presence, profile, and visibility by creating engaging content. Regularly post on all social media platforms and make sure to start a blog. Use your posts to educate, create interest, and cause a stir. The more evocative, the better.
●    Make Them Pay: Don’t give your product away, charge your customers. That way, they will value it more and take you more seriously. You can also make additional features available in exchange for money. Remember, you are a professional and are making a product available that has value.

Top MVP Tools

There are a number of effective MVP launch and development tools that can help you to launch and promote your product, while gathering fans and customers for you.

1.    Explainer Videos: Companies such as Dropbox started off with a strong explainer video, illustrating how their product worked. Uploaded on YouTube or published on a high-traffic sight, explainer videos give potential early adopters a glimpse into the use of your product. Simple screencasts can suffice in garnering plenty of attention and attracting lots of customers.
2.    Strong Landing Page: A landing page is the page people get to after clicking on a link. Make yours strong, informative, and includes a chat feature to facilitate communication with early adopters. You can use AdWord or similar to drive traffic to your site.
3.    Crowdfunding: Launching a crowdfunding campaign on sites like Kickstarter, IndieGoGo, and Rockethub not only publicizes your product, but also potentially raises funds for you. Lots of companies have raised considerable amounts of money this way. Beyond that, you are also building a fanbase and following, and when you do, keep in touch with your fans and regularly communicate with them by email and via social media.

Measuring the Results

Measuring the results of your MVP campaign is essential when trying to decide whether to fully develop your MVP into a product and invest time and money at that point. Website data will go a long way toward telling you about the success or failure of your MVP. Basically, you want to find out how your customers felt about your product, what the market conditions are, and whether the costings add up.
While customer interaction can provide you with valuable information, measurable results as provided by software tools like One Metric That Matters will allow you to analyze your standing in the most solid and detailed fashion.

If you have an idea for a new software product but are unsure whether to invest all your time and effort in it, fear not.

As part of a business-stage-metric-correlation model, the following elements are factored in:

●    Engagement: Determined through customer surveys, quantitative scoring, and interviews
●    Stickiness: Measurement of conversion, engagement, downloads, traffic, etc.
●    Virality: Tracking likes and shares
●    Revenue: Calculating earnings
●    Scale: Analyzing scalability and the potential for further growth

By carefully examining all the results, you should be able to determine the viability of your project and identify strengths and weaknesses. The gathered information will form the basis of your ultimate business strategy and steer you through the startup of your business beyond the minimum viable product project.

Apart from the data, customer feedback is your most valuable tool and can guide you through the development of a long-term, financially profitable product and venture.

Final Thoughts

No doubt, undertaking a MVP project before deciding to go all out and start a business is an extremely worthwhile exercise. With minimal investment you have the opportunity to test the market, test your product, gain customers, engage with early adopters, raise investments, and make some money.
By the end, you will have a very good idea of whether your idea can one day translate into a successful enterprise.

;

By interactivated • on May 27, 2017

Contact Us
Get in touch with a specialist
THE NETHERLANDS (HQ)
Herestraat 106, 9711LM,
Groningen (Netherlands)
+31 (0)50 711 9940
VAT: NL 852998521B01
Chamber of Commerce: 58348646
UKRAINE
Kostomarivs'ka 13,
61002, Kharkiv
SPAIN
Calle Jabea 18, 29631,
Benalmádena Costa (Malaga)

* Required Fields