It is an inevitable part of building your startup that you start with an MVP. But how do you start building an MVP? How does it differ from your final product? What are your options in terms of choosing the kind of MVP you’d like to build or the kind of tech partner you’d like to partner with? Our knowledge base covers all aspects of MVP-building, breaking down the process from start to end and demystifying some misconceptions about the MVP.
What is an MVP?
In any startup product roadmap, a Minimum Viable Product is an essential part of the process. The philosophy behind the MVP is to release early, release often and to adapt according to user feedback.
In essence, an MVP aims to:
- gain invaluable information about the strengths and weaknesses of your product.
- generate feedback to shape the direction of future product development.
- Allow a business to quickly release its product out into the market
Stripping down a product to its essential features allows you to see how users interact with individual features of your product. An MVP allows you to develop flexible business models according to feedback from your first users.
An MVP is highly recommended as part of the build-measure-learn product cycle in the Lean Startup Methodology. It is important to note that what you have on hand is not an MVP, unless you can sell it (as the word “product” in “minimum viable product” indicates).
By cutting the time to market of a particular product, an MVP can also help businesses save money by generating profit early. Facebook, Twitter, Amazon and Dropbox all started with an MVP. For more on MVP definition, benefits and case studies, see:
What Makes a Good MVP?
Despite the word, “minimum,” it is important to remember that you are not out to make an inferior version of your product in an MVP. The small number of features included as part of an MVP should nonetheless be fully functioning features. The goal is to garner as much feedback about your business model as possible, with the least amount of effort/cost.
A Good Minimum Viable Product
Lean and Simple
A version of your product with minimally sufficient features
Conveys a core value that seeks to solve an identified problem
Not a Prototype
A real product with a functional backend.
A dynamic form of market research that should be easily adaptable to respond to market demand
Ideally, a good MVP is also:
- Competitive – price to features is appealing in the market
- Disruptive – showcases unique and attractive features
- Profitable – in-demand, revenue-generating solution to a specific problem
Think of a good MVP as a pilot that does not sacrifice the overall vision of your product. For instance, one of the projects in the Creatella portfolio is a platform that helps to streamline legal work. While the first MVP might leave out automated features such as scheduled appointments, the key feature is already in place–even in MVP1, users are able to create, edit and reuse letter templates, serving up the core value proposition of the platform.
The Lifecycle of an MVP
The preliminary step in building an MVP is to perform an analysis of your existing business vision: review your pitch deck, your preliminary list of features and business plan. Using these, the next steps are:
There are a number of methodologies entrepreneurs can use to develop a business strategy:
- Blue Ocean Strategy – creates “new” value by defining a unique and untapped market space; differentiate from and stay ahead of competition
- Kano Model – establish basic and differentiating product features
- Build-Measure-Learn Feedback Loop – product-market fit; focus on the solution amenable to the market and use direct feedback to improve
- The Business Canvas Model – align value proposition, finances (cost and revenue) and infrastructure with customers
Who will build your product–an in-house team led by CTO, a Tech Agency or a Venture Builder?
Chief Technical Officer
As a startup founder, you might assume that finding a Chief Technical Officer is an indispensable part of the process. Bringing on a full-time CTO can be both advantageous and disadvantageous.
- Full in-house control of the MVP’s tech development
- An expert who can translate the business needs into a product roadmap, as well as make decisions on tech
- Excellent talent comes with a price tag (especially if this price tag is composed of equity)
- Risky to fully rely on; if you’re non-technical, how can you assess his skill and ability?
There is also the option of outsourcing to an external team for the tech development of your product.
- Control cost
- Be efficient in operations
- Quickly pivot for changes and upgrades
- Access a full professional team
- High cost and possible overcharging
- Lack of understanding of startup needs
- Difficult to control management and to ensure quality assurance and timely delivery
- Might not be able to expect a high level of involvement and care for your product since a tech agency works on many projects at the same time and has sales targets to reach
- Lack of control over the entire workflow
A sweet-spot between a CTO and Tech Agency is the Venture Builder or Startup Studio model. A Venture Builder is a company that creates new businesses or startups systematically from the ground-up, helping them succeed and even scale-up. Its core functions include identifying and developing business ideas, assisting in finding funding, leading and/or consulting aspects of the business and lending specialized services.
- VBs understand the need to get to market fast and iterate swifty – they work fast, are flexible and ready to pivot with you
- Quality of execution: in general, a VB’s hands-on involvement ensures higher quality than a tech agency
- Scalability: VBs usually recommend methods to ensure the scalability of the startups they partner with
- Many VBs work on a cash-and-equity basis. If you are reluctant to part with equity, this might not be the ideal model for you.
- May take partial ownership of startups in their portfolio, thus lending the stamp of the VB’s brand, vision & team culture
- Selective in the projects they choose to take on as the venture’s success or failure will reflect on the VB’s portfolio.
For a very basic MVP, the quickest and possibly best solution is to hire a Freelancer. This is the case when a business needs an MVP as soon as possible, usually to present to investors.
The table below ranks each tech partner in terms of Services, Control, Quality and Time-To-Market, with ‘1’ as the best. Partners may have the same rank as conditions can vary:
Bringing a new product to market is taking a leap. Before you embark, examine your assumptions, step back and be objective. If you can be lean, be lean. Exhaust all your options before taking the leap, you’ll likely start one step closer to product-market fit.
There are many ways to test your market assumptions just short of building an actual product itself: a Prototype, letters of intent as well as different types of MVP–Pre-order MVP, Wizard of Oz MVP, Piecemeal MVP, etc–all help you test your value propositions.
- Prototype – a representation of the product that does not include actual or full building–this can range from clickable mockup to a landing page that captures the key benefits of your product).
- Pre-order MVP – crowdfunding; a means of testing the idea’s directly by validating the product’s attractiveness to the market. The product is only built if the funds/ number of pre-orders needed is met.
- Wizard of Oz MVP – involves communicating that the product is fully-functional to the market whilst still under development. One well-known company that used this model is Zappos.
- Piecemeal MVP – makes use of existing resources put together to create the product. Its components literally include current products that are already accessible to the market. Notable examples using this model are Groupon and travel agencies, and e-commerce websites that sell products from other marketplaces.
How much does it cost to build an MVP and how long does it take?
If your MVP is a smaller-than-average sized app (less than 25 screens), it could take anything between 2-4 months to build a well thought out MVP. Within this timeframe, design and wireframing would take about 1 month, and while the bulk of time is spent on tech development itself, post-development services would include internally and externally testing your MVP for bugs before it launches.
If your MVP is a smaller-than-average sized app (that is to say, less than 25 screens), it could take anything between 700-1200 hours of effort to build.
Depending on your choice of partner, and your geographical location, needs and expectations, different agencies/VBs would charge a different hourly rate of effort for the scope of your work. Below are industry estimates of the cost.
CTO (in-house and team)
$40,000-100,000+ salary per person + equity
$20,000 to $100,000+ per project
Ranges from $3,000 to $50,000+ Depending on terms (may include equity)
$5,000-$20,000 per project depending on complexity
Once tech building begins, you are on your way to seeing the first live version of your product! You should also make crucial decisions about the types of analytics you would like to track with this first MVP.
User behavior and interaction with your product should give you essential feedback as to how to structure the next phrase of your product development. Key things to note in this stage are:
What are the Advantages and Disadvantages of Building an MVP?
”"If you’re not embarrassed by the first version of your product, you’ve launched too late."Reid Hoffman Founder, LinkedIn
It cannot be stressed enough that an MVP really forces you to go through the essential component of the Lean Startup Methodology: the Build-Measure-Learn product cycle.
If you run a restaurant for instance, you do not have to serve up a full 7-course tasting menu before a food critic can judge your quality. Ideally, any item on the menu should be able to convey the quality of your restaurant and be representative of the cuisine it serves. By the same token, you do not have to have built your super-advanced-AI-driven-facial-recognition feature in order to get valid feedback about the product you offer.
- Directly addresses the market need with a focused solution
- Captures market demand through a faster and more efficient release of the product
- Garners feedback directly from customers; invaluable in market testing
- Saves money by generating upfront profit
- A bare-bone product; could be perceived as unsatisfactory
- More upfront work
- Requires several revisions based on feedback
- Needs a starting capital to initiate production
Myths About An MVP
“An MVP is a way to save money by building only the features you can afford.”
Cuts down the need to build unnecessary features. Determine which features are important and which are not, depending on your target market and problem you are solving.
“Having more features is better”
Stay focused on the solution that your product is offering. All other features must be complementary and should be based on the demand of the market.
“Building an MVP is a shortcut to access the market”
It is important to note that using the MVP method is an iterative process that caters to the essential features needed to solve the problem defined.