5 Important Q&A About Minimum Viable Product (MVP)

Many innovation methods and terms from Silicon Valley are new territories. So also the Minimum Viable Product. Here are the five most important questions and their answers. If you look at the Swiss army knives, you will find the so-called “collector’s Swiss army knife” with too many tools and functions. Although they offer the owner the right tool in every conceivable situation, it is hardly really suitable for everyday use. They are not suitable for reality. On the other hand, there are useful Swiss knives, which are reduced to three or four functions. This kind of knives are readily available for around 15 dollars and commonly sold. For similar situation, the concept of Minimum Viable Product (MVP) took birth in the software industry.

 

Less is often more

 

The first type of knives described above stand out for overloading features, it is a disease that many companies suffer from, especially in the engineering industry. Usually for the development put together a project team for a new product that withdraws for months or even years to develop a supposedly perfect product in secret and in complex processes.

To satisfy all the needs of all potential customers, many make the enterprise the mistake of offering too much at once. The result: a far too expensive product, which has all the bells and whistles, but is not needed by the customers. Instead, what often falls by the wayside are the actual needs of the actual target group. After all, who needs a saw, a nail file and a corkscrew at the same time? Which functions are even marginally superfluous? This is exactly where the MVP method comes in, for which the second knife stands.

 

What does MVP mean?

 

MVP stands for Minimum Viable Product, which means “minimally functional product”. Originally, the term comes from Silicon Valley, where numerous young tech startups are already working successfully with the concept. They gain a competitive advantage over established companies because they can implement innovations faster and react more flexibly to new requirements.

Especially in agile product development, the MVP method has established itself in recent years. Nevertheless, the term is still interpreted very differently. The most common definition goes back to Eric Ries, who in 2011 coined a completely new philosophy of business start-ups with his book “Lean Startup”. He describes the MVP as “a version of a new product that allows a team to collect the maximum amount of validated information about customers with minimal effort.”

 

What does a minimum viable product have to do with agility?

 

Classically, many companies use the waterfall method in product development – a linear approach that is usually deeply embedded in the corporate culture. the development, however, an MVP is based on the principle of agile working, which works the other way around: instead of creating detailed specifications over weeks or months, the team starts with a vague goal in mind and then sprints from one “pit stop” to the next to get customer feedback as quickly as possible. This is then used to continuously develop the product and adapt it to the actual needs of the customers.

 

How does the MVP process work in concrete terms?

 

Developing, measuring, learning, repeating – these steps describe the cycle that makes up MVPs. At the beginning of the process, there is always a hypothesis that the team establishes together. This hypothesis must be confirmed or refuted. In our example, this would be something like this: If our pocket knife is equipped with a corkscrew, sales can be increased by ten per cent within the first four weeks. Then the MVP process begins:

1. The team develops a Minimum Viable Product.
2. The MVP is tested with real users.
3. The tests show whether the MVP is used and accepted by users as expected.

Based on user feedback, adjustments are made to the product and further sprints are carried out to improve the minimum viable product. Possible new features are then added step by step.

 

What do you have to consider with a minimum viable product?

 

Those who have had few points of contact with agile development methods may initially find the MVP process to be unintuitive. This is especially true for highly regulated industries, where a lot of time and care usually goes into the implementation of new ideas. The following basic principles help to establish the MVP concept:

1. Speed instead of perfection: It’s less about developing perfect products than implementing ideas quickly.
2. Focus instead of all-round impact: Especially in the test phase, it is essential to focus on the right feature (e.g. a certain feature) and to measure its success.
3. Agility instead of a waterfall: Of course, it is always advisable to have a product idea in mind. In concrete terms, however, only the next step is planned.
4. Benefits instead of features: It is not a question of mapping as many properties as possible, but of offering the user concrete added value.
5. Savings & Turnover: The success of the product is measured not only by sales but also by cost savings.

 

What are the benefits of a Minimum Viable Product?

 

By ensuring a fast, lean process, companies minimize their financial risk. At the same time, they can try out more ideas, identify the best ones early on and discard those that will not deliver positive results. In this way, companies can already recognize at a very early stage of product development whether they are going in the right direction and otherwise correct their course in good time. Minimum Viable Products are a great way to drive innovation in the company.

It is important to anchor the understanding of this entrepreneurial and implementation-oriented approach so firmly in the corporate culture that each employee recognizes the advantages and knows how to use them correctly for themselves. Developing an MVP is not about creating a perfect, mature product. On the contrary, often it still “jerks and wobbles” – but it works.

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