Definition of MVP for your startup
In most cases, resources are scarce for startups; without the proper amount of resources, validating the business model is a complex matter.
Because of the scarcity of resources, most startups develop slowly, and it is not easy to know from the very beginning whether the business approach will be sustainable in a competitive market.
The MVP is aimed at solving this problem. MVP stands for “Minimum Viable Product”, and it refers to the minimum amount of a product or service that makes it possible for us to obtain as much information as possible on our clients and on the market as a whole.
This should be achieved while investing as few resources as possible and putting in just a little effort (the less effort our business has to do, the better).
Focus on minimum features
Focusing exclusively in the minimum features of the product or service, the MVP assesses whether it will be sustainable in the market.
As a consequence, from the very beginning we obtain two assets for our startup or SME:
- We avoid wasting resources in a product or service that would actually be rejected by the market.
- We obtain as much useful information as possible (from our potential clients and our market) per euro invested.
The MVP is a sales strategy that enables us to approach our clients as effortlessly as possible, and it makes it possible for us to find out whether our product will be sustainable.
The MVP is also an important factor for your business when it comes to searching for investors.
Most of them will expect you to have an MVP available so that you may show the appropriate measures for your startup or SME.
Steps to follow in order to outline your MVP
Focus on the basics
The MVP and the final product or service offered by your startup need not be too similar. This is one of the most common mistakes when doing an MVP. The drive to do an MVP that contains as much information as possible may lead us to developing it too much and to investing too many resources on it. Such a mistake reduces the margin between the MVP and the final product or service.
Avoid developing any process that could be outsourced
Test the final product or service
It is not uncommon for many entrepreneurs to invest money and resources right from the start in the creation of a simple web page that will need to be remodelled as soon as the business grows. In order to avoid wasting away resources, a good solution may involve the creation of a landing page, which will enable you to find out what your potential clients think of your product or service.
Add interactive content
You may be familiar with the saying: “A picture speaks a thousand words”. This saying is most appropriate for the creation of your MVP. Explaining in detail what your startup has to offer provides much better results when using images or even an introductory video that helps users easily understand what you are trying to sell.
Build your Lean Canvas
Lean Canvas is a tool to help startups develop their business model. This is a similar sheet to that of the business model canvas, but uses a different approach:
Firstly, you should fill out the left square with the problem or problems you need to solve with your startup; that is, the needs of your clients you want to cater for.
Secondly, just beside the square that contains the problems to be solved, you should fill in another square containing the solutions you may offer as a business. That is to say, what your product or service is and what its strengths are in order to solve this problem.
Right below the square containing the solutions, introduce the key metrics. These will be the metrics you will need to use to measure the business model of your startup.
Right in between, in the vertical rectangle, you will need to specify what makes your product or service special as compared to that of your competitors; that is to say, your unique value proposal. You should explain it in a brief and to-the-point manner.
On the right, in a smaller square, you are required to specify what your differential advantage is. That is to say, what makes your clients choose you instead of your competitors, which is not exactly the same as your unique value proposal. Don’t worry if you don’t know what to write in this square, you may leave it untouched at the beginning.
Below the square that contains your differential advantage you should specify what your diffusion channels will be. That is to say, how you will get your product or service through to your clients. It is important to take on this step for the customer experience as a whole, not only during the sales process.
On the right, in a different vertical rectangle, you should write down what your client niches are. This is an important factor to take into account, as targeting a mass market directly without previously choosing a niche to focus on is not usually a good idea.
You need to add two horizontal squares below all the aforementioned. The first square will focus on cost structure; that is, you will need to consider all the elements that bring about expenses for your startup or SME.
Last but not least, the second horizontal square will focus on the revenue stream of your business. Here you will need to specify where the money you expect to generate with your company will come from.