How can companies start MVPs successfully
The Minimum Viable Product: This is how you create your MVP as a start-up
Start-ups fail because of incorrect market assessments
One of the most common causes of start-up failure is insufficient market interest in the product to be bought. Unfortunately, this problem occurs regularly with start-ups with innovative business ideas, as there are no or at least hardly any empirical values about the specific needs of the intended target group for the new product that has not yet been tested on the market.
The consequences are often drastic: start-ups often develop and fine-tune their product over a very long period of time - until it turns out at the product launch that there is no need for the innovation on the market. The so-called product market fit is missing.
Achieve product market fit as a lean startup with the minimum viable product
With the "Lean Startup Method" developed by the American entrepreneur and author Steve Blank, a solution was found for this problem that has meanwhile established itself in the global start-up scene as a suitable way to develop an innovative business concept. The idea behind The lean startup method is quite simple: Instead of going to the market after a long product development cycle, one already enters the market very early with a so-called Minimum Viable Product - MVP for short.
The MVP is the simplest version of one's own innovation ("minimum"), but it still offers added value for potential customers - that is, it is "viable". As a start-up, you are at the minimum Viable Product is faced with the challenge of finding the optimal balance between the simplest product variant and the necessary core benefit. As simple as the MVP may be at the beginning - it has to address a problem that customers are relatively likely to be willing to solve. to pay an amount X.
With the Minimum Viable Product, initial feedback can then be obtained from the targeted target group through an early market entry and the product can thus be continuously improved in several cycles.
The advantages of the MVP: Fast, cheap and with low risk
In contrast to the lengthy classic product development process, the Minimum Viable Product offers three decisive advantages:
- Product development is quick and easy. Start-ups in particular usually have to be quick on the market, because the first mover has a clear advantage, especially in the digital world.
- Developing an MVP is cheap. By eliminating expensive product corrections, the budget can often be set lower with the lean startup method than with classic product development.
- The use of the minimum viable product means a lower market risk. Regular market tests can largely avoid failure due to a lack of market interest.
You can certainly view the use of the MVP with a certain degree of skepticism and ask yourself the following questions:
- How do my customers react if a product is still defective or offers too little added value?
- Isn't there also a risk that the competition will find out about my entry into the market and copy my product?
These questions are justified, but shouldn't unsettle a start-up too much. If you are really afraid that negative customer feedback could damage your brand, then simply test your Minimum Viable Product under a different brand name.
You shouldn't worry too much about the competition either: On the one hand, there is little chance of being discovered by the competition during your test phase. On the other hand, your competitor usually cannot assess at all whether your current product variant is successful at all. If he then actually replicates it - in a lengthy product development process - you will have long since tested your final product on the market and your colleague may fail to copy your first product variant due to a lack of product market fit.
Make use of a start-up coach who will support you in developing your MVP.Continue reading
The minimum viable product in practice: test your MVP directly on the market
Enough about the theory: Now we want to consider the different forms in which a minimum viable product can be implemented and also tested directly on the customer without having to invest too much effort. Depending on whether you want to sell a digital product, a physical product or an innovative service, only some of the techniques presented below are suitable:
Option 1: Landing page creation and online marketing
In order to test the interest in your Minimum Viable Product, you have to present it to your potential customers in the first step. For many product innovations, it is advisable to create a simple landing page on which the product can be described using multimedia. In the second step, it is now your task to test the sales potential. To do this, set up a simple order function on your landing page. Alternatively, you can offer your customers just an e-mail address so that they can request further information about the product, for example.
In order to get the first results as quickly and easily as possible, the following tips will help you when creating and marketing your Minimum Viable Product:
- Do not invest your money in developing your own website, instead use an inexpensive website builder, such as from 1 & 1 or Jimdo.
- You may even completely forego developing a minimum viable product and only include retouched images in your product description in the first test run. If sales are actually made, you can still cancel them afterwards due to delivery delays or for other similar reasons. This saves you a lot of development time.
- Carry out so-called split tests by varying the product features in your product description. In this way you can see which features actually offer customers added value.
- Get visitors to your landing page by investing a few hundred dollars in marketing with Google Ads. There you can precisely address the target group that you would like to win as a customer. Once you have won a few customers, you can calculate the approximate conversion rate.
Option 2: Selling on eBay and Amazon
As an alternative to your own landing page, you can offer your actually existing minimum viable product - for example in the form of a functional prototype - for sale on one of the world's two largest internet marketplaces, Amazon or eBay. Your big advantage: You neither have to create your own online shop, nor do you have to do marketing. If you are satisfied with your sales and receive positive customer feedback, you can now venture into mass production, for example.
Find out how you can easily open your own eBay shop to market your MVP.Continue reading
Option 3: crowdfunding
Large crowdfunding platforms such as Kickstarter or Indiegogo are particularly suitable for pre-financing innovative, trendy hardware gadgets by the crowd. But also within the framework of the lean startup method, founders can present their minimum viable product or just the concept they have thought up on such a platform. If the feedback from the readers is positive and the first supporters can be found quickly, this indicates a market interest.
Option 4: trade fair visits or telephone acquisition for B2B products
Have you developed a concept for a product that you would like to sell to companies? Then you should seek direct contact with potential customers. Present your Minimum Viable Product at a small stand at a trade fair relevant to your product and get feedback from those interested. Alternatively, you can also contact potential customers via telephone acquisition and arrange appointments on site.
Even if your Minimum Viable Product consists exclusively of an idea, you can use a presentation and retouched graphics at the customer's site to get a feel for whether you are on the right track with product development.
Dropbox: The perfect example of a working MVP
When it launched in 2007, the American cloud provider Dropbox proved that product development can succeed using the lean startup method: Instead of developing the complex software completely, the start-up put a landing page with a video online to raise awareness to test on the market. After the first video version and around 5,000 registered interested parties, Dropbox updated its video on the landing page, so that within one day 70,000 other interested parties deposited their email addresses. It was then clear: the cloud solution had met with great interest. This makes Dropbox an ideal example of how to use a minimum viable product.
This is how it continues after the MVP: The Lean Startup Method
Your MVP has been completed and the initial market feedback has been positive? Then you should optimize your Minimum Viable Product and obtain further feedback from potential customers. You can find out how to do this on our page on the Lean Startup Method.
Looking for an Investor? Our tips help!Continue reading
As editor-in-chief, René Klein has been responsible for the content of the portal and all publications by Für-Gründer.de for over 10 years. He is a regular interlocutor in other media and writes numerous external specialist articles on start-up topics. Before his time as editor-in-chief and co-founder of Für-Gründer.de, he advised listed companies in the field of financial market communication.
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