A product must offer unique benefits to find its position among competing products. However, a full-blown product costs substantial resources and requires a long time. Besides, due to technology life cycle dependence, it’s not feasible to develop a matured product in the beginning. Hence, Minimum Viable Product (MVP) is a product development risk reduction strategy for quickly validating product concepts by building enough unique features to attract real users and start gathering feedback.
To assess the attractiveness of unique features of new products, innovators target potential early adopters to figure out whether early adopters find those unique features useful. Related terms of MVP are mockup, proof of concept, and pilot experiment. For example, the first digital camera developed by Mr. Sasson while working at Kodak was a proof of concept capturing images electronically instead of on film. Similarly, the first tricycle automobile developed by Mr. Benz was an MVP of modern automobiles. It demonstrated the alternative means for horses to propel wheels.
However, upon drawing the interest of early adopters about mockups, the innovator’s ability to develop MVPs further to make them attractive to remaining market segments is often limited by the technology life cycle. Besides, MVPs may give misleading information; for example, poor performance and the massive size of Sasson’s first digital camera misguided Kodak management about the evolving prospect of digital camera.
History and purpose minimum viable product
MVP is a natural approach to begin the product life cycle. More or less, all products started the life cycle as MVPs. The technology life cycle often compelled innovators to pursue this approach. Besides, unfolding consumer preferences and competition responses have also been justifying the merit of MVP strategy for evolving products from the humble beginning.
In 2001, Frank Robinson coined the minimum viable product term. Subsequently, Steve Blank and Eric Ries popularized it. Through The Lean Startup book, Eric Ries popularized the MVP concept. He stressed the importance of quick learning through the MVP approach in product development. Eric Ries introduced the management practice of Build-Measure-Learn to leverage managers to begin the process of learning and improving products quickly. He presented MVP as the fastest and least costly way to get through the validated learning loop with minimum effort and risk.
In highlighting the uniqueness, Eric Ries stressed that, unlike a prototype, an MVP is not for testing design or whether the technology works. According to him, the primary purpose of MVP is to test fundamental hypotheses for building a business around a new product idea. An MVP is not always a product. Minimum viable products vary in type and range from simple smoke tests like driving traffic to a landing page to live prototypes.
Notable purposes of minimum viable products are:
- Quickly validate product idea hypotheses with real-life data to reduce risk and time-to-market for new feature releases.
- Testing product/market fit before building a full-fledged product by delivering value to early adopters quickly.
- Growing a pre-launch user base and collecting viable data on user behavior to shape future product initiatives and go-to-market strategy
- Save money and time that would otherwise be spent on a fruitless bunch of ideas.
Importance and benefits
- Learning consumer preferences at low cost–it allows a team to collect the maximum amount of validated learning about customers with the least effort.
- Assessing demand for technology uniqueness quickly—for determining whether customers will like unique features of a technology, MVP allows a quick and easy way to measure early adopters’ responses.
- Growing and updating features one after another for increasing revenue and profit—step-wise learning through validation offers the opportunity for profitable incremental addition and advancement of features.
- Step-wise learning and validation creating a flywheel effect—pursuing flywheel effect strategy for reaching radical performance through consistent incremental progression.
- Avoiding the risk of creating a bang with a burst of features—quick testing about the appeal of ideas to prevent the wastage of resources in developing a bust of features without having clear insights about their efficacy in meeting customer preferences and dealing with competition.
Examples of minimum viable products
- Carl Benz’s automobile—in 1888, Carl Benz released automobile MVP. Unlike horses or humans, it was a tricycle powered by an internal combustion engine. With a tiny fund, Carl Benz tested the attractiveness of replacing horses with an internal combustion engine with the potential of transforming the transportation industry. Carl Benz’s automobile MVP as a tricycle provided valuable data about the business prospects of automobiles.
- Xerox’s GUI-based workstation—in the 1970s, scientists at Xerox’s PARC developed a Mouse and Point-and-Click technology-based graphical user interface (GUI) as an alternative to textual command-based computer interface. Subsequently, the team developed an MVP of a GUI-based computer—Alto Personal Computer. However, despite users’ appeal to its uniqueness, Xerox management failed to detect the latent potential, leaving it to Steve Jobs.
- Winamp, free MP3 music player—Winamp was an MP3 MVP—a free application. The popularity of this MVP led to the development of commercial MP3 players, leading to Apple’s iPod.
- Uber—MVP producing favorable testing data of the idea of sharing rides using an easy-to-use mobile app led to the formation of Uber. However, despite spending billions in subsidies, Uber has been struggling to offer profit to investors to recover their investment.
- Autonomous vehicles—for sure, robot cars will bring several benefits, such as higher utilization of automobiles and safer roads. Although the military has shown attractiveness to MVP as an early adopter, billions of dollars in R&D for graduating autonomous vehicles from MVP are stuck.
Is MVP articulation of existing concepts with a new name?
The model of product life cycles as stages of development, introduction, growth, maturity, and decline appears to have MVP built-in. The evolution of products from the humble beginning to reaching maturity seems to suggest practicing MVP for adding and enhancing features step-by-step. Such time-proven advice has also been packed as a classical product life cycle management practice in creating snowball or flywheel effects. There is no denying that despite the proven efficacy of such product development and evolution approach, there has been a tendency to lump up features with the expectation of a linear correlation between the number of features and products’ appeal. On the other hand, there has been a recent trend of burning billions in subsidies to create the scale effect of MVPs. Therefore, the articulation of MVP underscores the importance of pursuing product development through an evolutionary approach.
The technology life cycle makes MVP a natural strategy
More or less, all significant products like computers, automobiles, mobile phones, and many more have evolved from humble beginnings. Those humble beginnings could be termed as respective minimum viable products. Hence, Apple I/II, Alto Personal Computer, initial MP3 players, Carl Benz’s automobile, and Motorola’s Dynatec were MVPs. Their evolution for creating growing success needed the advancement of underlying technology. Without technology progression, those MVPs could not have succeeded in growing with feature addition and improvement.
For example, if microprocessor and memory technologies had not grown, Apple could not have succeeded in GUI-based personal computers, a success story. Similarly, without the growth of Internet technology, PC-based streaming of small video clips could not have grown as audio and video successes like Spotify and Netflix. Hence, the success of the MVP strategy often depends on the scalability of the underlying technology core. Minimum viable product development or lean startup strategy should be linked with the technology life cycle. Due to high scalability in the early stage of a technology life cycle, MVP offers valuable insights about the likely adoption of new products by different user groups.
However, at the matured stage, insights derived from MVP run the risk of being misleading. On the other hand, due to the risk of pause or premature saturation of the technology life cycle, MVP insights suffer the risk of getting caught in a Chasm or failing to take off.
Limitations of Minimum Viable Product Concept
- MVP risks giving misleading information—unique features that find high appeal among the early adopters may not be equally appealing to the remaining customer categories. Hence, MVP’s initial success may be deceptive.
- MVP does not grow without the growth of technology—with the growth of underlying technology, MVP as a pure management concept runs the risk of failing to nurture a humble beginning into a growing market base, revenue, and profit.
- Risk premature disclosure of ideas to competition—as competitors are waiting in the bay, the experimentation with the MVP runs the risk of alluring competitors in the competition before creating enough barrier and value extraction capacity.
- Offering subsidies in creating the scale effect of MVPs—the initial success of MVPs runs the risk of providing subsidies in creating the scale effect. Unfortunately, many Startups have been caught in this strategy of creating scale effects, notably in the digital Innovation space.
There is no denying that MVP has risk reduction merit. MVP is an approach of quick learning and turning it into addition and advancement of features, which will likely produce profitable revenue. It’s a practical approach to applying flywheel philosophy in product development and evolution. However, minimum viable product development is not a new approach. Instead, MVP is the articulation of good practices in turning a humble beginning into a radical innovation by creating a snowball effect. Besides, the underlying technology core must be progressing to make a success out of MVP through layer after layer momentum gathering. Hence, at the beginning of the life cycle of the technology core, the MVP approach appears highly relevant. However, at maturity, the MVP strategy does not appear to offer much advantage due to the lack of scalability and uniqueness.