A method for developing market-ready products. A minimum viable product (abbreviation: MVP) is the "smallest functional product". It is used to test basic functions step by step in the course of product development. Customer feedback makes it possible to optimize the MVP in each iteration loop until a market-ready product is finally created. This product is adapted to the needs of the customer.
What is a minimum viable product? Definition, application and examples
The development and marketing of products is resource-intensive. If the end result of the process is a product that achieves poor sales figures on the market, a company has wasted a lot of capital, effort and time. To reduce the risk of failure, there is the concept of the minimum viable product.
A minimum viable product (MVP) is limited to the most necessary core functions. Nevertheless, it offers customers a concrete benefit even in the first stage of development and can be used according to its purpose. Customers test the functions of the minimum viable product and provide feedback.
The further development of the product is based on this feedback. The product is continuously improved based on the findings from the customer feedback. This process takes place in several iteration loops until a market-ready product can be developed that meets the customer's requirements.
Application areas of the minimum viable product
In the context of the minimum viable product, the term "product" is not only applicable to physical products. The concept originally comes from software development. In his work "The Lean Startup", entrepreneur and author Eric Ries took up Frank Robinson's idea of the minimum viable product, which had been around since the 1990s, and developed it further as part of his lean startup method.
Eric Ries' work made the Minimum Viable Product known to entrepreneurs worldwide. Although intended for software development in the book "The Lean Startup", the Minimum Viable Product was also increasingly used in the development of physical products.
The concept of minimum viable products can also be applied to services and business ideas. In order to check whether a service or business idea is popular on the market, the most basic components of the service or business idea are initially offered on the market and continuously optimized based on customer feedback.
Differentiation from the minimum marketable product and prototypes
Comparisons of the minimum viable product with the minimum marketable product (MMP) and with prototyping occasionally lead to misunderstandings.
The minimum marketable product differs from the MVP in that it is not only functional, but also marketable. It comprises more than just the core functions and its features are geared towards specific customer needs. As a rule, it is a further development of the MVP that is the result of several iteration loops.
Unlike the MVP, prototypes are not necessarily functional. They are often used for the external visualization of an idea and to test its technical feasibility. You can also obtain qualitative feedback on prototypes from your customers. However, when presenting prototypes - unlike with an MVP - you receive far less or no data to evaluate the usage characteristics. This is because customers can hardly or not at all test any functions on a prototype.
In the innovation process of companies, it is not necessary to decide for or against MVP, MMP or prototype. These three methods often coexist, with the prototype representing the first step in the development of a product. This is followed by the development of several MVPs and finally the development of the minimum marketable product.
MVP: advantages and challenges
The Minimum Viable Product (MVP) promotes innovation in companies. Permanent innovation is one of the core requirements in a digitalized and fast-moving (business) world. Even if not all industries and companies are equally affected by the dynamics of the market, it can generally be said: Nowadays, if you don't launch your product on the market early, you run the risk of it being outdated when you enter the market or at least no longer meeting the requirements of your customers.
This is where an MVP can help. Because with the MVP, you realize a fast go-to-market. The feedback from the market on each version of the MVP shows the potential for improvement that you implement in the iteration. You can also use the feedback to identify the risks of your idea and manage them better in a new version of the MVP.
The optimizations allow you to quickly develop a market-ready product with a high chance of success. As you only equip the MVP with the core functions, the effort required to adapt the product as part of the iteration loops is minimal. This saves you the greatest effort and the highest costs for the final stages of production when working with an MVP.
These are all the advantages at a glance:
- Minimization of risks in the development of a product
- Saving effort and costs in the first stages of production. This corresponds to modern lean management.
- User feedback favors a detailed adaptation of the product to the needs of the general market
- Fast response to rapidly changing market requirements
- Many areas of application: Development of physical and digital products, development of services and development of business models
Challenges:
One of the challenges of using an MVP for established companies is breaking with tradition. Especially for established companies that have been successful in recent decades with their business models that have barely changed, it is difficult to imagine presenting customers with a product that is not ready for the market and obtaining feedback on further production.
However, a change is gradually taking place and companies are showing a greater willingness to innovate. As a result, even big players are applying start-up methods in their innovation teams, such as the lean start-up method described by Eric Ries with the minimum viable product (MVP) as an integral component.
The following problem is also closely linked to the challenge of breaking with existing traditions: experience shows that founders and developers already have a concrete idea of their product at the start of the production process. Discarding this idea and adapting the further development of the minimum viable product to user feedback can demand a great deal of self-conquest from those responsible.
Last but not least, even with a great willingness to innovate, there is another challenge. The cost-efficient application of the minimum viable product concept requires experience, knowledge and expertise. It therefore makes sense for companies to seek the support of experts in the development of minimum viable products. If you would like an insight into how a minimum viable product is developed, we recommend visiting our page on MVP development.
To the market-ready product with the minimum viable product: Examples for the application
- Dropbox: The founders of Dropbox had not yet created a product, but turned to the users anyway. They created a demo video to describe Dropbox and its functions. Because the idea was well received, the founders actually developed the planned tool and became multi-billionaires by implementing their idea. Dropbox is an example of how the MVP can be applied to digital products.
- iPhone: The iPhone has never been a minimum viable product. But the history of the individual versions is an ideal example of how the concept of the MVP can be applied to physical products. Initially, the company wasn't sure whether users would even like a cell phone with an on-screen keyboard and other innovative functions. They therefore developed the first iPhone in such a way that it was limited to basic functions. Over time, the brand launched new versions of the iPhone and adapted them to the increased market requirements.
The Minimum Viable Product (MVP) is of great importance in the development process of digital and physical products, services and business ideas. By definition, the MVP is the smallest functional product and therefore only contains basic functions. User feedback on the first version of the MVP enables companies to further develop and optimize it. In practice, this brings companies closer to the market-ready end product with each version of the MVP. The constant feedback from customers and its consideration in the development process means that working with the MVP helps to manage the risks in product development and increase the chances of a successful product launch.
FAQ
What is the purpose of a minimum viable product?
A minimum viable product is used to obtain feedback on the basic functions of a product in order to make further developments to the product based on this feedback. The aim is to launch a product that has been tested several times by customers, offers users the greatest possible benefit and best addresses their needs.
When should a minimum viable product be used?
Start-ups and established companies should make use of the Minimum Viable Product (MVP) if they have expensive development and production cycles. The use of MVPs is also recommended in fast-moving industries and for innovative business models.