As an entrepreneur, you may eventually come to the point of planning a startup and launching your software product. Initially, you only have the idea of the project. What’s next?
Statistics show that numerous startups continue failing because their application is not in demand among the users in the market. That’s why when you have a brilliant idea, do not rush building a fully-featured product and spending months for hard work.
There’s a more efficient and effective option to initially understand whether your idea will be required in the market. An MVP is a popular approach in startup product development, which will help you test your business idea and save both time and resources. This way you understand what users need and create an offering that they are ready to pay for.
Let’s take a look at the main steps on how to build an MVP.
1. Define the problem
The first phase is to check whether your potential product solves any users’ problem. At this point, you should get initial feedback from your potential target audience. You need to get answers to the following questions:
- Do they need this product?
- How can it help them?
- What problems will it help them solve?
The answers will help you to clearly figure out the main product goal.
There exists a practice to find out application objective based on your personal experience and challenges. Since personal thoughts are pretty subjective, you should ask a wider public starting from relatives, friends, colleagues, and partners: is there a problem they would want to solve in case they have a special device/tool? And then you can ask yourself: can I build such a product?
Thus, it makes sense to work on the main application idea that solves some issue and see how this idea is perceived by your potential target audience. If it is perceived well, then you can try and develop the product, and if not, then perhaps you should try another idea.
One of the good examples of a product goal is Snapchat. Initially, Snapchat performed only one feature - it allowed users to send each other images that disappeared after a while. This concept was tested among the community and gained success.
2. Do market research
Well, you have chosen the product idea. Obviously, there are already similar products available, so you need to make competitor and market analysis. Quite often, startup entrepreneurs skip this stage as they believe in their product uniqueness, but this approach will most likely lead to failure. The main reason is that the customers may already be using a similar solution, and might not be willing to switch to another one.
That is why competitor analysis is of utmost importance. You should do your homework and analyze your main competitors, find the opportunities where you can provide a better service than them. If possible - try their products or services.
In case you see some competitors’ features are better than your planned product, then it’s a great opportunity for you to improve your idea, to bring even more benefits to the customers.
Furthermore, always bear in mind that it takes more than just a product to get buyers and win the competition. You can survey the competitor’s product users and ask whether there are any issues to be improved. This way, you turn their weaknesses into your strength by creating a hot feature that definitely will be in demand.
Additionally, there are numerous tools for competitor analysis that allow gathering important data from your competitors’ websites. Such tools provide you with website traffic, engagement geography, profitable keywords etc.
Here is the list of the most popular instruments:
The process of market and competitor research will also help you figure out the key audience that potentially may be interested in your product. To choose the audience, you should tilt toward the market segments for whom it will be useful, or the ones using your competitors’ solutions. You need to create the buyer persona.
A buyer persona is a semi-fictional representation of your ideal customer based on market research and real data about your potential customers. When creating your buyer persona(s), consider including customer demographics, behavior patterns, motivations, and goals. The more detailed you are, the better.
3. Define the main features and prioritize them
By the time you have executed the market research, bearing in mind the users’ problems to solve, you can switch to creating product features most valuable for the customers.
Firstly, you have to define the user flow. It is the path taken by a prototypical user on a website or app to get the desired result. With its help, you are able to define the required features.
For example, to arrange a taxi in Uber, you need to enter the pickup location (i), the destination point (ii) and tap “Confirm” button (iii). Additionally, you can enter some extra settings like a form of payment, choosing ‘Cash’ or ‘Credit Card’. It is called user flow and each stage has its own ‘must-have’ feature for the best user experience.
After creating the user flow, we recommend you to create the list of features your product should have and prioritize them sorting by importance. Here comes Value Proposition Canvas - a tool which can help ensure that there is a fit between the product and market. There are three key points: Jobs-to-be-done, Pains, and Gains. You need to fill in each component to define how your product will meet the customers’ needs.
Source: https://www.strategyzer.com
Here is an example of Tesla VPC figuring out the best product-market fit.
Source: https://designabetterbusiness.com
After listing gain creators, pain relievers and products and services, each point identified can be ranked from ‘nice-to-have’ to ‘essential’ in terms of value to the customer. A fit is achieved when the products and services offered as part of the value proposition meet the most significant pains and gains from the buyer persona.
Now you can categorize the features by creating a table with several columns called ‘must-have’, ‘nice-to-have’, and ‘additional’. Try to prioritize the features among the columns so that the top one is the most important.
4. Validate your idea with prototype
Once you have made the market research, keeping in mind all the strengths and weaknesses of your potential competitors, you should substantiate your idea before turning to the development stage. One of the most cost- and time-effective ways is to create a prototype before proceeding to MVP development. This way you see how will your future product look like.
It is more effective than a static wireframe because it is very close to the finished product. Not only does it bridge the gap between conception and realization for the development team, but it can help your future customers and potential investors to understand it too.
Moreover, one of the best practices in figuring out the audience is to select the narrow range of early adopters to test your idea. They are the potential users interested in the product on the stage of the idea validation. They are looking for some problem solution you are ready to provide. These could be your relatives, friends, colleagues, business partners etc.
Furthermore, you can use your personal network or social media. It could be forums and communities, groups, Quora, blog posts etc.
At this stage, you finally understand whether your idea is reasonable to develop further. Or vice versa, you may decide to terminate your product creation based on the previous research results.
Here’s a great example of creating and testing a prototype using the approach named Design Sprint. In this approach created by Jake Knapp while working at Google, all the stages take place within 1 week:
5. Build, Measure, Learn
When you have reached the development stage, we recommend continuing your MVP creation process with the help of Lean Startup methodology called Build-Measure-Learn (BML). A core component is the build-measure-learn feedback loop.
Source: http://theleanstartup.com/principles
Let’s discover the cycle stages:
Build
Here you figure out the problem that needs to be solved and then develop and launch your MVP to begin the process of learning as quickly as possible. There are different options to choose from, but we want to emphasize four options of development:
Find a technical co-founder
One of the main benefits is that the technical co-founder interested in your product and idea will work as hard as you do to build a brilliant application. He will always find the routes to improve the product version because he has the same passion as you do.Find a freelancer or a freelancing team
Instead of searching for a technical co-founder, you can hire a team of freelance developers as an option. You are able to choose from dozens of platforms like Upwork, Google search, or you may have some contacts in the required sphere to find an experienced team.Hire in-house developers
The middle option between a technical co-founder and a freelancer is to hire a highly skilled developer in-house. This way allows you to monitor and control their progress daily. However, this option may also be funds-consuming as a skilled professional should be motivated both by the project idea and the salary.Find a software consultancy
The main benefit of this choice is that such agencies have sufficient experience in different MVP creation that allows you to be sure of getting exactly what you need. Having built many the agency knows beforehand all the methods and approaches that may be useful for your product creation, and will contribute to the success.
Once the MVP is built and launched, you can work on tuning the engine. This will involve measurement and learning and must include actionable metrics that can demonstrate cause and effect question.
You may also like: 7 Reasons to Use Ruby on Rails for Your Startup.
Measure
During this phase, you determine whether real progress is being made or not, and this involves measuring the results obtained during the BUILD stage.
Firstly, you should pay attention to Customer Acquisition Cost (CAC) and Average Revenue Per User (ARPU) - sales metrics. You can use their correlation to realize whether it is profitable to continue the development.
Additionally, you can utilize Google Analytics or Hotjar for the website to see the traffic, conversions, etc.
Learn
Here you summarize the accumulated measurements: should it “persevere”, or should it “pivot”? Persevere means moving on with the same goals. At this stage, you are able to launch the final product and collect the users’ feedback for the future improvements.
On the flipside, pivot leads to changing or shifting some of the product strategy aspects. It means you should change some features or choose another development strategy. Afterward, you would have to document your findings and share them.
To conclude, we can simplify the BML loop and figure out the main points:
- Define whether the product idea solves the users’ problem.
- Quickly manage an action or a program that will test the idea with the users.
- Obtain feedback from your customers.
- Consider the sustainable development of the product. Will you be able to maintain the current level of engagement?
Getting feedback
Having finished the BML cycle, you should always collect and consider the customers’ feedback. The matter is your customers are the only people who may definitely figure what features are important or not.
There are different ways to collect user feedback data. One of the best ways is to interview and survey your early adopters - the users interested in the product on the stage of idea validation as they are looking for some problem solution you will be ready to provide.
How to find early adopters? As already mentioned, we suggest that the best channels are socials - Facebook and Linkedin groups, Quora answers, and, of course, forums and communities, like reddit threads. Basically this can be any online resource where your target audience can be found.
Conclusion
By the moment you have collected the users’ feedback, you should conclude whether it is reasonable to continue improving the product.
If there are many positive comments with useful criticism, then you should take them into consideration and go on improving the product that is already a success. In case you see the product failed to attract customers, then you may think of choosing another idea or trying to change the existing product.
To sum up, the MVP concept allows you to test your business idea and see if it is reasonable enough to create a fully-featured product. Also, it gives you an opportunity to save much money instead of injecting funds into a forehand useless product.
If you are looking to build a minimum viable product, Codica Team will be glad to help. We have extensive experience in MVP development, in such domains as marketplaces, travel, fintech, e-commerce. Let’s get in touch!
