What Does MVP Mean in Business?

To put it simply, MVP stands for ‘Minimum Viable Product’ and is a term commonly used in the product development stage of a startup. It is a concept that originates from ‘The Lean Startup’ book by Eric Reis and the principle is very simple - to create a basic version of a product or service to satisfy early customers and gather quick market feedback.

The minimum viable product will have enough core features to offer value to potential customers, but will act like a prototype to help businesses determine whether an idea is worth further development or highlight pain points that might affect its ability to make profit down the line. Think of an MVP like a science experiment: to test whether or not an idea will be successful in the real world. 

The concept of MVP is especially relevant to the tech industry, because whether you’re building a new website or a new software platform, knowing the degree of user interest and getting solid feedback is essential for success. 

MVP Characteristics 

Here are some of the main characteristics and features you should expect from an MVP: 

Basic Features

As touched on above, an MVP only includes the basic features necessary to provide value to early adopters. These are features that allow the product or service to work as standard i.e. addressing the primary problem, without all of the time consuming, costly extras. Unnecessary or non-core features are purposely excluded to reduce development time and costs.

Don’t have too much expectation for your initial offering - there will likely be a number of imperfections and parts that people really aren’t fond of. But getting this MVP out to the public lets you test your product or service and use constructive customer feedback to ensure the final product is perfect. 

Fast Development

While the speed of development will vary depending on the company size and complexity of the product/service, the main goal of an MVP is that it is launched quickly in order to gain feedback and insights for further development.

Fast development of an MVP saves business time and resources as focusing on the minimum set of features means that unnecessary development efforts are prevented, reducing business costs and allowing for better use of resources.

For tips on how to build an MVP faster, check out this blog. 

It Will Be One of Many 

The final characteristic of an MVP is that it will be one of many you do. MVP’s are tests, and you should continuously carry out small-scale testing so that you can improve and ultimately sculpt your perfect product/service. 

That being said, there is no ideal number of MVP’s, as the number will be influenced by the complexity of the product/service. For example, if the product has a number of interconnected features, it will likely need to develop various MVP’s. 

What Are The Advantages of a Minimum Viable Product?

• It is cost-effective - By focusing on very basic features, an MVP should be relatively inexpensive to make with as little effort as possible, which is especially important for startups with low capital.
  
  
• It can help to build customer relationships - Feedback suggests that customers enjoy interacting with MVPs, and if the business continues to develop the product/service, early adopters are likely to stay loyal and continue supporting the business.
  
  
• It can open the door to investment opportunities - Funding a startup can be a significant hurdle at the beginning of a business journey, but a solid MVP can capture the attention of potential investors.
  
  
• It will minimise market rejection - Without MVPs, you could spend lots of time and money building a fully developed product, to further down the line discover that there’s actually no market need or product-market fit for your offering. MVPs avoid this situation by testing an idea as early as possible. By gaining market feedback so early on in the product development process, the MVP can help businesses develop the best possible final product with the features and functionality that customers need.
  
• There will be little to no negative impact - MVP’s shouldn’t create too much (or any) negative impact around your brand as it will still offer value to potential customers.

Tramshed Tech Startup Academy 

If you’re looking for startup guidance, you’re in the right place. At Tramshed Tech, we understand the challenges entrepreneurs face, which is why we offer a free 10-week incubator programme for pre-start and early stage tech founders to help get their business ideas off the ground, called The Startup Academy. 

We have tailored the Startup Academy to support common pain points that occur in the early stages of starting a business to include idea validation, developing minimum valuable products, testing product market fit, building waiting lists and mastering startup pitches.

Our startups are supported through mentorship, on-demand content and independent learning materials via the Startup Academy portal as well as weekly peer-to-peer sessions. The programme culminates with a Showcase Day - an opportunity for the cohort to demo their tech and showcase their skills. 

Sound interesting? Register your interest here or discover more reasons to join a startup academy here. 

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We are Tramshed Tech: a startup ecosystem home to 50+ companies ranging from pre-revenue start-ups to scaling businesses with 600+ registered members from the digital, creative and tech communities. If you’re interested in joining us at any of our locations, please do get in touch.

Written by Kate Jones for Tramshed Tech.