Product-market fit is the holy grail for any startup. But achieving it is a challenge. Despite years of planning, research, and experimentation – only 20% of startups manage to reach the product-market fit.
Despite the difficult odds, achieving the product-market fit is possible. But for that, you must have a clear definition of what the product and market fit would look like. That’s where minimum viable product (MVP) development comes into play. It lets you gather real-time feedback from users and use those insights to refine your product until it attains the sweet spot where it appeals to a strong market demand.
In this blog, we’ll discuss what is an MVP and how it can help you achieve product-market fit. Let’s begin:
What is an MVP?
An MVP is the earliest version of a product with enough features to engage early adopters and gather real-time feedback from them for future iterations. The idea is to test the potential of your idea in the real market before investing significant time and resources in building it.
Let’s understand MVP with a few successful examples:
- Instead of building an elaborate cloud storage system, Dropbox founders created a simple video demonstrating what the product does. It helped them gauge user interest before building the actual product.
- Uber MVP was a simple web page that allowed users to book rides from a mobile or the web, pay from the app, and share feedback about the driver. This MVP version received funding of $1.25 million before the founders iterated it with new features.
- Airbnb launched its MVP as a simple web page promising accommodation with basic amenities like breakfast, free Wi-Fi, and networking opportunities with like-minded people to IDSA’s International Design Conference attendees. The feedback they received helped Airbnb founders validate their assumptions before they enhanced their website with features like the Experience option, the Adventure option, managing trips, secure payments, talking to hosts, and guest and host reviews over the years.
How can MVP Help You Achieve Product-Market Fit?
An MVP can help you achieve product-market fit by:
1. Testing assumptions before building the actual product
At the initial stage, you may have many assumptions about your target customer and the market. Unless you validate them, you may end up with a product that your target audience may or may not find appealing.
MVP ensures you don’t leave anything to chance by testing your assumptions about the target audience. When you release a product MVP to a smaller group of people, you get real-time feedback that helps you understand whether your assumptions are accurate or not. Then you can use these findings to improve your product in a way that aligns with your target audience.
Airbnb is a popular example of how you can use an MVP to validate assumptions before building the actual product. The Airbnb founders’ assumption was that people would pay to stay in a stranger’s home. To validate it, they launched a simple website promising air mattresses in their living room, free Wi-Fi, free breakfast, and the promise of a unique networking experience with like-minded people.
They could rent out space or build new beds. However, that would have led to a lot of time and cost wastage if the assumption was not correct. So, they minimized the risks of investment by leveraging their existing assets to test their assumptions as quickly as possible.
In the end, Airbnb received a positive response while keeping the risks of investment to a bare minimum.
2. Developing the product iteratively
An MVP also helps you develop the product iteratively instead of investing significant time and resources into building a product that may or may not work. With an MVP, you can release a basic version and gather real-time user feedback before you proceed further. Then, you can use the findings to refine your product based on the market demand.
Slack is a popular example of a brand refining its product on the market demand. They created an MVP of what would become Slack later, gathered feedback from early users, and continuously updated the product based on these findings. This iterative approach helped them build a communication tool that is widely used in enterprises.
3. Minimizing waste
An MVP lets you focus on core features that are essential for your target market, eliminating unnecessary bells and whistles. This way, you can build your product faster while bringing the development cost down.
Uber is a great example of how a good MVP can minimize waste. Instead of investing too much time and resources in building a heavy website, they kept it basic as you can see in this image:
The features were less, but enough to attract users and investors. Users could book rides on the go, meaning they didn’t have to wave at each taxi driver and bargain about the rates. With the in-app payment option, they didn’t have to worry about cash. With the feedback, they could let others know whether the driver could be trusted or not.
By starting small and achieving initial feedback on its MVP, Uber gradually added more features like live tracking, fare estimation, and splitting, automated payments, linking to mobile wallets, etc. Even today, Uber is using user feedback as a base to further improve its product to achieve the product-market fit.
How to Build an MVP the Right Way to Achieve Product-Market Fit?
1. Identify the core problem
MVP becomes a misfire for many startup owners because they fail to define the core problem they’re trying to solve. As a result, the MVP becomes centered around the assumptions about the problems consumers might be facing instead of the problems they’re actually facing.
To avoid this, ask yourself what problem is your MVP trying to solve. Is it making the process of hailing a ride easier? Is it solving the problem of song piracy and low-quality music? Is it reducing the time it takes for people to go out and shop?
Once you figure out the problem, you can build an MVP that solves actual user needs and attracts early adopters.
2. Start small
Building a product is tempting. You may not even realize when you may fall with your own product and overwhelm it with too many features. Many startup owners fall prey to this mistake and bear the brunt in the form of an extended budget, a poorly-received product, and heavy financial loss.
Don’t make the same mistake. Start with only the features that solve your purpose. This way, you can quickly get it into the market and gather feedback. The sooner you launch the MVP, the sooner you’ll gather feedback and pivot based on the market requirements. Even if the MVP doesn’t turn out to be as expected, you would have enough time and budget left to refine the product.
3. Gather user feedback
The core purpose of an MVP is to gather real-time feedback. Now, if you build it but do not gather user feedback on it, the MVP would be a waste. So, don’t shy away from reaching out to users for feedback. Encourage them to offer thoughts, suggestions, and pain points. The insights you gather would help you see if the MVP meets user expectations or if you need to adjust it a little.
4. Prioritize user feedback based on your end goal
While you shouldn’t undermine the importance of user feedback on an MVP, you should also not treat every user feedback as the top priority. It’s because it requires significant time and resources to implement user feedback on a product. If you implemented user feedback that doesn’t make much impact on your product and the user experience, all the efforts you put in would go to waste. That’s why it’s essential to prioritize user feedback wisely.
To prioritize user feedback, ask yourself the following questions:
- How much user feedback would improve the overall user experience on a scale of 1-10?
- How much user feedback would bring you closer to your product goals on a scale of 1-10?
If your answer is between 8-10, treat it as the top priority. Keep 6-7 as middle priority and 0-5 as low priority.
5. Take help from experts if you can’t figure it out
Creating a simple MVP is challenging. Creating the one that helps you achieve a product-market fit will require even greater expertise than only someone offering MVP development services can have. So, if you feel you can’t figure out your product MVP, do not shy away from taking help.
An MVP expert has enough experience building MVPs on products like yours. They can guide you on what can work from the market perspective and what cannot. This way, you can build an MVP that resonates with the masses and is uniquely accepted.
How Would You Know If Your MVP Will Help You Achieve Product-Market Fit?
Here are the signs that would indicate if the MVP you’ve built for your product would help you achieve the product-market fit:
- Users would show an active interest in using your MVP, indicating it meets their requirements. They would also spend a significant time interacting with it, suggesting that your MVP is engaging and offers them value.
- Users would recommend your MVP to others and even offer constructive feedback to improve it. It indicates that people like your idea and want you to refine it further to better meet their requirements.
- Your sign-up rates would go up as more and more will show interest in using your MVP.
- You would see a significant reduction in the churn rate, which happens when users don’t find a product appealing.
You can also measure the success of your MVP with user engagement metrics like active users, session duration, and app opening rate and conversion metrics like sign-up rates, upgrades, and sales.
Author Bio:
Tricia Pearson is an experienced writer at Net Solutions with five years of domain experience across marketing, Tech, and B2B solutions. She works to inspire creativity and encourages team members to bring their best to each project. Tricia thrives in competitive teams and gets satisfaction from late-night writing sprints. She prefers reading by the beach, hiking, and discovering new local cafes during her downtime.
Did you know that nearly 70% of startups fail?
There are many reasons for this, from disharmony in the development team to a lack of product-market fit.
And what’s more, there’s rarely a single reason why a startup fails.According to CBInsights, there are 20 main reasons.
You can check them out in the image below.
Some may come as quite a surprise.SOURCE: CBINSIGHTS.COM In 2011, The Lean Startup by Eric Ries changed the history of startups by introducing several new concepts.
The minimum viable product, or MVP, was one of them.
