Minimum viable product (MVP) and its importance in entrepreneurship!

Starting a business would be hard for many of us, especially when we are going to release a particular product or service that we won’t know if our target audience intends to buy or not! Imagine starting a business, putting lots of time and effort, and spending lots of money on production and then we face low sales for our product! This happens as a result of low interest in our product from the target audience! So what should we do here? This is where the idea of what an MVP is, enters! MVP, an abbreviated term for a minimum viable product, helps us to figure this struggle out! Here we will learn about what MVP is and why it is essential in business and entrepreneurship! Follow this article to the end where I’ve got a small gift for you that’ll help you to start your own business with more knowledge and confidence!

Table of content

What is MVP?

• What is low-fidelity MVP?

• What is high-fidelity MVP?

• What is the difference between low-fidelity and high-fidelity MVPs?

• So, what is MVP important for in business and entrepreneurship?

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What is MVP?

When we want to first start a business, it is important to have innovative ideas. These ideas can include either providing a product that is completely new to the market or enhance the products that are already being provided to the market in innovative ways. However, without enough knowledge about our target market and their will to buy our products, it is too risky to spend lots of money and time producing our products! In fact, determining the feasibility of our idea can be difficult without testing our product before production! If we decide to produce based on our own feelings or the opinions of our surrounding people, the results won’t be precise. As a result, when we start our business we may face low demands from the market, eventually ending in failure. This results in losing lots of money and time! So how does MVP help us here? To answer this question it is better to first understand what is MVP!

MVP, a minimum viable product, is the simplest form of the final product that we are planning to provide to our target audience. In other words, the MVP meaning is the product that we are going to provide for our early customers in its most basic form with its core features. Well, to explain more about MVP’s definition I should say that when we want to provide a particular product to the market we make it with different features and capabilities for customers to use. However, when we want to make its minimum viable product we only include sufficient features of our product in a basic form to provide it to our early adopter customers in order to attract them and capture their interest. Simply put, we can make an MVP with anything that is possible, the only necessary thing about it is to show our core features to the target audience! A minimum viable product can be as simple as sketching our website’s structure and tools! An important point to be considered when building an MVP is that we must make sure to develop it fast and don’t spend much time on it!

To have a better understanding of What an MVP is and its relevance to entrepreneurship I will introduce you to two main categories of MVP in the following.

Did you know?

The MVP for AirBnB was their own apartment and its features were airbeds to sleep on plus breakfast!

Or the MVP for Dropbox company was a video that explained the capabilities and functions of their technology!

These two real-time MVP examples have helped AirBnB and Dropbox founders become successful on their path to entrepreneurship!

What is low-fidelity MVP?

There are different types of MVP in the industry! Based on our business type and our products we can choose which MVP we should go for! However, a more important topic is that MVP is in two main categories, each belongs to a different phase and is used for similar yet different goals! These categories are low-fidelity MVP and high-fidelity MVP! First I start with the simpler category! So what is low-fidelity MVP?

Low-fidelity MVPs are simple minimum viable products that are used mostly at the initial phase of starting a business. It is used mostly to check if the problem we aimed for in the market is worth solving, understand customers’ needs and expectations, check if our solution is what the customers actually need, etc. In fact, low-fidelity MVP is used to check the feasibility of our idea in the targeted market by learning about customers’ struggles and desires! The low-fidelity MVP examples include:

• Mockups: product designs that are made to represent the actual product. These mockups can be either be physical or digital!

• Sketches: as it was mentioned earlier, sketches can be one of the MVP designs too; Like sketching our product!

• Demo Videos: making a demo video that introduces our product to the early customers!

• Etc.

But what is high-fidelity MVP?

What is high-fidelity MVP?

High-fidelity MVP helps us in our businesses to obtain our early customers, figure out the percentage of customers actually willing to pay for our products, understand opportunities for growth, improve our products, etc. In other words, these types of MVPs are used for real-time data about the number of people going to buy our products as well as obtaining feedback on our products that’ll help us what features we need to add and which ones to deduct! This category of MVP is usually used in the initial phases of a business as well as when we want to add a new product to our company! What are the high-fidelity MVP examples?

• Single Feature MVP: a minimum viable product that contains the most important feature of our final product.

• Concierge MVP: this minimum viable product is the humanized version of automated services. Instead of building up an application where people can order groceries online, we get the orders from them and buy them from groceries and deliver them personally to the customers.

• Wizard of OZ MVP: this is quite the same as the concierge MVP, except that the customers interact online not directly to us and they order something that they think is already available but it is not! For example the same online grocery service in concierge MVP example, we make an MVP for it which would be a simple web form for early customers. They will order the things they want online from there and then once we receive their orders, we will go and buy the things they want and then deliver them! In fact, we don’t have those items available, we just put their images and a small description to collect orders!

• Etc.

Did you know?

High-fidelity MVPs can be used to be presented to potential investors besides our pitch deck. Thus, they can see our products and give us feedback on them!

What is the difference between low-fidelity and high-fidelity MVPs?

After understanding what is low-fidelity and high-fidelity MVP, it is good to understand their main differences too! So here we will take a look at the pros and cons of the two categories of MVP!

• Low-fidelity MVP:

Pros

• • It has a low MVP construction cost

  • It takes less time to produce

  • It doesn’t need specialized skills for making it

Cons

• • Cannot represent the real final look of the product

  • It is not interactive for users

  • Less clarity for users

• High-fidelity MVP:

Pros

• • It has the ability to represent the final look of our product

  • It is interactive for customers

  • High clarity

Cons

• • Higher MVP construction price

  • It takes more time to produce it

• • It needs specialized skills to make it

So, what is MVP important for in business and entrepreneurship?

After understanding what MVP is and learning about its two main categories, it is time to understand why MVP is important for our business! Well, until now you may have understood the goals behind building minimum viable products as it was mentioned in the low-high-fidelity MVPs. Hence, the reason that why is MVP essential in our business is originated from its goals. We build an MVP to provide it to a group of our targeted market, the early adopters, in order to check a few important things including:

• Check to see if our solution is what the customers are looking for,

• Check to see if our product meets customers’ expectations,

• Identify customers’ actual needs and desires from our product based on their feedback,

• Learn about how many people are willing to pay for our products,

• Understand the unusable features of our products that our customers don’t need,

• And overall, check to see if our idea is generally profitable and feasible or not!

Thus, what is MVP’s importance? In fact, the MVP purposes help us determine whether our idea actually works or not, is it feasible or not. We can understand if our idea is what our target audience needs, does it solve their pain points, and what proportion of the market is going to buy our products. It helps us learn about the unnecessary features of our product as well as identifying the demanded capabilities and features that we should include in our product. An MVP is important in many ways, it helps us make the right choices when we want to start our business and when we want to expand our business as well as helping us attract potential investors when we are presenting our pitch deck. Plus, an MVP cost is much smaller than building the final version of our product, both in terms of money and time! Therefore, a minimum viable product gives us real-time data about our market with much lower costs and risks than an actual product!

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If you are still not sure about knowing what an MVP is, read this paragraph to understand why it is important to learn about an MVP in entrepreneurship!

One of the biggest challenges of starting a business for many entrepreneurs is that if their idea is feasible enough to attract an adequate amount of customers from the market to make profits! Well, market research can give us accurate information about our market and their needs, however, it is not sufficient to let us know if our solution is actually profitable too or not. If we start our business without making sure about the profitability of our idea, then we may face low demands and eventually end up failing with lots of costs in terms of time and capital! This is where we need to build an MVP! An MVP helps us collect real feedback from our potential customers to check whether our idea is feasible and profitable enough to start working on and spend time and money on or not. This happens with much less time and money spent! Hence, when we are starting our own business, especially a startup, it is advantageous to know what is MVP and its different types in order to build one for our own business!