How MVP Puts an End to Your Startup Confusions and Funding Problems?
Do you know that approximately 70% of startups fail?
There are many reasons for this.
Starting from the conflicts in the team to the lack of product’s need in the market, it can be anything. A couple of reasons combine to contribute to startup failure.
As per CBInsights, there are 20 key reasons why startups fail.
Here’s the list:
Did that list scare you?
Don’t worry, I am about to give you a solution.
Back in 2011, Eric Ries introduced a few concepts for startups via his book The Lean Startup. One such concept that took the pace and became a solution to startup failures is Minimum Viable Product (MVP).
The MVP aims to get user feedback before creating the final product. This feedback helps you shape the product according to market needs and prevent failure.
In today’s competitive world where many are trying their hands-on creative startup ideas, developing an MVP has become a common practice. It’s a savior in startup planning. It never lets you lose your way amid overwhelming startup ideas.
If you are on the verge of launching a new product, you must try MVP first before investing a fortune on a fully-fledged startup.
What is an MVP?
A minimum viable product is a product with enough features to satisfy customers’ needs and get feedback to shape it for the future. Call it a bare-bone design to test the product in the market and see the potential of success.
Check out this image showing the difference between an MVP and a complete product.
MVP needs the most essential function for initial testing. Anything more than that should be excluded. The MVP version works as a tool to help you determine your product’s potential. The method from which you go through to test your MVP product gives you further insights on how to develop your future product.
How MVP Works?
MVP allows you to boost the product launch because it requires basic, essential features to start getting real feedback from potential users on your concept. It requires less time and minimal budget to enter the market.
Is MVP only for Startups?
Not at all.
Business owners think that MVP is a startup product.
It’s a myth.
Marketers and business owners often think of growing their organization by increasing the number of features or lists of services.
By starting with an MVP, businesses can ensure that the new feature is exactly what users needed.
Heard about the beta version?
If users like the new features of MVP, one can go further with confidence. If not, businesses will know about the improvements needed. Either way, once you get the feedback, you can work on the features and launch a better fully-fledged version.
You must be thinking why to go at such lengths to test the product or new features. One can do so with an official product and improve along the journey.
Read further to know why MVP is more than just a testing product.
Why MVP is Important to Validate Your Startup Idea?
An MVP is a collector of early data that confirms customers’ interest in your product. Positive results, as usual, gives green light to move forward with a full version while negative results lead you to improve your product and try again till you win the users’ interest.
By building and testing an MVP product, you can:
- Save time, money, and resources
- Ensure that you are investing in a product with success potential
- Verify whether the product is captivating to the targeted audience
- Figure out prevailing trends and how to take their advantage to build the future version of the product
- Collect a handful of customers for your future product
- Eliminate wasting time and money in unnecessary functionality from the final product
- Catch the eyes of early investors and raise funds to keep your startup going.
Let’s dig deeper into the last benefit of why MVP is necessary to raise funds.
Why Do You Need an MVP to Raise Funds?
Generally, there are several risks involved while approaching investors with your startup idea:
- Team Risk: Do you have a competent team to build and run your business?
- Market Risk: Is your targeted market large enough to consider promising for future potential?
- Time Risk: Is it the right time to introduce your product to the market?
- Product Risk: One of the biggest risks – can you convert your idea into a revenue-generating and audience-engaging product.
- Value Risk: Is your product usable and valuable enough to survive for a long time.
There are two ways startup owners can adopt to eliminate the risks:
- Sell the Idea and Vision: elaborate on what exactly do you need, how to create it, how the product generates revenue, and at the end, sell it.
- Sell the Results: demonstrate that your product is working and can generate revenue.
If you are ready to go the first way, just imagine pitching your idea to investors who love to see your product before thinking of giving money….
But you don’t have one.
This is where MVP fills the blank.
Without MVP, you can increase investors’ odds to pass on your startup idea. Let’s say even if they like your idea, they need evidence that their money is going in the right hands.
In a world where 70% of startups fail, you have to do everything in your power to convince investors and raise funds for a long journey ahead.
If you decide to create an MVP, it means you choose to walk on the second path of selling the results instead of taking the risk of selling the idea which may turn out to be a billion-dollar startup in the future.
Everything is possible.
Without MVP, you can only raise the imagination of investors. But with MVP, you enable them to actually see your product alive, touch, and even use it, triggering all their emotions and getting your idea validated.
It seems a lot easier and less risky.
There’s one more thing about MVP.
Building an MVP gives birth to expectations. Not only you, but also your team, potential users, market, and investors are going to join the journey. You have to create an MVP that proves itself worth the time, effort, and most importantly, money.
Ready to Develop Your Next MVP?
Or should I say, ready to walk on a risk-free journey while saving time, money, and resources?
If you have more questions on how to develop an MVP, don’t hesitate to ask or get in touch. We are happy to clear your way.