Download: Building Minimum Viable Products
Imagine building a product or service that no one wants. A lot of time and resources would have been spent in building that product or service. After all, there are no guarantees that something you build will attract the desired customer following.
This is the scenario that building a Minimum Viable Product or MVP seeks to address. A Minimum Viable Product is a concept laid out in the book, “The Lean Startup”, by Eric Ries. The concept approaches product or service development in a manner in which, a product or service is developed with a sufficient set of features to address the needs of early adopters.
The focus of this approach is to produce validated learning, whereby the lessons learned with actual interactions with customers, are fed back into the development of the product or service, over several iterations.
It is important to note that a minimum viable product isn’t just a stripped down version of the final product. It still has to be good enough to be viable. It has to offer sufficient value to generate enough early adopters.
Innovations are not adopted at the same rate by customers in a given market. It is adopted in stages, before adoption reaches market saturation. While some adopters will buy into an innovation in the early stages before it gets established, others will wait until it is well established.
The book, “Diffusion of Innovations” by Everret Rogers explains how, why, and at what rate new ideas and innovations spread based on 5 personas as outlined below;
Innovators (2.5%): Innovators are the first individuals to adopt an innovation. Innovators are willing to take risks, youngest in age, have the highest social class, have great financial lucidity, very social, and have closest contact to scientific sources and interaction with other innovators. Risk tolerance has them adopting innovations which may ultimately fail. Financial resources help absorb these failures.
Early Adopters (13.5%): This is the second fastest category of individuals, who adopt an innovation. These individuals have the highest degree of opinion leadership, among the other adopter categories. Early adopters are typically younger in age, have a higher social status, have more financial lucidity, advanced education, and are more socially forward than late adopters. They are more discrete in adoption choices than innovators. The also realise that judicious choice of adoption, will help them maintain central communication position.
Early Majority (34%): Individuals in this category adopt an innovation after a varying degree of time. This time of adoption is significantly longer, than the innovators and early adopters. Early Majority tend to be slower in the adoption process, have above average social status, contact with early adopters, and seldom hold positions of opinion leadership in a system.
Late Majority (34%): Individuals in this category will adopt an innovation, after the average member of the society. These individuals approach an innovation with a high degree of skepticism, and after the majority of society has adopted the innovation. Late Majority are typically skeptical about an innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership.
Laggards (16%): Individuals in this category are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion leadership. These individuals typically have an aversion to change-agents, and tend to be advanced in age. Laggards typically tend to be focused on “traditions”, likely to have lowest social status, lowest financial fluidity, be oldest of all other adopters, in contact with only family and close friends, very little to no opinion leadership.
It is the Early Adopters that the MVP concept targets. Although they make up a relatively smaller proportion of the target market at 13.5%, they have the financial means to try out new innovations, before they become established, and have thought leadership to influence further adoption.
The biggest advantage for a business to take the MVP route to product or service development, is the build-measure-learn cycle. The product or service is first built, whilst meeting the particular requirement of being minimal but viable.
It is crucial that it is viable, or else it will not attract the attention of enough early adopters. The product or service is released to actual customers, even though it does not have all the core features, whereby it would be considered a complete product or service.
The MVP can be shipped or released to customers, even when it is known to have bugs or faults. The primary aim is for the product or service developer to learn from actual users, interacting with the product or service.
Compared to traditional approaches, where the product or service would first be built to completion, based on assumptions and research, which may be inaccurate or unreliable. The problem with this approach is that, by the time customers interact with the product or service, it may be too late to make adjustments, after a lot of time, effort, and financial investment has already been put into the product or service.
The MVP approach therefore means that, a business can measure how the product or service is doing, with actual customers from the outset. After measure and learn, the business can then take the insights gained, and then feed that back into building better iterations of the product or service.
The lessons learned during the measure-learn part of the cycle, can be used to inform decisions about whether to persevere on the current path or to pivot: which is to change direction.
Minimum Viable Products present two main disadvantages. The first disadvantage is the risk of competitors entering the market, with similar products, that may be more developed than a business’ current MVP.
This risk is very real, especially in most technology markets that are software based, where it is easy for customers to switch products. For example, in an app store, customers can easily switch apps which are readily available for download.
The nature of an MVP means that the idea is often released to the world, when it is not sufficiently developed, and before measures are put in place to guard against the insurgence of competitors and copycats.
The second risk is associated with reputation. When a business puts out a Minimum Viable Product, its reputation is actually on the line. When people use that MVP, they will associate its quality and performance with the business.
Whilst most early adopters will bear with the flaws associated with a product or service, since their interest is in the innovation, other types of users may not be so forgiving. The end result of which may be a tarnished reputation for the business.
At the end of the day, it is up to the practitioner of the MVP approach to weigh in on the risks and benefits of taking such an approach, to product or service development.
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