Small business owners or startup creators, brilliant as they are, have the same problems. The minimum amount of money prevents you from launching a full-fledged study of a new market you want to enter. And also the lack of connections with the target audience. This becomes the biggest problem in the implementation of fresh ideas and often sends them to the scrap, without the hope of a return on the invested forces and funds.
That is why the concept of developing business ideas was created, designed to save time, money and get to know your direct user, and it is called MVP. What is it and how can it be useful for small businesses and startups? We will talk about this further.
The Secret to Business Development – MVP
According to research, 20% of new companies fail after a year. This is why a large number of startups choose the MVP path.
Minimum viable product is a way to verify business assumptions for custom software or test the demand for a new product with minimum investments. MVP is a method that allows you to test the viability of a product with minimal investment, to understand whether it is needed in the market and what its potential is. That is, it retains the main functionality that interests the target audience. At the same time, what is not yet needed is eliminated.
This method requires less preparation time and less financial resources. At the same time, it allows the user to fully evaluate the functionality and helps him from his opinion about the product.
Product testing allows you to assess the real chances of an idea for viability, to understand what needs to be improved, added, or completely removed before full implementation.
It should be noted that the use of MVP is most often relevant for small businesses and only in those areas where maintaining the minimum qualities of the product does not affect the safety of users. That is, it is possible to launch food delivery in a reduced mode, but it is impossible to release an unfinished car for trial sale because this endangers the life and health of the user.
Why MVP is useful for business
In fact, its benefits are enormous if you approach the minimum viable product organization wisely. For this it is important:
- estimate the resources that will be needed;
- make a plan;
- choose the right audience;
- correctly assess the success of the MVP.
Well, now let’s talk about the MVP benefits that aspiring entrepreneurs can learn.
Checking the viability of a product requires several times less financial investment than the implementation of a full-fledged one. You will need a small budget, a minimal but competent team to isolate the most important features and implement them in a starter proposal for your target audience. However, don’t expect big profits even if you manage to get the trial to market. Remember that overpricing a raw product can be negatively perceived by users.
Along with minimizing costs, risks are also reduced. When 10-15 times less funds are invested in a project than in a real work product, then the probability of financial risks is practically minimal.
Using a product allows customers to form their opinion about it. And here the main thing is not to miss this feedback. It is worth listening to the desires of the audience in order to be successful in the market, among competitors.
Fast time to market
Adaptation of the product to the needs of a modern user will allow in the shortest possible time to adjust the “raw” project to the ideal full-fledged version and enter the market as a real competitor. If you spend time and money on creating a full-fledged product initially, and after entering the market will send it for revision, then you will spend twice as much money and effort. In addition, during the period of rework, you can lose your place in the market.
Search for investors
When a person is looking for where to invest his finances, they intuitively want to do this in a working project that can give a 100% return. Investing in unverified products is very dangerous, unlike a market-proven MVP. The real results of the popularity of your offer can be presented to a potential investor and push him to a decision on cooperation.
When testing your concept, it is important to grasp the main features and set aside unnecessary ones. It is better to add additional ones during the analysis of the MVP’s work in the market than to lose money for hastily implemented redundant functionality.