‘MVP’ (Minimum Viable Product) is one of the most overused terms in Silicon Valley today. If you walk into any of the trendy cafés in Palo Alto you’ll hear the term being used by wannabe entrepreneurs at nearly every table. But what is an MVP, exactly?
Some people seem to think it’s a pretty slide deck of their startup idea, some think it’s a nice design mockup of the product, some people seem to actually be writing software code.
The term ‘MVP’ was first popularized in Eric Ries’ book The Lean Startup, where he said “The minimum viable product (MVP) is that version of a new product a team uses to collect the maximum amount of validated learning about customers with the least effort.”
The key words in that sentence are “learning about customers.” That’s the purpose of an MVP.
Startup history is littered with the dead bodies of startups who built a product that no actual customers wanted. Some spent millions of dollars in investor money proving that there was zero market demand for their product. So the purpose of an MVP is avoid that death by creating a minimum product first, getting it in front of real customers to see how they react, and then building out and refine the product further in a way that is informed by actual customers.
Think about the fact that Facebook launched with just a few key features and today it has thousands of features, all of which have been built from learning about what features people care about using. Facebook is one of the great examples of successfully using this process.
And yet there still seems to be confusion about what an MVP is, so here are my own thoughts. But first let me tell you (from my personal experience) what an MVP is not:
- An MVP not something you build to show; it’s something you build to learn from. Many people working on their MVP think they are building a demo to impress someone. That’s nice, but the purpose is to get actionable learning from real customers. Having a product in the hands of actual customers is the absolute best way to get actionable learning.
- It’s not going to get you funded. No doubt you’ve heard someone say, “As soon as our MVP is complete, we’ll show it to Venture Capitalists and raise lots of money!” In truth, this is backwards thinking because it implies that the purpose of an MVP is to show something (see point #1 above). Showing that you can create a clickable prototype isn’t going to impress investors — any 5th grader can do that. But showing them that you have discovered key insights into the wants and needs of real-world customers by having an initial product out in the actual marketplace will impress investors a lot.
- It’s not even a thing; it’s a process. If you embrace the MVP concept then you are actually embracing an iterative process of idea generation, data collection, analysis and learning. You’re embracing the concept of optimizing your path to product/market fit by getting early product releases out into the hands of customers so that you can learn from them. If you do this right, as Marc Andreessen wrote in his seminal Stanford post, “the market actually pulls the product out of the startup.” That’s what you want from your MVP.
Now I’ll tell you (again, from my own personal experience) what a good MVP is:
- It’s Simple. When DoorDash launched, it was a simple landing page with PDF menus and a phone number that the founders answered themselves. It probably cost less than $100 to build. And the learnings that they got from it allowed them to build a company that has now raised almost $190 million.
- It tests the right things. When Pandora first launched, the playlists were manually managed by humans. The thing they needed to test was Would people pay for a streaming music service? (ie, the thing they needed to test was not Could we write software that would choose music?). Once they successfully proved market demand with their MVP, then they made the investment to write the complex software required to choose music.
- It’s built for rapid iteration. I once worked for a software company where every time we wanted to implement a new feature, it took weeks of engineering process. The whole idea of an MVP is to be able to rapidly try out new features and see how the market responds. Rapid iteration accelerates the process of getting from your guess as to what the market wants to something that the market has proven it wants.
Want one more example? Well, here’s one you can eat.
My favorite kind of MVP is food trucks. For a relatively small investment an aspiring restaurateur can take her menu on the road, get feedback from real customers, iterate daily upon the menu and then — after having proven market demand for the product — she can make the investment in leasing restaurant space and building a kitchen and full dining room. That’s how a good MVP should work.
As Steve Blank famously said, “No business plan survives first contact with actual customers.” So getting a minimum viable product out in the hands of customers — and then using those insights upon which to build a plan — is the best way for entrepreneurs and innovators to build success.