Customer Centricity

Minimum Viable Product (MVP): Bring customer feedback and product development together quickly and efficiently

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2019-10-07
Reading time: 12 minutes

Misconception. Products are not developed quietly under closed doors or within one's own organization. Instead, customers must be involved in the development process as early as possible.

The Minimum Viable Product (sometimes also called Minimal Viable Product or MVP for short) is one strategy for this.

The Minimum Viable Product is not a prototype, but a pretotyping technique. Yes, you read that right. Pretotyping pursues the goal of building the right thing with the least amount of effort, rather than trying to build things right.

Make sure you are building The Right It before you build It right

Alberto Savoia (Autor "Pretotype it") Tweet

Read this article to find out what benefits the MVP can bring to your company for customer-centric product development.

Minimum Viable Product - concentrated knowledge at a glance

How to use the Minimum Viable Product (MVP) correctly in the customer-centric development of products

The MVP as one element among other pretotyping variants is already used today in almost every company that wants to get quick feedback from early adopters of solutions.

So what does a Minimum Viable Product look like in terms of definition and what functions does it have?

Three main MVP characteristics

It must offer sufficient benefit for the early adopters, i.e., the first and early users, to buy and use it. The product idea must therefore be convincing from the outset.
Early adopters are shown a form of future benefits in order to identify the long-term benefits so that they can be tied to the product. The core benefits of the product should therefore be immediately apparent at market launch.
The feedback loop is the most important aspect. It serves as a directional tool for future product development and pushes the business idea further.

The MVP fits perfectly into Eric Ries’ Lean Startup Cycle, which is all about building something as quickly as possible together with customers, then measuring and continuously learning from it. This helps your business avoid the risk of developing solutions that no one needs. By realizing a product idea, aligning its functional scope with customer needs, and validating this again and again, you will succeed in advancing an idea that really has potential.

The Lean Cycle can be found here in the following graphic. The Build-Measure-Learn method lets you iteratively test MVPs. Learn more about the Lean Startup approach here.

The value added of a Minimal Viable Product is now clear. But which business model or industries is this approach suitable for and is it really useful? As a rule, technical or technology-oriented products are suitable for this type of product development strategy. A development strategy with a Minimum Viable Product essentially involves three steps:

Step 1

Create a simple and single product that solves a very small subset of the potential customers of a large problem for your target group.

Step 2

While solving a small subset of smaller problems to address customer challenges, you will tackle the larger and more comprehensive problem. Why? Because you’re constantly interacting with the subset of your customers and getting feedback.

Step 3

Use this product development strategy to create a vision and value proposition for the future end product.

Learn how to develop a customer-centric value proposition here.

The Minimal Viable Products existing today usually have a fundamental flaw: they only represent the functional level, but forget the importance for customers of the other levels such as emotional design, usability and reliability.

If you're not ashamed of the product you've launched, then you've launched it too late.

Reid Hoffman Tweet

AirBnB as an example for Minimum Viable Products

Shortly after moving to San Francisco in October 2007, roommates and former classmates Brian Chesky and Joe Gebbia couldn’t afford the rent on their loft apartment. Chesky and Gebbia came up with the idea of putting an air mattress in their living room and turning it into a bed and breakfast.

The initial goal was just to make a few bucks, they said in interviews. But then they realized that matching bed & breakfasts with customers could be a goldmine. They put together a website, but continued to struggle to find people to use their platform. So the San Francisco-based company decided to target Craigslist. AirBnB offered homeowners the ability to automatically post on Craigslist in the beginning, during the MVP phase, reaching many potential users.

The rest is history. Today, AirBnB is a critical player in the vacation market, has giant revenues, at the time of writing quarterly revenues in Q2 2019 of more than US $1 billion. This shows: Those who prove through initial testing that their product idea or service is marketable will profit handsomely! The key is that an MVP can minimize the risk of taking a beating when entering the market. Simply because the idea has already been tested on a small scale.

MVP's are just the beginning!

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Types of Minimum Viable Products

There are different types in the implementation and design of the MVP approach, which we would like to introduce to you.

1. Concierge MVP

2. Wizard of Oz MVP

3. Landing Page MVP

4. Email MVP

But how do these Minimal Viable Products differ?

Concierge MVP

Concierge MVPs involve manually assisting your users in achieving their goals, verifying that they have a need for what you offer. Building a product isn’t even necessary.

Manuel Rosso is CEO of Food on the Table, a product that specializes in creating shopping lists tailored to an individual’s needs and preferences. Manuel didn’t even have a product or website in the beginning. He sold the service to customers in person for $10 a month, and then created the recipes and shopping lists for them personally as he walked them through the store.

Wizard of Oz MVP

This MVP gives a certain impression of your solution from the outside, but the inner workings of the solution are actually something else. Sometimes Wizard of Oz is also referred to as “Mechanical Turk”.

One good example of this is Aadvark, the Q&A service that routed questions to other users who were experts (via instant messaging routing). In the early days, Aadvark staff just manually sent questions to everyone who was online to see who would answer, and then manually sent that answer back to the questioner. There was no algorithm. So the beginnings of Aadvark was a Wizard of Oz MVP. The product was later built to include an algorithm and functionality to match.

From the outside, this MVP looked like a fully functional system, but all the tasks that automated systems should have done were done by a human who first validated the idea and its functionality.

Landing Page MVP

A landing page is a single page that describes your product or service, delivers benefits and the unique value proposition. In the best case, it contains a single call-to-action button to clearly identify the visitor’s response.

Joel Gascoigne of Buffer tested the concept for his product on a landing page that would automate posting to social media at the optimal time. Joel reached 120 registrations and addressed 50 of these people directly.

This is where it became apparent that customer interviews needed to go hand in hand with a smart marketing approach to the landing page. Joel picked up the phone to learn more about what customers loved about his value proposition. Joel had a paying customer from that list a few days after launching his product. So it goes to show: a certain agility and smart, expeditious approach pays off!

Email MVP

Creating an email is much easier than creating a product or a feature in a product. So, if you have access to an existing customer base, you can first create some emails manually to see how the response to a possible solution idea is. If it’s positive, you can proceed with creating the associated product features.

If you see that most people open the email but don’t click on the call-to-action, you can conclude that the value proposition is not attractive.

Interestingly, Ryan Hoover of Product Hunt started by emailing his idea to a list of people. After receiving enthusiastic feedback, he knew the idea was worth pursuing.

Customer-centric development yields deep insights about your customers

The MVP does not only help you and your company develop new products or features that are designed with customers. Rather, you will be able to get to know existing or new customers more intensively in a pragmatic way.

Very helpful for MVP development and going much deeper into organizational development is the excellent book by Salim Ismael called Exponential Organizations: The Engineering Principle for Transforming Organizations in the Information Age. Highly recommended.

FAQ - Further information on Minimum Viable Products

Where does the MVP originate?

The term Minimum Viable Product was pioneered by Frank Robinson in 2001 and used in subsequent years by Eric Ries, a student, and Steve Blank, customer development enthusiast and lecturer at Yale University. The term is an essential element of the Lean Startup methodology.

Find more about Customer Development here.

What is an MVP?

An MVP (Minimum Viable Product) is a streamlined and very minimal product that fulfills a customer benefit, at least to a certain extent. This allows it to be tested as early as possible on the market with and on its customers, and the product to be further developed continuously and step-by-step on the basis of customer feedback. This includes trying out ideas, developing them further and, under certain circumstances, discarding them.

An MVP could also be described as the intersection between a “raw product without customer benefit” and a “highly usable product, but with enormous effort and costs”.

What are the benefits on an MVP?

Clearness and understanding of whether there is a market for a product, new product feature, or business idea
Rapid response (customer feedback) to changing needs in the market – uncensored truth
Minimizing risk in product development and thus avoiding unnecessary costs and resources (personnel for example)
Verification of own assumptions and hypotheses by early feedback from the customer. A hypothesis only remains a hypothesis for a short time until it is validated or rejected by customer feedback as quickly as possible.
Customer-centric product development; product solves a problem / problems of the customer
Increasing customer loyalty, gaining advocates and networkers through beta testing programs.

Where does the MVP approach come from?

An MVP or MFP (a minimum viable product) comes from Lean Startup, developed by Eric Ries.

What is the main goal of MVPs?

With a Minimum Viable Product, the aim is not to create a product with few functions, an aesthetically pleasing design or advantages, but to find out as much as possible about the product and the potential product users (customers) with a minimum of effort. In this way, it is possible to act more quickly and to be as well positioned as possible at the time of market launch.

The challenge is to define the “minimum” in such a way that the product is still usable, i.e. “viable”, and thus delivers an initial benefit to customers. Customer feedback is elementary for further development. Without customer feedback, companies run the risk of developing products based solely on assumptions and possibly even gut feelings and personal sensitivities of the founders/entrepreneurs and thus bypassing the market. In other words, a product that nobody needs.