Build an MVP during recession

One of the most important principles in startups today revolves around the idea of a Minimum Viable Product, or MVP. No business wants to spend money on a product only to discover that it has no market. An MVP is the answer to innovative product development.

Today’s most successful unicorn startups like Uber, Airbnb and Slack have been founded during the economic downturn — why shouldn’t yours? Because, experienced product creators say that the recession is not the reason to give up your startup launch.

What is an MVP (Minimum Viable Product)?

An MVP (Minimum viable product) is a basic, launchable version of the product that supports minimal yet must-have features (which define its value proposition). It is built with the intent to enable faster time to market, attract early adopters, and achieve product-market fit from early on.

The MVP concept is perceived as a combination of the “minimum essentials” – something that has the basic features to satisfy the initial customers. The follow-up involves taking feedback that will help for future product development.

It is common that during a recession, founders and entrepreneurs may have the feeling that the current situation is a red flag to keep moving things forward. But they must try to find opportunities in the current crisis and double their efforts by taking inspiration from these great brands. One such effective tip to raise funds for business during a recession is to build a strong product.

Investors can’t decide whether to fund your new product unless you have a working version of it, which is called an MVP. When starting a new business, you can fail. But it is not the end of the world!

An MVP can be a great tool for eliminating the risk of product failure and doubling your chances of success. All you need to do is build a strong MVP that will allow investors to see how your product can solve real problems.

Examples of Successful MVPs That Evolved

Some of the world’s most successful businesses started as MVPs. These companies didn’t spend years perfecting their products before releasing them to the market. No, they launched with 1/10 of the functionality they have today.

Here are a handful of successful MVPs that evolved into household names:

Facebook: Facebook launched as a small social network for college students to stay connected. You could search for friends (and friends’ friends) and chat with them, but that was about it. Now, Facebook has Groups, Marketplace, Watch, Ads, and live streaming.

Dropbox: Dropbox had thousands of customers ready to pay before even having a product. Drew Houston, the cofounder of Dropbox, released a video explaining the concept behind Dropbox. In a single night, Houston reached 75,000 early adopters. When the team launched the real-deal product, they generated 1 million active users in under 10 months.

Amazon: Amazon humbly launched as an online bookstore. The website was pretty simple, and the company didn’t have any of the winning features it has today: cheap prices, fast shipping, and a vast product section. However, selling books online worked out pretty well—enough for Jeff Bezos to expand the business and eventually build the world’s largest retailer (outside of China).

Examples of Businesses That Epically Failed Because They Didn’t Use MVPs

Apart from the inspirational examples of MVPs that went well, there is another side of the coin: companies that failed epically because they didn’t use MVPs.

Snapchat Spectacles: Only 0.08% of Snapchat’s users bought its camera sunglasses. Of those who bought it, less than 50% kept using Spectacles after the first month. Customers didn’t really need a camera on their face—not one that only worked with the Snapchat app, at least. Snap fell for the “great idea” feedback rather than actually testing to see if their market wanted this product.

New Coke: Nobody had any issues with the original Coke formula, but Coca-Cola wanted to compete with Pepsi’s flavor—so they released New Coke. Coke lovers despaired, enough so that Coke had to ditch the idea and return to the old recipe. Coke even had to apologize to its die-hard fans.

Google+: Google built Google+ to retain its user base, which was going to Facebook and Twitter for their social networking needs. However, Google+ didn’t offer anything new, and it just looked like a bland version of Facebook. Google users didn’t ask for it, and they didn’t adopt it, either. Google+ is now nowhere, it is extinct.

How to Build a Minimum Viable Product?

American entrepreneur Reid Hoffman once said:

“If you are not embarrassed by your first product, you launched too late”.

However, Hoffman’s words led many startup founders, especially first-time entrepreneurs, to focus mainly on ‘M’ and almost ignore ‘V.’ It resulted in below-average products rather than excellent ones.

For instance, startups develop a free sub-domain website with practically no content and call it a startup. When it fails to attract users, they call it a failed MVP and start looking for a solution to the so-called MVP problem.

The real issue lies in the lack of understanding of the steps involved in MVP development. It is necessary to follow all the steps to build an MVP successfully:

Step 1: Start with Market Research

At times, ideas will not fit the market needs. Before a business initiates an idea and embarks upon an MVP Development process, it should ensure that it fulfills the target users’ needs. Any business would gain by conducting surveys. The more information a business has, the higher the chances of success. Also, do not forget to keep an eye on what the competitors offer and how the product idea can stand out.

“It is not enough to do your best; you must know what to do and then do your best.” – W. Edwards Deming

A survey conducted by CB Insights revealed that the number one reason for a startup’s failure was a ‘lack of market need.’ If the product doesn’t nail the problem, customers won’t go along with it to find a solution.

Step 2: Ideate on Value Addition

What value does the new product offer its users? How can it benefit them? Why would they buy the product? The answers to these questions can help define the app’s value proposition.

It should also be clear what the essential estimations are for the product. As MVP implies, the product has to introduce value to the people in its most basic state. Begin by outlining the users and build the MVP based on their needs.

Step 3: Map Out User Flow

The design process is a vital MVP stage. Hence, you must design the app in a way that is convenient for users. The business needs to look at the app from the users’ perspective, starting from opening the app to the final process, such as making a purchase or delivery. In addition, user flow is important because it ensures nothing will be missed while keeping future product and user satisfaction in mind.

Defining the user flow is necessary to determine the process stages. It is essential to explain the steps needed to reach the main objective. The focus should be on basic tasks such as finding and buying the product or managing and receiving orders rather than features.

These are the goals that the end-users will have while using the product. When each of these procedure stages is laid out, it is time to define the features of each step.

Step 4: Prioritize MVP Features

At this stage, prioritize all the features that the MVP will support. To prioritize the MVP features, ask questions such as: What do the users want? Is this product offering them something beneficial?

Next, categorize all the remaining MVP features based on high priority, medium priority, and low priority. Another essential step is to arrange these features in the product backlog (priority-wise). It is time to begin building an MVP. If a business wants to see how its future product will look, it can create an MVP prototype.

Fun Fact: Steve Jobs was out of his job because of avoiding the stage of prototyping while building the Apple Lisa. The result was a disaster as it failed to achieve a good number of sales.

Step 5: Launch MVP

Once a business has decided upon the main features and learned about the market needs, it can create the MVP. Remember that an MVP is not lower quality than a final product but still needs to fulfill the customer’s needs. Therefore, it must be easy to use, engaging, and suitable for the users.

“The main reason why products fail is that they don’t meet customers’ needs in a way that is better than other alternatives”. – Dan Olsen, author of The Lean Product Playbook

Step 6: Exercise ‘B.M.L.’ — Build, Measure, Learn

Everything is part of a process: first, define the scope of work, then move the product to the development stage. After the product development phase, the product must be tested. The first testing stage is carried out by Quality Assurance engineers who work to improve the product’s quality (even if the product is not yet released).

After launching the MVP, go over everything again. The company must get feedback from its clients on the release. They can determine the acceptance and competitiveness of their goods in the market based on their comments.