Being a business owner, you must have heard these words a number of times. And you have understood by now that they are more than just buzzwords. They are biz words.
Innovation is the fuel that drives any business idea. But the realization of an idea is always backed by certain factors that include time, effort, risk and money. It all depends on how amazingly you create a go-to-market strategy for your app idea.
One of the essential components of a tangible idea for sure is its market validation and sale-worthiness. And there can be nothing better than MVP (Minimum Viable Product) to validate your app idea.
What is a Minimum Viable Product (MVP)
An MVP has much greater penetrability when it comes to doing business. It is about carefully analyzing the demands of your target market and building a real, workable product with core functionalities that can help estimate its viability in the consumer market.
How is the viability factor integral to risk mitigation for MVP
Startups are often idea-rich but short of funds. To pave their way toward attracting investments, the viability of the idea needs to showcased. It has been observed many times that businesses burn their pockets and time building on an idea without assessing the ROI. If it works that is wonderful, but if it doesn’t the loss can be irreparable.
Minimum viable product (MVP)is a cost-effective and proven way to minimize cost, as well as the risk involved. This is possible because MVP unlike other app idea realization processes like Proof of Concept or Prototype, revolves around the functional realization of the product (app) idea. MVP in simple terms can be called a ‘working model’ of your final product with all the essential features integrated into it.
Are you ready?
Building a successful MVP for your app idea is based on how well you chafe out the ‘need’ from the ‘wants’ of your target buyer persona. For a limited, low-cost MVP project, you can only focus on the core essentials – features and functionalities – that is a must-have for a product of that category.
Once your MVP is built and out in the public domain for validation (a crowdfunding site is a great podium to estimate validation as well as garner funds), it is crucial to deeply analyze every response and work on improving the critical aspects without any qualms. An MVP tells you what improvements to start working on next, so as to decrease the risks of failure to the minimum:
- What new features to be added
- What changes to be made to the initial ones if the feedback isn’t positive.
Remember, this is one of the most dominating reasons why startups build MVP, i.e. to showcase the potential investors about the viability of their idea and demonstrate their team’s capability to transform the idea into a product-in-demand.
Ascertaining the cost of your MVP
While you brace up to imbibe the conventional startup MVP strategy that starts with ideation to initial funding – from MVP launch to market validation, and then more investments here is an insight into how the cost of a minimum viable product can be ascertained. One of the proven methods is using the Product Definition & Product Identification Framework.
Product definition framework
Take the instance of a Travel App MVP that will help execute essential requirements that a travel application cannot function without:
Search feature for flights/hotels/locations, travel booking, geolocation tracking, payment gateway, reviews and ratings, etc.
Product identification framework
Here you can see the features that are proposed to be used in the final version of the travel app development:
- User id/social media login
- Search feature for locations (country, city, place)
- Geolocation tracking
- Search feature for hotels
- Search feature for flight
- Booking services – Hotel and Flight
- Manage deals and discounts
- Review and rating
- Location-based emergency services
- Taxi app integration
- Payment gateway
- Travel itinerary generator
- In-app language translator
- Currency convertor
- World clock time converter
I’m sure the array of additions in the final product version gives a clear picture why the cost of investments is higher in the latter (and so is the risk, if the idea isn’t validated). While a travel application development will cost broadly between $50,000 and $85,000, an MVP for travel will cost you roughly around $5000 to $10,000.
Ask yourself three questions before you build an MVP
While businesses are open to invest in building applications like travel apps, healthcare app or ecommerce application that are quite a rage at the app stores, the concept of MVP has its unique role in minimizing the ‘risk quotient’ while validating the prospects of a successful product. So, once you decide to build an MVP for your app idea, it’s time to ask yourself the right questions.
1. Is your app idea and your effort to drive attention worth the risk?
While your intention here is to assess the market response towards your application, different people will have their own assumptions.
For those who are not very sure about the credibility of their product idea, can be found to even go ahead with a webpage showcasing the product idea, its benefits, etc. along with a sign-up form for a mailing list. Here they may consider the sign-ups as validations of interest in their product idea.
But you can do much better by building a minimal ‘working model’ application and share it in communities and crowdfunding sites to get a broader data and feedback, that will help assess the demand and facilitate garnering funds to build a viable full-featured product.
2. Are you sure about the conviction of your MVP supporters that they’ll retain?
Most of you are aware of the ‘freemium model’ in mobile apps and the huge popularity it enjoys. They are very similar to the trial versions of web apps. While they provide partial functionality for free and comes with a price to pay for premium functionality, what matters is how many of your customers (who have given their nod for MVP as a freemium product) will choose to stick around when it moves into the premium payable mode.
This calls for your final product to comprise of highly intriguing and useful features, besides a less expensive price tag. After all the success of your MVP relies on good adoption and retention as well.
3. Will your customers be ready to pay for your set ‘product price tag’?
Once the stage is all set for the launch of your product, it’s time to gauge the financial feasibility of your product. Will consumers be ready to pay by the price tag? How to ascertain the optimum price?
‘Minimum’ is a moving target. Because, some of the features you integrate into the final product specifications may come with deeper investments like payment gateway, app security, credit card processor, etc. – leading to cost escalation at times.
Over to you…
It is only your users who can define what features your MVP lacks, and what features are not needed. So, the validation of your app idea and success can only be possible by carefully analyzing the feedbacks and improvising on your application and test.
In short, MVP success is determined by a cycle of BUILD – TEST – LEARN, BUILD – TEST – LEARN again – stressing on the benefits of building, measuring and learning when launching your minimum viable product.
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