Areas of application of MVP techniques
An MVP can basically represent a product, a service, an idea or a concept for the development and marketing of innovations.
Business models or economic assumptions can also be verified in this way.
Depending on the industry, domain and type, an MVP can be a prototype, mockup, beta, pattern or schema, smoke test, or business model canvas (dynamic working document).
Carrier systems are mostly landing pages or online platforms.
Minimal Viable Products can be found in system, software and product development, in basic research and in applied research, in project management and marketing, in digital transformation and in agile product development.
The classic case of MVP use in the software industry is represented by so-called freemium models (a neologism of “free” and “premium”), in which a basic model with a limited range of functions is initially offered as freeware (MVP) and this is then supplemented by a paid premium variant with extended functionalities (end product) is replaced.
But minimum viable product strategies can also be found in the adult education sector.
For example, the description of a seminar as an MVP explores the interest of potential customers in order to be able to respond with a suitable training offer (final product).
Why are minimum viable products particularly attractive for start-ups?
The fact that start-ups in particular are known to be MVP-affine is due to the special situation in which founding companies find themselves.
For example, start-ups often do no or only insufficient research to determine the market fitness of their own product, since the founding team is so convinced of their own business idea that market research and needs analyzes are not considered necessary.
If it turns out during the product launch that the market is not interested in the innovation, it’s too late.
It is not possible for many start-ups to put up with such a – not least financial – setback in the sensitive start-up phase and simply continue.
Such scenarios can be avoided by launching an MVP, according to businesspally experts.
Why start-ups often fail?
The road to self-employment is paved with a number of stumbling blocks.
So it is often uncertain whether
- The capitalization is sufficient
- The nature and scope of the market correspond to the assumed circumstances
- There is a concrete and sustained need for the product/service
- The created calculation reflects the market economy reality in all areas
- Product manufacture and market launch can be realized with justifiable use of resources
In addition, there is a behavior of investors characterized by conservatism and distrust.
For example, by requesting the submission of a business plan, which not only has to contain a perfect entrepreneurial strategy and the results of comprehensive market research and needs assessment, but also has to have dynamic risk management that takes into account all imponderable imponderables of market entry and in each case has an adequate countermeasure ready.
Such business concepts should be valid for a period of several years, which in view of constantly changing market conditions is an impossibility even for established players!
Under the given circumstances, start-up companies are therefore forced to use capital resources rationally and effectively and to achieve attractive sales as quickly as possible.
Which increases the pressure to save on development time and to launch the mature product as soon as possible.
Here, too, an MVP provides support, since investors and stakeholders can present the first results in the early phase of final market maturity.
Conclusion
Minimum viable products are designed to test the market opportunities of an innovation with little effort.
The insights gained through the launch of a basic model with a greatly reduced range of functions and the related customer feedback have a trend-setting influence on further product development, so that extensive compliance of the end product with the needs and wishes of the target group is guaranteed.
