And how-to get yours to market
What Is A MVP?
AirBnb started off as three inflatable mattresses on the floor of a loft apartment in San Francisco. It was a light-bulb moment – making $240 when hotels were full showed there was market potential. This idea was quickly fleshed out and tested in the market, then scaled up once they had their proof of concept.
That was their MVP: their ‘Minimum Viable Product’.
A light-weight, early version of a product (or service) with just enough features to be usable by early customers, but whose primary purpose is to provide feedback for future product development.
“Ah, you mean, like a prototype?”
A prototype (or pre-MVP) demonstrates the concept: the core feature and how it solves a problem. In Tech, these can be as basic as a few sketches or some clickable screens with no functionality.
In essence, a prototype is the foundation of what will become the MVP.
What’s expected from an MVP is an investment, not clients. It is built to test with early adopters and then attract the investment needed to progress it to the next stage along the development path.
” The Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort. ”
– Eric Reis
So what happens then?
The Path To Market
Prototype (or Pre-MVP)
Time = 2 – 4 Weeks.
Path = Funding → Prototype (or Pre-MVP) + Investment → [Stage 2]
- To build a prototype costs £5,000-£10,000, this is either bootstrapped or self-funded.
- Funding can be gained from friends and family, a network of angel investors or an investing company.
- Prototypes demonstrate the basic idea as a design and include the basic flow of an application or system; the primary feature (1) + (max 2) secondary features, and why these solve a real market need.
- The aim is to build these as cheaply as possible, but the cost is dependent on the complexity.
- If it is validated to fulfil a real market need, you could get more funding to build an MVP.
Minimal Viable Product (MVP)
Time = ~1 year
Path = MVP + Market Research + Traction + Investment→ [Stage 3]
- To build the tech for an MVP usually costs between £10,000-£30,000.
- Its purpose is to test the basic core features with early customers (early adopters).
- It should take ~ 3 months to validate the MVP with early adopters.
- It can then take up to ~ 1 year to fully develop the software for a complete MVP.
- An MVP helps to secure basic use-cases, gather market research and attracts additional early adopters.
- If there is exponential growth in your user-base (traction), you could secure more funding to develop a Minimal Marketable Product (MMP).
- You’ll likely need an MVP to approach Venture Capitalists (VCs) for further funding. Although this depends on the project – there are some VCs that look at early-stage startups.
Note: Calculate around £50,000 total as a startup budget. This factors two peoples salaries, the cost to build the software and a small marketing budget.
Minimal Marketable Product (MMP)
Time = ~ 1 -2 Years
Path =MMP + Traction + Re-Investment or Investment + Scale → [Stage 4]
- To build a software MMP, an investment of around £200,000-£400,000 is needed.
- To build a hardware MMP costs can exceed £1,000,000.
- The purpose is to build and launch a marketable product.
- Costs are usually split 40% Development : 60% Business Strategy & Marketing.
- It takes around 1-2 years (max) to fully develop the software for a MMP.
- An MMP allows you to attract more users which proves you have more traction.
- Growth in the user-base and feedback combined provides leverage to attract further investment. This is in order to move onto Stage 4, building a Minimum Loveable Product.
- If your MMP has traction and is promising, you can attract more investment to move onto the next step; building a Minimal Loveable Product.
Minimum Lovable Product (MLP)
Time = 3-5 years after you launched a Start-up.
Path = MLP → Financial Gain.
- A MLP costs between £500,000 – £2,000,0000.
- Costs should be split 30% Development : 70% Business Strategy & Marketing.
- Also know as a Minimal Desirable Product.
- Reaches the market in a final state which is very desirable to the user base, that is; it fulfils their needs in a niche way and solves their problem/s.
It’s not cheap and it’s not easy but it is what works. And it works because everything scales-up organically, when it’s ready; from concept to execution, to that final loveable product.
Try to skip a step or skimp and you may find yourself joining the 90% of start-ups that fail every year. This leads me nicely to…
Why Most Start-ups Fail
- NOT DRIVEN BY REAL NEED.
Without establishing a real need you have nothing. It makes perfect sense, doesn’t it? No market = no viable product. But too many start-ups have all the conviction and not enough of the research to back it up. Married to their own ideas, they compound their mistake by not listening to outside advice or the ideas that really matter: those of the customer. The lesson always sinks in eventually. Painfully. Expensively.
- NOT ENOUGH MONEY.
Starting up prematurely with a bit of money and a bright idea, while not realising the financial reality needed to fully-realise that bright idea is a really common mistake. Usually, startups burn through their cash before they get anywhere near a position worthy of substantial outside investment.
- NOT EXPERIENCED ENOUGH.
This is a bit of a Catch 22 as, of course, you need a chance to get that experience. But this is why previous failures are not a turn-off for venture capitalists- in fact, it shows you know the processes, what is required, and the bumps in the road before you get there. Precious knowledge that informs future success.
- CHOOSING THE WRONG TECH PARTNERS.
Following on from the previous two, inexperienced or under-funded start-ups are easily seduced by low price development. These offers are almost always too good to be true. Unfortunately, most find that out the expensive way – they were right to be wary. The old maxim ‘buy cheap and pay twice’ has never been more true. From costs creeping up when it’s too late to back-out to needing a complete audit at the end and extra work to fulfil basic requirements. Added to the associated issues with any language barriers or time zones, I’ve seen so many potentially successful start-ups make this fatal mistake.
- LACK OF CLARITY/PROPER DOCUMENTATION.
Fuzzy ideas that are not mapped out clearly enough to ensure everyone is on the same page. A big no. Proper documentation removes ambiguity – everyone knows exactly what they should be doing and when. Clarity of process and accountability is another stumbling block that causes major arguments.
Overall weak preparation, weak management, and lack of a proper process easily scare off investors. They also are the primary reasons that many Start-ups give up!
“Those who cannot remember the past are condemned to repeat it.”
– George Santayana
We have collaborated with dozens of successful start-ups and the same fundamentals are always in place: real need, proper funding, experience, the right tech partner and proper business and development documentation.
These factors drive success.
Discover why and how in this free download: ‘12 Rules For A Dynamic Tech Partnership‘
Best Practice For Start-Ups
#1 Their Innovative Idea Solved A Real Market Need.
Without a real market need you have nothing. A point worth repeating.
#2 They Focussed On One Main feature, With A Maximum Of Two Sub-Features.
They didn’t dilute their efforts and distract the customer. More features at an early stage in the process actually detract from the value of a product by diluting your focus and effort. Some modern design and sleek screens, flows and drawings help, but it’s really about the user experience: it needs to be a simple, intuitive solution that solves the problem that hurts the most.
#3 They Chose The Right Team
Great start-ups know that they need to compensate for gaps in their experience. Choosing experienced mentors and collaborators who have navigated the choppy waters of startup territory, ensures valuable insights and guidance for any inexperienced team. These mentors have made the common mistakes already.
#4 They Followed The Well-trodden Path To Market (above):
Their team moved through the product development stages as planned, and only when they were ready and funded.
Nothing is guaranteed in business or in life, but if you heed these lessons you can at least set yourself up for the best chance of success.
You can’t win the race at the start, but you can lose it.
(1) Prototype → (2) MVP → (3) MMP → (4) MLP.
1. Pre-MVP AKA Prototype
- Basic design and flow of an application or system; a primary feature (1) + secondary feature (1-2 Max), and why these solve a real market need.
- Proof of concept.
- Gain investment to move to MVP.
2. Minimal Viable Product (MVP)
- Built with investment from the final Prototype.
- Basic use cases, consumer research addressing that problem, basic validation of your idea with data.
- Yields validated learning.
- Further validates concept.
- If it gains traction (exponential early adoption), you are on track to secure more investment to build an MMP.
3. Minimal Marketable Product (MMP)
- Built with investment gained from the final MVP.
- A scaled iteration of your MVP.
- It has more business strategy and features, which are complemented with a real marketing and sales push.
- It incorporates more information and insights from users.
- Must see more traction to gain funding for an MDP.
4. Minimal Loveable Product (MLP)
- Built with investment from the final MMP.
- MLP’s are also known as minimal loveable products (MLPs).
- The overall goal: a launched, successful product which can generate revenue for your business.
- It addresses the market need and fulfils your company’s vision.
- The focus is all about scaling the solution to reach as many users as possible.
Founder, Creative Stack.