Vamstar and Tapcheck raise venture capital funding
The goal of the MVP
One of the main reasons startups fail is because the founders design their initial product based on assumptions. As an entrepreneur, you don’t want to spend a huge amount of time, effort, and money on a product that the market might not even want.
Quibi – yes, that Quibi – is a prime example. After spending over $63 million, Quibi never quite found its footing among TikTok, YouTube and its many streaming rivals. The company never launched an MVP or an experimental public beta to test the kind of content and features that resonated well with audiences, and simply built a product that no one wanted or needed. After raising $1.75 billion in venture capital, the company shut down less than a year after its initial launch. That’s why it’s so important to start with an MVP.
How to build an MVP
By definition, a minimum viable product is one with enough functionality to attract early adopters and validate a product idea early in the development cycle. It allows founders to collect the maximum feedback from users with the least amount of effort. When creating an MVP, you should keep the following in mind:
– Answer the right question. It is important to determine what your central hypothesis is. When Airbnb’s founders wanted to see if they had a viable idea, they didn’t rent space or buy new beds. They simply tested the question “Will strangers pay to stay in my apartment?” by offering a free hosting experience in their living room with the promise of networking with like-minded people.
– Decide which metrics are important. Identify what will define the success of your product. Common MVP metrics include churn, cost of customer acquisition, average revenue per user, and lifetime value of a customer. However, the data collected should include qualitative and quantitative information about how your product is used and what customers actually think about it.
– Actively measure what you test. It is important to continuously test, measure and learn until the product is finalized.
– Build in-house if possible. It is easier to address internal needs and challenges first. For example, the original Twitter prototype was designed for internal users of Odeo (now closed) to send messages to other employees and view them at the group level. After initial internal testing and positive feedback, Twitter launched publicly in 2006.
– Do things that don’t fit. At this early stage, you have nothing to lose. Create a great experience for initial users and meet their needs. Go the extra mile while continuing to gain confidence. Talk to every user and every customer, and do things that will never change when the business grows. For example, Yelp founder Jeremy Stoppelman went to every bar in San Francisco to introduce them to Yelp at the start.
Not great but good enough
When Zillow launched in 2006, we had to decide on enough quality for launch. The first version of the product had Zestimates in 40 million households with a margin of error of around 12%. At launch, we knew Zestimates weren’t going to be entirely accurate, and we just wanted to see how Americans would react if they could see the ratings and home information publicly.
We actually delayed the launch of Zillow for about two months to keep consumers from getting angry and upset. We spent that time creating an additional feature called My Estimate that allowed users to edit their home estimates with information Zillow didn’t have, such as for things like remodeling or significant square footage changes. . We were concerned that people wouldn’t be happy if the estimate was incorrect and there was nothing they could do about it, so we waited. It was a tough decision to push back the launch, but it was worth it in the long run. When we found that balance between our MVP and V1, we knew it didn’t need to be awesome, just good enough to attract users. Today, 15 years later, Zillow has over 100 million households with a margin of error of around 3%, and the product is much more advanced.
Take away key
The key takeaway here is that MVP allows organizations to start small and slowly scale to the best version of their product. When Hotwire started, we started by selling airline tickets from a few carriers. Later, we expanded to include more airlines, additional flight options, and eventually hotels, rental cars, and cruises. But the first MVP was as stripped down as possible. See below for Hotwire’s 2000 beta site. About as simple as it gets.
A Hotwire MVP sold airline tickets from only a few carriers.Image by Hotwire
From articles on your site
Related articles on the web