The minds of Eric Reis and Steve Blank introduced the entrepreneur community to ideas such as the build → measure → learn loop and the MVP (Minimum Viable Product). At Initprise, we employ these and other methodologies designed to reduce risk with every deliverable.
So, what is an MVP?
An MVP is an experiment. It reduces risks and increases value. It is the simplest tool capable of proving a hypothesis. It is not only the earliest form of your product. But, it is also a landing page, an email campaign, an article, a manual process, a phone call, and anything else that can produce actionable insight.
The fundamental elements of an MVP are:
- Hypothesis | idea | guess
- Collection method | Filter | Experiment Design
- Pass/fail criteria
Start with your hypothesis: “Nonprofit leaders have a problem acquiring recurring donations”.
Design the experiment: Contact and interview at least 10 nonprofit executives found on LinkedIn. Create an open-ended customer interview script designed to identify their top 3 problems that they want to be solved.
Define pass/fail criteria: >50% of interviewed nonprofit executives identify acquiring monthly recurring revenue as one of their top 3 problems.
If the experiment validates the assumption, you proceed. If not, then you update your business model with the new insights and try again. If you’re lucky, your experiment unveiled an idea that did pass the exit criteria.
Famous (Successful) Examples of Simple MVPs
Dropbox’s MVP was a video explaining how their product would work; they had not written a single line of code.
Building the first version of Dropbox may have taken months or years at a cost of hundreds of thousands of dollars or more. This explanation video gave them the validation they needed in a fraction of the time and at a fraction of the cost.
The founders of Airbnb needed to prove that people were willing to pay to stay at someone else’s house (or to share a home with its owner). To test this idea, they listed their own apartment on a simple website.
Airbnb went a little further than may have been necessary by building their own website to post their apartment, but it was still much faster, cheaper, and less risky than building the platform that they have today.
The founders of Zappos needed to prove that people would buy shoes online. They took pictures of shoes at local stores and uploaded them on their website. When someone purchased a pair of shoes, they would go back to the store, buy them, and ship them out.
Zappos launched in 1999, well before purchasing clothing was common online. By using a manual process as an MVP they were able to validate an idea before having to spend hundreds of thousands or millions of dollars on inventory and warehousing.
A filter for bad ideas
Dropbox, Airbnb, and Zappos are examples of successful MVPs. But, for every validated MVP, there are (or should have been) plenty of examples that catch bad ideas.
One famous story is Webvan, a company that raised $400M to build a product that nobody wanted. They were bankrupt within 3 years. Webvan could have validated their idea, much like Zappos, without spending millions on trucks and warehouses.
The MVP doesn’t exist to validate good ideas (validation doesn’t create a good idea). Instead, the MVP exists to help catch bad ideas before they create years of unnecessary stress.