In a previous article titled why your business idea isn’t getting funding one of the reasons I highlighted was that you’re not operating. If this is you and you haven’t yet started the best advice to you is to start where you are, with what you have. Before you label me a motivational speaker I’m talking about a very practical business concept known as the Minimum Viable Product (MVP). Building the perfect product is difficult, doing it the first time is damn near impossible. The MVP as a concept is meant to help you start doing business with your customers and getting the much-needed proof of concept that lenders and investors love.
Minimum Viable Product
So you’ve got a wonderful idea for your product and all the bells and whistles it’ll have but you can’t finance this lovely product yet. This can happen when you’re dealing with physical goods or services. The minimum viable product is a bare-bones version of your product, what you can offer customers now to get you in the door, in the business. Business is many things but at its core, it’s all about satisfying a customer; no customer no business.
Advantages of the MVP
The MVP concept has many advantages when applied and you would be surprised how many times you have come across it
Gets you in action
I’ve already highlighted how the MVP gets you in action and this is its biggest advantage. Say your vision is an app that provides contacts of tradespeople (plumbers, carpenters, contractors and so on) but you’ve seen the quotes for app development and you think those people need Jesus. Your MVP could be a simple website based listing/directory or even a WhatsApp based group that connects people with tradespeople. This not only gets you in the door and dealing with customers. It also gives you a proof of concept. If you can reach 100 or 1000 customers on your platform it’s going to be hard to argue with your idea thereafter. But there’s more…
Start learning customer behaviour
I can guarantee you that for every business idea out there customer behaviour is the hardest thing to accurately anticipate. Your business, however, will survive and thrive based on the ability to read customer behaviour in a market. Many businesses have been built around solving problems that don’t exist or aren’t worth solving. The market is your guide. I’ve been involved with many businesses where we anticipated customer behaviour to go one way but customers begged to differ. With their wallets. Here’s the thing, the MVP helps you find out such problems before you’ve invested a truckload (of someone else’s) money into your product.
For the startup or new business you also badly need customer feedback. It is closely related to customer behaviour but getting the opinions of 100 people who did not invest in your product is not worth the same as the opinion of 1 person who did. Customer feedback is key to product development and it will help you fine-tune your product going forward.
I will not dwell much on this point. You’re looking for funding, customers buying your MVP give you money.
The MVP concept is great but there are some things to watch out for.
Not viable in every business
If you’re operating in a heavily regulated industry then you may not be able for legal reasons to introduce an MVP. Industries like medicine, insurance, finance may restrict how low you can go with your MVP.
Can be trapped
Your MVP is your first product but must by no means become your last. The idea is to create a product that is just good enough to get you into the market and in motion. You will iterate on it and improve as you go along. Adding features as you gain the capacity and insight to do so.
How to create an MVP
Creating an MVP is not a difficult process. You have your product idea and maybe even a prototype. What you need to do is firstly analyse your problem, the problem your product solves. Isolate the primary problem and the feature that addresses the primary problem. Strip the product of everything else that can be done without. The idea is to bring product cost down or to improve the ease of delivery. Focusing on a key benefit and the feature that brings that benefit. Back to our tradespeople listing example, you can identify the major benefit as finding tradespeople and that can be done over WhatsApp or other social media. Concepts like finding the ones near you or who accept payment via One Money are additional features that can be built into the product later.
If you look at the history of any business long enough you start to see a MVP was somewhere in their history. Think Econet introducing prepaid through Buddie back in 1998 or Telecel introducing their Mango handset. Fresh in a box today offers a variety of items including meat, alcohol and other grocery items but those first 10 boxes had nothing but farm-fresh vegetables in them. I’ve seen a few food places take off in Zimbabwe based on their lovely chips or sadza and slowly grow their menus. Runners who facilitate grocery shopping from South Africa tend to start focusing on a category such as dry goods, clothes or toiletries and then expand their offering. This is all MVP thinking at work.
This concept may not work for every single business idea. But even your 100 000 chicken project can start with just 50 chickens as a MVP.