Why A Startup Should Seek The Minimal Viable Product (MVP)
At the beginning of every startup is some kind of product or service idea. For example, it may be inspired by a quirky observation made by a founder one day on the way to work. It could also be created by an engineer who realizes a niche and decides to head out on their own in order to develop this new tool. The new product or service may also be the product of a brainstorming session meant to create ideas for submission to an incubator like Y Combinator. Wherever the idea comes from, it is at the heart of a startup and there is no way a nonviable idea is going to gain traction on the market.
There is no exact science to choosing a product for a startup, but there is an idea laid forth by author Eric Ries in his book The Lean Startup called the Minimal Viable Product (MVP). An MVP is not like products released by an established company. Take for example the iPad or a new flavor of Coke. Both of these product releases will be preceded with likely millions of dollars’ worth of market research, massive ad campaigns, focus groups and any other expense that can be made by the vendor to make sure that the product is a success. Of course, sometimes a major product release fails, for instance Crystal Pepsi, however a large company can absorb these types of losses and survive. A startup has neither the time to wait to get a product onto market with high levels of certainty about its success, nor does it have the capital to recover if the product fails. This is the advantage of the MVP: a startup releases the absolute minimum of functionality that is needed to gain traction as well as build a customer base. The startup should not look at the early release as a completely finished entity, even though it is viable to customers, but rather should look at the early release period as a time of growth and learning. In a lean startup the product is built along with the company. Rather than targeted research with the intent of risk-aversion, the startup performs its “research” by servicing the customer directly and exploring its market as it goes. Some will argue that there are risks to accidentally releasing a half-baked product using this approach, but a startup is always a risky proposition anyway and there is always the potential for failure.
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