To create your minimum viable product (MVP) you will have to go beyond simple market statistics and into a deep understanding of all aspects of your business.
Among the list of things to wrap your head around, you will need to know your customers and your prospects to create an MVP that is a fit for them.
You’ll also need to drill down to niche markets that are your most viable targets in order to tailor your MVP and/or the messaging about them appropriately.
Then you’ll look to understand the investment and fundraising being provided to others in your space. This will help with budgeting your MVP development.
Tech startup founders are famous for their enthusiasm, innovation, and passion for creating industry change. Sometimes this leads to a desire to skip important steps like determining the MVP.
This is very rarely advised especially for early-stage start-ups.
How we define an MVP
To understand this better, let’s start with how Precursa defines a true MVP:
Minimal Viable Product (MVP): A simple version of an offering that provides entrepreneurs critical feedback for future iterations, benefit enhancements, and planning for development needed for improvements.
An MVP should be viewed as an experiment designed to gather data on how customers might react to and/or use your offering. One little tweak to the vision of your start-up concept may make all the difference to the market!
It’s a way to preserve your precious time and money.
To effectively create an MVP solution worth testing you should do the following three things:
1. Understand your customers and prospects
We’ve consistently coached our entrepreneurs to know their customers, and prospects, and thereby how they shape their target markets. It sounds so simple but there is a big difference between someone who says, “That’s a cool idea” and another who says “I would give up my hard-earned dollars for that cool idea”. A supporter is not necessarily a customer. They are good for your word-of-mouth marketing and providing a reaction to your MVP. But at the end of the day, they are not your target.
Here are some tips for how your customers and prospects can help you with your MVP:
- Allow for free trials of the MVP, even if just for a temporary time. This gives your customers and prospects time to really absorb what you’re taking to market in order to provide valuable feedback.
- Ask open-ended questions in order to get them talking. Their input is critical to your success and will help you attract buyers like them. You will need to be an active listener, and so will any of your partners.
- Incent them to dig in so they give you meaningful feedback. Find a way to say “Thanks for helping us get better, faster.” Showing them you appreciate their time and contribution matters.
2. Understand your niche
Most companies have more than one target niche which would benefit from their offering.
You should narrow your intended markets down to specific niches and then prioritize them in order of where you anticipate the quickest return or highest profit. The way in which you present your MVP to each may vary.
To get specific about your market approach you should first learn to identify your ideal customer’s interests and passions, then identify the problems you can solve, followed by research on the competition to determine the profitability of your niche.
Upon delivering your MVP to your niche market(s), you should:
- Ensure messaging is tailored for the audience.
- Leverage A/B split testing to see what resonates best.
- Make adjustments on the fly to help you narrow the field.
3. Study your competitors
Don’t let the competition intimidate you. The goal is to do what you do better, more cost-effectively, or both. Competitors help investors feel more at ease and assure them that there is a real market need. Getting investors to embrace your competitive differentiators is key to getting them to open their checkbooks. Part of winning the attention of investors comes from comparing your advantages to the competition and including “what you do that’s different, why it’s better, and how (strategically) your solution will be a vast improvement over the others.”
Knowledge about the funding from investors that is provided to others in your space will also shed light on what is being backed financially. If your competition did their homework properly and the investors are in turn delivering the funding needed, you should take note of where they are winning. This will help you to make improvements without having to lose in the market, forcing adjustments to your offering.
From early-stage to late-stage funding, it is key to ensure you know where to target your efforts and how likely it is that you can secure the dollars needed for your MVP and beyond.
Every entrepreneur wants to win. We recommend that you strategically use a well-thought-out and developed MVP as the launch pad.
Create your MVP solution and share it with your intended buyers. Allow them to give you candid feedback and stay open-minded to the changes that may be necessary to ensure it is well received in the market. Pay attention to the traction your competitors are realizing and use their market approach to guide your own decisioning.
To learn more about how the development of an MVP should fit into launching your start-up, check out the innovative, game-changing Precursa platform. Apply for an invite today to get started.
