The MVP is how a startup really announces itself to the world. It’s the first look most people will get at the startup’s big idea and how it’s solving customer problems. It’s often very raw. Typically, you’ll find that the MVP is hardly recognisable compared to the product that you know and love today.
However, by tracing the history, you can see how the founders used the MVP to take on early feedback. This helped them shape the product into the foundation of a successful enterprise. These stories are inspiring tales of innovation, creativity and resilience, and cut to the very core of what it means to be a startup entrepreneur.
What are minimum viable products for startups?
A minimum viable product, often referred to as MVP, is something that meets the minimum criteria for the market and customer. Customers can buy or subscribe to the application, and gain value from its use. However, it is not a fully featured and realized product. An MVP is just the starting point. Following feedback and ongoing development, it will continue to be improved, transformed, and deepened in the future.
Why do startups need an MVP?
The simplest answer to the question “why do startups need an MVP” is “so they can earn revenue and test their idea in the live market”. An MVP is the first product a startup will release, and yes the initial revenue returns will be small at first. However, it will be a great source of feedback, letting the entrepreneurs know if customers are interested in their idea, and what about it they love. Furthermore, being able to show some level of revenue is a critical step to growing the company and seeking further investments.
If the startup is listening to the feedback, and uses this to inform later iterations, the MVP becomes central to the startup finding the all-important product-market fit.
1) Product validation
The MVP is the moment when the startup’s hypothesis and idea is tested by the market for the first time. Before the MVP you would have undergone idea validation by interviewing customers and researching the market. The MVP is the opportunity to prove that you’ve heard the needs of the market and are on the way to product-market fit. If the MVP falls flat, then it’s also an opportunity to pivot if you need to, before you’re in too deep.
2) Gather valuable data and feedback
The first users and early adopters of the MVP will offer a fountain of feedback on what’s working well in the product. They will also highlight where the opportunities for improvement are. This makes more rapid iteration viable, and the development of a prioritization process that will see the product meet customer needs faster.
3) Find your most vocal fans
Early adopters of any product will understand that the MVP is still in ongoing development. They won’t expect a complete feature set. However, if the core features are strong and add value, these users will become your loudest cheerleaders. The word-of-mouth value alone is a big boost to early marketing efforts.
Famous MVP examples to inspire your own
The best way to understand what a successful MVP looks like is to see some examples of MVPs that launched successful enterprises. It’s easy to forget just how “humble” some of these MVPs can be, given the value and scope of the businesses they turned into.
Meta (Facebook)
MVP: Web directory
If you’ve been using Facebook for long enough, you remember those heady early days when your profile was filled with digital “pokes” from friends. That was limited enough, but it wasn’t even the MVP.
Before even the pokes, “Thefacebook” (as it was called in its MVP stage), was simply a messaging platform that allowed Harvard students to connect and send messages to one another. As simple as the idea was, it resonated. It reached 1,500 users in just a few days, and Mark Zuckerberg quickly realized the value of giving people a public platform for communication. By focusing on building on that quality with subsequent iterations, today, Facebook has two billion daily users.
Amazon
MVP: Book shop
People often forget that Amazon—a platform known for selling just about everything you could imagine buying—started out life as a simple online bookstore.
The MVP was a humble website where people would place orders, and then the company would source books from distributors. Eventually, Amazon’s strength as a company would come from owning massive warehouses across the globe, and the world’s most efficient logistics operation. However, it all started with no same day delivery, and no warehouses.
It started with the boast of a million books and low prices.
Loom
MVP: Video platform (after two false starts)
Loom is a good example of how an MVP can help a startup by providing early feedback and allowing it to pivot quickly.
Loom initially launched Opentest—a video application that could be used by a company to get expert feedback on their products. This fell flat, as did a second attempt to provide a NPS feedback form that companies could embed on their websites.
It was the third attempt, Openvid, that allowed people to record video messages to send to people on their teams. It was this MVP that set Loom on a trajectory to a $1.5 billion valuation.
The iPhone
MVP: It really was just a phone
The first-generation iPhone didn’t even have an app store. It didn’t support Bluetooth, or even the ability to copy and paste text. Really, that first generation of “smartphone” wasn’t that smarter than the old Nokia devices that had taken the world by storm (and the Nokia devices had that Snake game).
The phone was only good for making phone calls, texting, checking email, and basic, text-based websites (remember, 3G Internet was very slow). The iPhone, perhaps more than any other product, epitomizes the benefits of launching an MVP and iterating on it. Because the iPhone was wildly popular from day one, Apple had a powerful foundation to build on.
Oculus
MVP: A VR headset
Kickstarter has been a valuable platform for startup founders with innovative ideas to find their first customers. Oculus’ founders had little more than a prototype when they brought the promise of VR for the consumer to Kickstarter.
Their campaign raised $250,000 on the first day, and just shy of $2.5 million at the end of the campaign. This gave the company its first customers to ship its MVP to. That worked out well too, and the company was acquired by Facebook a few years later for $2 billion.
Aardvark
MVP: Search engine
Aardvark was a fascinating effort to put humans into a search engine. Users would ask questions, as they do in Google or Bing, but Aardvark’s unique hook was that humans would answer those questions. Aardvark’s platform would put the person into contact with another user that the engine had determined was ideal to provide the answer. To scale this, the process of connecting users eventually needed to be automated. However, at the MVP stage, Aardvark employees would manually manage each query.
By doing this they could test assumptions and ensure that the platform was delivering on its promise. Aardvark worked so well that Google acquired the company for $50 million. That did seem to be an effort to get a competitor off the table, though, since Google then discontinued Aardvark just a year later.
Uber
MVP: Phone application
Today, Uber is the name in ridesharing (as well as food delivery and person-to-person courier services). The original Uber application, however, would be almost unrecognizable to users.
It was exceedingly simple, and it did one thing—it booked a ride.
The user would specify where they were in the app, and Uber would connect them with the nearest driver. The kicker here is that all the features we know about Uber now—fare estimate, payments platform, and in-app tracking, came later.
Uber used its single-feature app and a limited initial rollout to gather information from drivers and passengers. From there and through iteration it delivered a product that was hugely disruptive to the taxi industry and revolutionized food delivery.
TikTok
MVP: Mobile App
Today we know of TikTok as the zoomer’s favorite social media platform, with over a billion monthly active users. What is less well known is that it was very nearly a Facebook product. The MVP for TikTok was an app called Musical.ly, which was a simple, 15-second video sharing platform that had one key feature: a watermark. When videos created on Musical.ly were shared elsewhere, the watermark logo let viewers know about this app and, curious, people downloaded it in droves.
Facebook spent six months looking at Musical.ly, but ultimately stepped away because they were concerned about Chinese ownership and the very young age demographic it appealed to. It was instead acquired by ByteDance for $1 billion and, after rolling together a couple of different app businesses, launched as the TikTok we all love today.
Foursquare
MVP: Social network
The MVP of Foursquare suggested that the company was aiming to rival other emerging social media applications.
Much like Twitter or Facebook, the Foursquare app was inherently social. It gave users the ability to “check in” to locations that they were visiting, and then provided badges and rewards to the app’s heaviest users.
As a social media network, Foursquare struggled. However the company was able to take its learnings from the MVP, and build the company into a geolocation, data-driven company. Now it succeeds by having some of the deepest analytics and insights around human movement.
How to find MVP funding for startups
Developing an MVP can be a cost-intensive undertaking for a startup in its earliest stages. Indeed, being unable to fully fund the MVP is one of the main reasons a startup falls at this early stage. Even with the entrepreneur being creative and bootstrapping on fumes, many look to find funding to complete the MVP. With a source of funding, the MVP can be completed more quickly, and ease the financial burden on the founder’s personal resources. The founder will be able to release it to the market confident that it reflects their vision, without compromise.
How can a startup raise pre-seed capital to fund its MVP, when they don’t have anything tangible to show potential investors yet? Investors involved at the pre-seed stage don’t generally look for an MVP.
Rather, they’ll look to support a startup that has identified a gap in the market, and has a great founding team with an excellent plan of attack. A startup that has that potential will find the opportunity to earn investment and be able to subsequently prove itself via the MVP.
The key takeaway: Start small and iterate!
There are many approaches to developing an MVP and getting it in front of customers and investors. However, there is one thing all these successful MVPs have in common: they’re focused on getting to the crux of the problem that the founder has identified as an opportunity.
When we look at a company like Uber, Apple, Amazon or Facebook today it’s difficult to imagine them being so feature-limited. However, none of these companies would have grown to what they are today if they hadn’t started this way.
The feedback, customer engagement, and technical learnings that you’ll derive from your MVP will make it an essential step in the startup journey as well.
By
Antler
