Validating Business Ideas: The Essential Role of MVPs
In the realm of digital innovation, I am sure you have heard or read about the importance of using a Minimum Viable Product (MVP) to help validate your business idea, your app or even specific features. The challenge a lot of first-time entrepreneurs have is working out what to test in an MVP and when to do it.
The thing is, validating an idea doesn’t start with your MVP. In fact, even before deciding which of the many MVP approaches you can use, you need to engage in preliminary validation work. This involves a mix of market research and direct customer engagement. Doing this will ensure that your MVP is built on a foundation of real-world needs and insights.
The Preliminary Phase: Research and Customer Engagement
Before you even consider an MVP, it's paramount to validate the assumptions underlying your business idea. Are you solving a real problem? Who experiences this problem, and how are they dealing with it currently? This groundwork involves two key activities:
Customer Conversations: Engaging directly with your potential customers can provide invaluable insights. It’s not just about confirming that the problem exists, but understanding the nuances of how it affects your target audience. These conversations can reveal unmet needs, frustrations with current solutions, and even unexpected use cases.
Desk Research: Alongside talking to potential customers, delve into existing data and research. This includes analysing competitors, understanding market trends, and identifying demographic details of your target market. This research can help refine your hypothesis and direct your MVP towards areas with the highest potential impact.
Incorporating this phase into your approach ensures that when you do build an MVP, it's already informed by a deep understanding of your market and customer needs.
MVP Approaches: Refining with Research Insights
With this preliminary research in hand, let’s look at the eight MVP approaches that we have used in the past (I am sure there are more, but these are the ones most familiar to us and our experience).
Smoke Tests involve presenting a basic idea or concept to gauge interest before any actual product is developed. This can be as simple as a social media post or a small ad campaign. Now more targeted thanks to the research you did in prelim, your smoke test can focus on aspects that resonated during your customer conversations.
Landing Pages are a step further than the Smoke Test, offering a more tangible glimpse of your proposed product or service. They’re perfect for capturing user interest and collecting data through sign-ups or enquiries. With insights from your research, these pages can be more accurately tailored to your audience's interests and pain points.
Explainer videos offer a creative way to present your idea. A well-crafted video can explain your product's potential benefits and functionalities, enticing early adopters and gathering valuable feedback. You can use the language and scenarios that your customers used during your prelim stage to make these videos more relatable and engaging for your target audience.
Wizard of Oz Test: Named after the famous novel, this approach involves creating the illusion of a working product. Customers interact with what they believe is an automated solution, but behind the scenes, manual processes are at work. It's ideal for testing complex tech without building it first. Again, use the research insights to help determine which aspects of your product you need to validate. Think about the assumptions you are making that carry the most risk if you are wrong. And focus on validating those.
Crowdfunding not only tests the market but also raises funds. Platforms like Kickstarter allow entrepreneurs to present their ideas to a wide audience, validating the demand and securing initial capital. This is a great MVP approach, but one that I would use at a later stage, when you have already validated some key assumptions about the problem you are solving.
The Concierge MVP involves manually performing services that you eventually want to automate. It's a high-touch approach, offering deep insights into customer preferences and behaviours.
Single-Feature MVP: as the name suggests, this MVP focuses on one core feature of your proposed product. It's about doing one thing exceptionally well, attracting early users, and building from there. Use the prelim research phase to identify the most important feature of the solution you are building. And test that.
Piecemeal MVP: this approach utilises existing tools and services to create a functioning product. It's a cost-effective way to assemble your MVP without extensive development.
Integrating Research with MVP Development
Now, when should you transition from research to MVP development? It’s a matter of balance. Once you have enough evidence to suggest that your idea solves a real problem for a specific audience, it's time to start testing in the real world with an MVP. This doesn't mean you have all the answers yet, but rather that you have a focused hypothesis to test. And you can pick the right MVPP approach to fit the stage you are at.
MVP Learning and Risk Mitigation
In terms of learning from an MVP and mitigating risks, your initial research plays a pivotal role. It provides a baseline against which you can measure the feedback and data from your MVP. Are the insights from your MVP aligning with your research, or are there new surprises? This continuous loop of research, MVP testing, and learning is what drives a successful iterative development process.
Conclusion
Incorporating a phase of customer conversations and desk research before developing an MVP adds a layer of depth to your validation process. It ensures that when you choose an MVP approach, it's finely tuned to test the most critical aspects of your business hypothesis. Remember, the journey of bringing a business idea to life is iterative and adaptive. It’s not just about building a product; it’s about constantly learning from your market and refining your vision to meet real-world needs and opportunities.
