The Lean Startup method, created and popularized by Eric Ries, has received great support among entrepreneurs. Basically, it talks about the importance of MVP development. There are many types of MVPs, and to this day there are discussions about which product can be considered as an MVP.
However, for most entrepreneurs, MVP is the minimum version of a product, designed to bring value to the consumer by solving a particular problem. Besides, MVP development is cost-efficient.
One way or another, the criteria for success or failure of MVPs are quite obvious. If you fail to apply the appropriate MVP assessment criteria, you can ruin a fairly successful product.
Defining the MVP type
Professionals categorize MVPs by what they actually perform. Your MVP can relate to both a particular market segment and a customer problem. In this context, it will be appropriate to recall the Dropbox example. Their MVP was a 2-minute video explaining the principle of the future service. It didn’t carry much value and didn’t solve any problem, but it tested the market for a new untapped segment and potential customer problems.
Therefore, MVP success is evaluated depending on its type. On the one hand, the Dropbox MVP can be considered successful since it validated the presence of a new segment in the market. However, when it comes to solving problems, their MVP was useless. That video cannot even be called an MVP.
That is why, before deciding on what defines a good or bad MVP, it is important to decide what exactly your MVP is going to perform.
Signs of a bad MVP
The main sign of a poor MVP is the lack of any feedback. Simply put, your MVP failed if you launched it and didn’t learn anything.
For example, if you created an MVP and found out that nobody needed it, it didn’t mean that it was a failure. First of all, it helped you validate the problem (it turned out that there was no problem) and the quality of your method (there was a problem, but your method couldn’t solve it).
Secondly, it saved you from large investments. After all, spending 10x less budget on MVP sounds better than investing in the full-cycle development only to find out that your idea is wrong.
Therefore, you should accurately set the MVP’s mission and select the correct evaluation criteria. Let’s use the HADI formula so that you better remember the correct approach to assessing an MVP. The HADI formula is:
- H-Hypothesis. This is your initial assumption of a problem, market segment, target audience, or else. Along with the assumption, you can develop a method that would help to validate this hypothesis.
- A-Action. This is a stage at which you actually design and develop your MVP to check the hypothesis.
- D-Data. Here, you obtain any knowledge or information, e.g. user feedback.
- I-Insight. At this stage, you make a decision regarding the future of your MVP and evaluate its performance.
As you can see, the absence of any information is a key point. This won’t allow you to fulfill the last stage and evaluate your MVP.
Signs of a good MVP
Based on the main idea of this article, a good MVP will certainly give you some information that can be effectively analyzed. The data about your MVP performance can either confirm or refute your hypothesis or method. These exact results make your MVP successful.
Look at the following example. Let’s say, your MVP is aimed at testing the market for a particular problem. In this case, a good MVP will confirm that the problem exists, but it will not necessarily help users solve it. The solution is represented by the method that you have chosen for your MVP (a function of your MVP). The method may not be correct, but most importantly, you have confirmed the problem and can further work on developing the right solution. Of course, there’s also the best-case scenario, where the obtained data confirms your initial hypothesis and shows that your method solves potential customers’ problems. If there’s a large amount of user feedback (even negative), it is a sign of a good MVP, too.
Briefly, the successful completion of the task assigned to an MVP, with minimum budget and time, determines its success and quality.
Why is it important?
It is difficult to overestimate the importance of the correct approach to assessing MVPs. The launch of an MVP is only the first step towards the overall success of your startup and your business as a whole. After that, you will need to make crucial decisions regarding what to do next and in which direction to move. That is why the wrong approach to assessing the MVP performance will eventually lead you to incorrect decisions regarding your startup’s further development. And as a result, your business will see failure.
On the other hand, once you have correctly assessed your MVP, you can develop a further strategy in a proper way. And here, the range of options is extremely wide — from giving up on the original product idea to investing in the development of a full-fledged solution.