When hearing the term MVP, most people think of ‘Most Valuable Player’. However, entrepreneurs who want a steady and reliable growth know that, in business terms, the most valuable player in an early stage of development is the Minimum Viable Product. This product is not a basic, under-developed one, but one good enough to satisfy the early customers.

Here are 7 reasons why you should build an MVP for your startup:

1. Create brand awareness and gain customers’ trust

If you have an innovative idea, there are certain steps you need to take before having the expected success.

People always want the best quality and have the highest level of confidence in what they personally test.  A startup is a new brand on the market and even if it offers the best solution in their industry, it still lacks the brand awareness it needs in order to reach the people who need it. 

By building and launching an MVP, you give people the opportunity to test and offer feedback on your new idea. Moreover, an MVP has a small cost, since it only offers the basic amount of features your idea will incorporate. People who need those features or need a solution in that field will acknowledge your presence on the market and will be more willing to test your product at a low price point. If their requirements are met, they may even shortlist your company and stay tuned for future development.

2. Raise funding for future development

No matter what your chosen field of activity is, funding is necessary for testing and developing a new idea.

By launching an MVP, you can collect the first pieces of revenue from its sales. This cannot be your sole or main funding method but it is certainly useful when you started from scratch.

3. Market research

Your products must fulfill the market’s demands. By launching an MVP, you get the opportunity to see which features constitute a real solution and which do not.

At this stage, it is essential to stay tuned for reviews and research how your products’ features are integrated into the business environment you are targeting. You can also get valuable insights with regard to how the product is received and where your development efforts should be focused in the future.

By establishing some clear development objectives, you can create a more reliable and useful solution.

4. Testing

Testing is one of the most important phases in creating and launching a new idea. Of course, internal testing is prior to launching an MVP. However, this can never be fully unbiased because of the focus the development teams have on the aspects which were the most time consuming or were established as the main objectives of your project.

Direct users of the early stage product can offer valuable input on user-friendliness and utility. After collecting as much data as possible, the generated statistics can offer a direction. By building an MVP, you get to know how the development process of the final product could be improved.

5. Create a base for other products

After gathering input from users and developing a functional early stage product, this can serve as a base for future development. Of course, the limited features and development mean that the MVP will never be a top seller or become the company’s signature product.

However, based on the features which caught the public’s attention and proved to be real solutions, new products can be developed. New features can be added in order to create a more diversified product line for specific needs. This will make your brand more appealing to niche clients who need your solution, but not in the form that appeals to most.

The MVP should incorporate the most important features of your solution. This way, less testing and market research will be needed when the product line is diversified.

6. Create demand and a user base

Demand is the force that drives innovation in any industry. The MVP can be a great indicator for the volumes you should expect and the amount of research you need to invest.

If the MVP is successful and appeals to potential customers, they will demand more features or a more developed product. If this demand is created before launching the final product, there will be more initial customers willing to pay for the new service or product you create. They will be the first individuals in your customer base and will also attract others.

Moreover, demand also increases brand awareness and attracts investors.

7. Reduce implementation costs

Implementation is one of the most important phases any project or product has to go through. It also proves to be quite expensive because of the variety of factors that need to be accounted for.

An MVP is much easier to implement than the final product. This is both because of the smaller amount of features and the lower cost of production and research. By analysing which marketing strategies were best or the statistical data about the demographics of your early-stage customer base, you can decide how the final product will be promoted for your desired audiences.

This process reduces the implementation costs, as money will be spent efficiently, directed towards what each category of customers wants.

The above references an opinion and is for educational information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. Investing in any business involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Please click here to read the full risk warning.

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