In the startup world, MVP is shorthand for “Minimal Viable Product.” This concept drives business strategy as the preferred way to get a software product to market.
MVP is defined as the absolute lowest level of functionality which – and here’s the very real catch – customers will still find useful and valuable.
The advantages of launching a product, in any form, as early as possible, are many:
- There’s no better way to test a business hypothesis than to try to actually sell a product.
- There’s no better source of product feedback than prospects who don’t buy and customers who do.
- Launching a product into the market imposes real-world sensibilities and discipline into a process that, up to that point, likely lacked both of these business realities.
The very real challenge is to determine just when the product has crossed the threshold and has just enough – just enough features, just enough reliability, just enough value, just enough promise – so that customers will pay real money.
Prevailing wisdom dictates that you should err on the side of being too early, that what you learn from getting a product into customer hands is transformative and outweighs the risks of disappointing users. In the words of Reed Hastings, Netflix founder:
If you are not embarrassed by the first version of your product, you’ve launched too late.
The right answer of when to launch is very much context dependent, though. Take two examples – one successful, one less so:
Zillow initially set out to build a comprehensive website where accurate home value information was presented for every residence in the U.S. At the time of its MVP website launch in 2006, however, the product was woefully short of this goal: the data presented was neither comprehensive nor reliable. As its founder, Rich Barton, recounts, on its go-live date, the website included only a fraction of the total market and the valuation algorithm was, in many cases, only so-so. Furthermore, the site crashed on the first morning.
Theranos, Elizabeth Holmes’s famously fraudulent blood-testing startup, meanwhile, had a similarly deficient product at launch (and also for several years after). As is well documented in books, podcasts, movies, and now the trial transcript from a criminal fraud prosecution, the delivery of value fell short of the company’s promises.
While both product launches struggled, the outcomes of the respective companies diverged widely. Zillow is a success story; Theranos (to put it mildly) is not. It turns out that MVP for diagnostic health technology is vastly different from a free website to check out what your neighbor’s home might be worth.
In the continuum of customer expectations, the MVP threshold for value for Gain’s software was very, very high. Customers use our product for critical path, deadline-driven, compliance reporting. Unlike Zillow, we had no wiggle room on accuracy, completeness, or reliability. This is not to equate our product with the promise of life-changing biotechnology, but we did hold ourselves to a similar standard when launching our MVP product in 2018.