MVP Definition

Minimum Viable Product is a minimum functional product with enough features, bells & whistles and defined use cases such that it can be used by early adopters / customers to help you get:

  1. Initial customer feedback
  2. Product market fit
  3. Avoid costly mistakes (by dedicating resources & time on a full-fledged product)
  4. Right target group

But in recent times, instead of viable, valuable is a more respected word. Thus making MVP - Minimum Valuable Product. One more alternative definition which has come up is Minimum Lovable Product (MLP). It's the same as MVP but when you are building a product in a category which already has established players, then you need to add extra something which will be loved by users. E.g If someone wants to launch a food-tech start-up in India, they will be competing with Swiggy or Zomato in the food delivery space. Or competing with Faasos, Box8, Freshmenu etc. in food space. Therefore, you will need that something exciting in the MVP to start with, thus making MVP -> MLP. 


Visual Representation of MVP


The above is a very accurate representation. MVP is not just about building a minimum functional product (like in the left image), but should also be usable. That means, it should be:

  1. Reliable (whatever you build, should be glitch free)
  2. Usable (should solve some customer problem)
  3. Efficient (an outcome of good interactive emotional design)

 

Ok, we understand. Above explanation has a lot of words and text. Below is a more visual aspect of imagining, processing & executing the above MVP in terms of clear product composition.

The mistakes which a lot of companies / startups do, is that they think that they “know it all”. Hence, they start building the final product (as shown in the top part of the image). It is not wrong, if:

  • You have understood the customer & their pain points
  • You are confident of product market fit
  • You are a market leader in certain segment or vertical
  • You know & own the domain in & out
  • The new product is a genesys of current business
  • You have enough muscle power (time, resource & money)
  • An established team

 

But if you are an early stage startup, the above approach can be costly. In such case, you need to take the approach as shown:

  • Build a minimal but usable product
  • Keep iterating (towards the end product)
  • Keep adding customer base such that momentum continues
  • Track “north-star” metric which should continue to grow, which can be anything
    • Revenue
    • Daily Active Users
    • Time-spent
    • Retention Rate
    • Engagement Metrics

Let's go through some startups and try decode as to what their MVP approach was:



Swiggy


We came to know about Swiggy in 2015 for the first time. One of our colleagues was an early customer of Swiggy (as he knew Swiggy founders). As per him, Swiggy started with:

  • Just one pin code (Koramangala, Bangalore) 
  • Order management was on excel
  • Initial website was built on Wordpress
  • Very basic delivery setup
  • Customer delight was taken care of by giving them an option of getting delivered anything “under the sky”, along with their order. 
    • Trivia: Pack of cigarettes was the highest requested product (along with the order)

 

What they wanted to test?

  • On-time delivery as a communication
  • Adhoc product request like ‘cigarette’ as an X factor
  • Given the operations heavy business model, what are the nuts & bolts of this whole space
  • Customers, as well as, restaurant partners pain points

 

Mistakes they avoided?

  • Keeping the coverage area very small (probably just one pincode & nearby areas)
  • Building a simple “functional” tech system
  • Usable by ensuring that customers were able to order and get the delivery “in a timely manner”

As they scaled, they continued iterating on the product. And look at where they are today.



Flipkart


Flipkart's story of early days is that of folklore. Basis what we know and have heard, their MVP was:

  • One category: Books
  • Geo: Mostly Bangalore (to start with)
  • Basic functional website for customers to order
  • Manual order management
  • Inventory: Instead of owning the inventory, they went and picked the books from book-store
  • Self-delivery: In early days, founder themselves used to procure the product and do door-delivery

 

What they wanted to test?

  • Ecommerce acceptance as 2007-2009 were early years of online commerce in India
  • Initial customer adoption, as books is a very niche segment with loyal audience
  • Nuts & bolts of what a full-fledged system can look like with a very standar category like books
  • Refund / product return cycle was minimal as books doesnt have issues like size etc.
  • Huge catalogue Vs. customer engagement on site

 

Once they had the validation, they started:

  • Scaling in terms of pincode coverage
  • Adding more categories
  • Building sophisticated systems

 

We have looked at a few B2C/ consumer startups. Now let's look at one of the B2B / SaaS product examples. There are not many public materials in terms of SaaS coverage. Basis what we could gather, here is an interpretation of how Freshdesk has evolved over years.



Freshdesk


Freshdesk is an online cloud-based customer service software providing help desk support with all smart automations to get things done faster. When they started in 2010, this is what an MVP would have looked like for them:

  • Solve customer support by enabling faster response for customer query
  • Simplify the cost of ownership for businesses
  • Automate one channel, email in this case. There are plethora of channels today
    • Social Media
    • Website 
    • Chatbots / Messaging
    • Telephone / IVR
    • Etc.
  • Features for customer agents like 
    • Setting up auto-reply
    • Ability to assign to someone in the team

 

Today, Freshdesk is an entire suite of business / enterprise software, solving “all things customer”. Where they are today, was built one piece at a time. Iteratively working on MVP and improving the product. This approach enabled them in building similar products for different domains 

  • Sales
  • HR
  • Internal Teams communication, etc.


Conclusion


Hope we were able to put some perspective on what is MVP and why is it important. Technically, MVP is a neutral concept and applies for any function & team. But for product managers, this has become a very important concept. Not only does it help bring clarity (which is very important to iteratively build products), but also helps avoid making costly mistakes in case the product does not solve any problem, speeds up the go-to-market time, helps get quicker feedback and improve the chances of product success. 

We will cover the detailed steps / process on how to go about MVP / MLP in another article.




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