Why You Should Develop An MVP

Sep 22 2015
By Joseph Knecht in Insights

So many startups are worried about releasing a fully functional, pretty product topped with a perfect UX. At first glance this seems like the right way to go about it. You don’t want to screw up your impression by showing a potential customer a half built, non-functional product, right? But if we take a closer look at what happens when you show a would-be customer your half built product. Things change pretty quickly, provided you do it the right way.

Let’s come up with a scenario to make this easier to understand. We’ll say we’re selling a B2B SaaS product to help restaurants better manage reservations. We’ve validated that this is a big industry problem - but we don’t know exactly what we need to build. We don’t know what additional features we need to add to make the product GREAT for these restaurants. Here’s what we do:

Come up with a bare-bones MVP (Minimum viable product). Lacking all the fancy features you’ve stayed awake at night to come up with. This is what you start showing your potential customers.

First, it’s important to manage your approach and expectations. You do not approach the process with sales in mind - but rather from a of research, or data collection point of view. This will disarm decision makers and allow conversation to flow freely. You’ve come up with something that will benefit restaurants. They are experts in that field. You’d like their opinion, to validate that it will be useful and to get their opinions on how to improve it. There are three MAJOR gains from this taking this approach.

  • Unbiased feedback
    • From a standpoint of research - they will help you to confirm whether or not your product is truly valuable. Based on their level of interest in the conversation you can gauge how much the product would actually affect their work. Often they’ll describe past scenarios that caused trouble where your “idea” could have helped. This market research is invaluable when faced with decisions on how you’re going to move the product forward.
  • Ideas for features
    • In these research conversations the potential user will often help to provide ideas for additional features for the product - even if they’re not going to be developed for months or years down the road. You’ll hear things like “you know what else would be really cool...?” or “It would be great if we had a tool that could do X!” These are all things you should jot down and maybe bring up when talking to other potential customers in the future.
  • Future customers
    • This one is a little bit tricky, because it depends heavily on your ability to draw people in without appearing too salesy. When you’re conducting your research, ask them if you can follow-up in a couple of weeks to share the results and bounce some new ideas off them. Say things like “You’ve been a really big help, do you think I could contact you again in a few weeks to find out what you think of some of the additions we plan on making? I’d love to get your feedback.” If you’ve done it right, the answer is almost always a yes.
    • After the second time you should show them your MVP - they should have helped you to design a product that would really help them get their job done. At this point it’s time to ask if they’d be willing to pay a small fee to test the product. Secure letters of intent, or if the interest is strong enough, pre-orders for the product. This can help you fund the product or secure funding through investors. Showing that you have customers lined up to use what you’re building speaks volumes to investors.

This is one of the major ways early stage entrepreneurs successfully fund, launch, and grow their businesses. Have tips on how to successfully launch an MVP? Share them in the comments below!

Joseph Knecht
Post by Joseph Knecht

Joseph Knecht is the CEO at Proteus and loves to cover the topics of entrepreneurship, digital transformation, and web product commercialization.

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