Minimum Viable Product or MVP is a development technique in which a new product is introduced in the market with basic features, but enough to get the attention of the consumers. The final product is released in the market only after getting sufficient feedback from the product’s initial users.
While building products, one has the options of either building the entire product first and then releasing it to the users (waterfall) or just build the most important features just good enough to to attract the early adopters and then build on it incrementally. This is a critical decision in every new product or service development, where resources are scarce and the investors want to see the returns on their investment as fast as possible. There is also the need to manage market related risks as early as possible, by allowing early feedback.
Business case for moving to Agile from Waterfall
Though it takes lot of maturity to appreciate the value of fast failures, they do have a significant business case. While working with a multinational product company to transition their teams from waterfall to Agile I was curious to know the business case for doing so, from the horse’s mouth. They had a two hundred member team working on a new product for almost four years, before realizing that there are no takers for it. Instead of building the entire product, if they could have focused on the minimum viable product. This approach would have helped them to make early releases of the product. This approach would have helped them to understand the market response to the new product well in advance. That would have helped them to save millions of dollars either by aborting the project early or by pivoting the product strategy into something viable. Yes, of course fast failures do have business case as long as one is willing to learn and take action.
Scoping the Minimum Viable Product (MVP)
Then how do we decide on the scope of the minimum viable product?. This calls for the alignment of the Marketing and the Product development road maps.
According to the Crossing the Chasm by Geoffery A. Moore, technology adoption life cycle can be divided into;
- Innovators 2.5%
- Early adopters 13.5%
- Early majority 34%
- Late majority 34%
- Laggards 16%
Even though Geoffery A. Moore based his study on technology adoption, the same pattern holds good for every new product or service. The MVP must address the needs of the innovators and the early adopters first. That itself will allow the product to address around 16% of the potential market. Then come the pragmatists and the conservatives. Alignment of the product road map to the marketing strategy targeting these category of customers will help to deliver value to the customer through an iterative and incremental product development. This insight will help to scope the MVP and the subsequent releases.