Minimum Viable Product (MVP)

Definition

A minimum viable product (MVP) is the most basic version of a product that is released to the market to gather feedback and validate key assumptions about the product and its target customers. It represents the minimum set of features necessary to provide value to customers and test the viability of the business idea.

5 Must Know Facts For Your Next Test

1. The MVP helps entrepreneurs validate their ideas and assumptions without investing significant time and resources into a fully-fledged product.
2. By releasing an MVP, entrepreneurs can gather valuable customer feedback to guide the product development process and make informed decisions.
3. Launching an MVP allows entrepreneurs to test the market and gauge customer interest before committing to a more extensive development effort.
4. The MVP is a key component of the Lean Startup methodology, which emphasizes rapid iteration and continuous learning.
5. Successful MVPs often focus on solving a specific problem or addressing a particular need, rather than trying to include every possible feature.

Review Questions

• Explain how the concept of a minimum viable product (MVP) relates to the topic of entrepreneurial opportunity (5.1 Entrepreneurial Opportunity).
  • The MVP is a crucial tool for entrepreneurs to validate their business ideas and identify viable entrepreneurial opportunities. By releasing a basic version of their product, entrepreneurs can gather valuable customer feedback and data to assess the market potential and demand for their offering. This information can then be used to refine the product, identify unmet needs, and make informed decisions about pursuing the entrepreneurial opportunity.
• Describe how the MVP approach can help entrepreneurs avoid the 'Field of Dreams' mindset (11.1 Avoiding the 'Field of Dreams' Approach).
  • The 'Field of Dreams' approach, where entrepreneurs build a product and assume customers will come, is a common pitfall that the MVP helps to avoid. By launching a minimum viable product, entrepreneurs can test their assumptions and gather real-world feedback before investing significant resources into a full-scale product development. This allows them to pivot or adjust their strategy based on customer insights, rather than relying on untested assumptions about what customers want. The MVP approach encourages a data-driven, customer-centric mindset, which is essential for avoiding the 'Field of Dreams' trap.
• Analyze how the MVP concept can be applied in the context of launching a new venture (15.1 Launching Your Venture).
  • When launching a new venture, the MVP approach is a critical component of the entrepreneurial process. By releasing a minimum viable product, entrepreneurs can quickly and cost-effectively test their business model, gather customer feedback, and iterate on their offering. This allows them to validate their assumptions, identify potential issues, and make necessary adjustments before investing heavily in a fully-developed product. The MVP serves as a foundation for the launch of the venture, providing valuable insights that can guide the overall product development and market entry strategy. Applying the MVP concept during the launch phase helps entrepreneurs mitigate risk, optimize their offering, and increase the chances of success for their new venture.

Related terms

Lean Startup:

A methodology that emphasizes rapid iteration, customer feedback, and data-driven decision making to develop and launch new products.

Pivot:

A change in strategy for a product, service, or business model based on customer feedback and market data.

Iteration:

The process of repeatedly refining and improving a product or service based on user feedback and market insights.