Let’s begin by specifying who this is for. This guide is crafted by the team at Merge for entrepreneurs, startups, and companies like yours. It's all about making your business ideas a reality and doing it smartly without burning through resources or time. We've spent over five years in the business, helping others shape their products, and now we're pouring all that know-how into this guide.
An MVP isn't just your first shot at the product; it's your fastest route to learning what works. It's about getting a feel for the market with just enough features to test your idea. Unlike traditional product development, which takes its sweet time aiming for perfection, here in the MVP world, we're all about starting that learning journey ASAP.
Think of it as your first step in the Build-Measure-Learn cycle. It's a safety net for your investment, letting you try out different ideas without too much risk. Startups love this because they can't afford to waste resources. But even the big players can use MVPs to test the waters in various market segments. The best MVPs hit the nail on the head with features that users really need to solve their main problems. These are the MVPs that evolve based on real feedback from real users.
Here's what you need to do and we will help you do it:
- Show your idea in action, and it's easier to get investors and your team on board.
- Launch your MVP to see how users react and what they actually like.
- Figure out who loves your product and who's willing to pay for it.
- Use the feedback to decide your next commercial moves.
- Get the product in users' hands and see if your design hits the mark.
- Focus on what's essential, learn quickly, and be ready to switch gears if needed.
That's what this guide is all about – helping you build an MVP that doesn't just test your product idea, but sets the stage for its success in the market.
MVP success stories (with important lessons)
How about we check out some real-world examples to set the mood? The following case studies of successful MVPs show what worked, why, and the valuable lessons they offer.
Dropbox
Dropbox's journey began without an actual product. Instead, founders Arash Ferdowsi and Drew Houston released an explainer video, simulating their file-syncing service. This approach was to validate interest before investing in infrastructure. The response was overwhelming, with over 70,000 potential customers signing up overnight. Dropbox's MVP focused on a problem many didn't realize they had - syncing files across devices. Their referral program, offering free storage for referrals, was a stroke of genius in marketing, boosting their user base to 50 million in just one year from their 2008 launch.
Key lessons:
- A demo can be powerful. Dropbox's MVP was initially just a demo video, proving that even a video can effectively validate a product idea if the actual product isn't ready.
- Know your audience. Understanding where your target audience is and addressing them directly can significantly impact the successful launch of an MVP.
Airbnb
Airbnb's story is rooted in a personal need. Founders Brian Chesky and Joe Gebbia, struggling to pay rent for their San Francisco loft, decided to rent it out to attendees of a design conference. A simple webpage with photos of their loft brought in three paying guests, laying the foundation for Airbnb. This MVP approach of cutting out the middleman in short-term rentals and expanding organically set the stage for their future growth. Co-founder Paul Chesky's dedication to 'dogfooding' the product by living exclusively in Airbnbs further exemplified their commitment to their service.
Key lessons:
- Focus on core functionality. Spotify's first MVP was a desktop app with a single core feature - music streaming. This focus allowed them to validate their idea efficiently.
- Act on feedback and extend. Once their core idea was validated, Spotify expanded their offerings by developing mobile apps and engaging more artists, always acting swiftly on user feedback.
- Avoid premature full-scale development. Starting with an MVP allowed Spotify to avoid the potential losses they could have incurred with a full-scale development from the get-go.
Spotify
Spotify's MVP strategy centered on one key feature: music streaming. Eschewing distractions of 'nice-to-have' features, they developed a desktop app and ran a closed beta to test the market. Their focus during the MVP phase was on securing more artists and developing mobile apps, alongside a freemium pricing model that resonated well with users. This singular focus on streaming quality music led to their successful expansion, including breaking into the US market.
Key lessons:
- Test with essential features only. Uber's MVP offered just the essential feature of connecting users with cab drivers and a credit card payment option. This focus allowed for a manageable test of the market.
- Start in a controlled environment. Launching in a single city allowed Uber to gather early user feedback and decide which app features were worth developing further.
- Add features gradually. Additional features like driver location tracking and fare splitting were added in subsequent versions, showing the importance of gradually building upon a successful MVP.
Uber
Uber's MVP in 2010 was a far cry from what we know today. It simply connected drivers with iPhone owners in San Francisco willing to enable credit card payments on a new app. This basic service met their primary goal of providing affordable taxi services. Uber's evolution into the multifaceted service it is today showcases the effectiveness of their MVP approach in scaling the business and validating their market.
Key lessons:
- VP to validate a need. Airbnb's MVP validated the need for their product. It demonstrates that even if an MVP doesn't immediately attract a massive user base or investment, it can still be a success by confirming market demand for the product.
- Validate different aspects of your startup. An MVP can be used to validate not just your idea or solution, but both. Starting with idea validation is crucial as it makes little sense to develop a solution to a problem that doesn't exist or isn't worth paying for.
These examples highlight the significance of starting with a core value proposition and growing based on market response. They demonstrate that successful MVPs focus on solving real problems in a straightforward, user-centric manner, setting a foundation for scalability and long-term success.
Examples of failed MVPs with key mistakes
Now, let's examine some examples of MVPs that didn't quite hit the mark, to understand where they fell short and the lessons we can learn from them.
Hotjar’s Mobile App
Hotjar faced a pivotal challenge with the launch of their mobile app. Initially conceived to align with user demand for an SDK, the team diverged to develop a mobile app, a product that their customer base hadn't explicitly requested. This deviation from user-validated demand marked the first in a series of missteps. The complexity of mobile app development was underestimated, straining both development and customer support resources.
Hotjar's focus also shifted from their core product to this less critical project. Compounding these issues, the mobile app attempted to incorporate a wide array of features from their web platform, neglecting the MVP approach of starting with a basic, functional version to gather user feedback. Upon its launch in November 2017, the app received a lukewarm response and faced a rapid decline in user retention, primarily due to the absence of a key feature - the ability to play back recordings. This lack of critical functionality led to the app's eventual discontinuation in early 2018.
Key Mistakes:
- Developing a product without validating user demand.
- Underestimating the resource requirements for mobile development.
- Losing focus on impactful enhancements to their main product.
- Straying from MVP principles by not starting with a basic, viable product.
- Ignoring user feedback and needs during development and launch.
Hotjar's experience underlines the crucial need for user validation, resource awareness, focused development, and adherence to MVP principles in product development.
Some more examples of MVP fails
Google Glass
Google Glass, a revolutionary wearable tech, failed to resonate with users due to multiple factors. Concerns about health and safety emerged due to its close radiation exposure to the eyes and mind. The device lacked clear functionality, offering only basic features like quick picture capture and internet searches, which did not justify its high price of $1,500. Furthermore, its limited battery life of only four hours and language compatibility restricted to native English speakers from the US or UK added to its impracticality. These limitations hindered its widespread adoption.
Quibi
Quibi, a short-form content streaming service for mobile devices, failed amidst stiff competition from established platforms like Netflix, YouTube, and TikTok. Despite significant investment, the content on Quibi was considered mediocre, failing to engage audiences. Its pricing model, with subscriptions starting at $5 for basic and $8 for ad-free viewing, was deemed too high for the quality of content provided, leading to its inability to attract a substantial audience.
Juicero
Juicero, known for its Wi-Fi-enabled juicer that pressed juice from pre-packaged pouches, faced several challenges leading to its failure. The product was over-engineered and expensive, initially retailing at $699, with a monthly subscription for juice packs costing an additional $5 to $8. A major blow came when a Bloomberg article revealed that the juice packets could be hand-squeezed, yielding the same amount of juice faster than the machine. This discovery, coupled with internal company turmoil and bad press, led to Juicero's shutdown less than two years after its launch, despite nearly $120 million in funding.
As we've explored the essence and real-world applications of MVPs in this chapter, it's clear that the journey of creating a successful MVP is both intricate and rewarding. This journey starts with a solid foundation in the Lean Startup methodology, guiding our approach to product development with a keen focus on customer feedback and iterative learning. Now, in Chapter 2, we’ll dig deeper into the methodologies and techniques that turn these principles into actionable strategies.
