Female presenting to group

Build New Customer Propositions Using a Minimum Viable Product

Build New Customer Propositions Using a Minimum Viable Product

According to the Standish Group, 64% of features in products or services are never or rarely used by customers. The Harvard Business Review edition titled ‘Failure’ makes the point that about 75% of consumer packaged goods and retail products fail to earn $7.5 million during their first year. The numerous reasons contributing to product failure included:

  • Insufficient feature differentiation – buyers are not swayed into buying the product
  • Inadequate customer education – buyers don’t see or understand all of the innovation
  • The product is revolutionary but there is no market for it
  • Real-world use of the product does not live up to marketing claims

The Minimum Viable Product (MVP) is a process that provides a scientific approach to developing new products and services. It ensures inclusion of only those features that customers value. It embeds customer insight early on in development, before new features are added and it dramatically reduces the time to a successful launch compared with more traditional product and service development approaches.

Build Your MVP

Products and services that have been built following an MVP process include Dropbox, Airbnb, Groupon, Twitter, and Spotify. The development of MVPs can mean that developers, business owners, customer researchers, marketers, and user-experience designers all work in a close knit team. It can also be created by one or two people. For example, what can be termed ‘the MVP for Airbnb’ was the founders renting their loft as cheap accommodation for conference attendees who could not get hotel accommodation. They took pictures of their apartment, created a simple website, and this resulted in paying guests.

MVPs differ dramatically from more traditional product and service development processes. These old approaches, at best, usually centre on market and customer research, competitor analysis, a long technology development phase which is focused on highly evolved features or product perfection as some people call it, and then the marketing launch of a fully developed product or service. If the new product or service fails, it has cost the company significant sums of money and has resulted in a huge waste of time.

An MVP process is centred on understanding likely customer uptake and the features that customers value. It is a process focused on embedding learning. The MVP will aim to provide the minimum product or service features that can be validated by real customers using that product and it will test the fundamental business proposition as well as product features, design and technical questions. On the basis of real-world customer tests and insight, the features of each product or service will undergo extension, alteration, or deletion.

How You Do It – User Stories Drive Features and Functionality

In the MVP process, requirements specifications that are usually written by business leaders and analysts and are then handed to developers are replaced with a combined team working together to develop User stories.  User stories are owned for the business by the ‘Product Owner’.  They convey the required product or service features and functionality to be built in during development. Usually they are written on cards in the form of a statement – for example ‘As a [insert type of user or persona], I want [insert a goal] so that [insert an outcome]’. The features and functionality should follow what are termed the 3 Cs: Card (the medium the user story is written on); Conversation (understanding and embellishing the story); and Confirmation (the validated user story). Their origins lie in eXtreme programming, a type of agile methodology.

Product Backlog Determines the MVP

The ‘product owner’ owns the product backlog and this is essentially a prioritised list of user stories. The product backlog has a crucial role in determining the Minimum Viable Product as it should convey the highest value user stories but with a caveat that there is a need to build within short development timeframes. This is where science meets art.

Build the MVP by Sprinting

The user stories are built by development and user design resources in a series of sprints.  How many sprints and over what duration will be determined by each company deploying an MVP process for product development.  Commonly 6-10 user stories can be developed in one sprint with one sprint lasting from 2 – 6 weeks.  Sprints will be intensive, involving daily stand-ups to assess progress and to plan the day ahead.  The absolute focus is to build a new service or product with minimum testable features and functionality.

MVPs can literally be anything but usually they focus on the creation of something that customers can use and interact with in the real world. Twitter’s first prototype was used as an internal service for employees to keep up-to-date with what the company and its employees were doing. Spotify launched, with a single feature, streaming music from a home page, and customers started to use this, proving the proposition before developing further.

MVPs Validate Learning

So getting the MVP out quickly to be used by real customers is key. The MVP is not a highly evolved product or service; it is not product perfection. The goal is to help the organisation decide what is the right thing to build for customers, whoever they may be. It is not about launching a fully rounded, highly functional product or service and then seeing if people will buy it.

The MVP provides validated learning that informs the company on what things the customer will buy. When a company has this real-world learning, it moves with confidence into a beta launch or to finesse added features, change the proposition dramatically, or sometimes walk away. The whole objective of the MVP to is to obtain maximum real-world customer validation with the minimum of business effort.

Mark Cox

Author: Mark Cox

Mark Cox is a Digital Consultant and Advisor. He works as part of DXC Technology Advisory and Consulting Team. Mark has extensive experience in working with clients, designing and implementing digital transformation projects.