By creating custom software in the MVP (Minimum Viable Product) model, you can verify your initial business assumptions and gather valuable feedback on the product, without building the entire system.
What are the other benefits of building software in the MVP model, and how much does it cost? Keep reading to find out.
What is software in the MVP model and what are the benefits of developing it?
As part of custom software development services for our Clients, SOFTIQ also offers the possibility to create a version of the product in the MVP (Minimum Viable Product) model.
MPV is an early version of the software, created with a minimum set of key functionalities, thanks to which it is possible to verify the assumptions from the software design stage, as well as to collect the first opinions of real users.
The development of the MPV version is an important additional element in the process of building the final system, as opposed to the traditional approach, in which software is developed first and then user feedback is gathered.
The main benefits of developing software in the MVP model include:
1. Saving time and resources.
By quickly validating initial concepts, further development of the project can be planned accordingly. By creating an MVP, companies can quickly test their ideas and confirm business assumptions without investing too much time and money upfront.
One example of how building an MVP can save time and resources is the case study of the Dropbox app. When Dropbox was first launched in 2008, the company built an MVP version of its file-sharing software that included only the most essential features. This allowed it to launch quickly and gather feedback from early users, which helped refine the product. As a result, Dropbox was able to expand quickly and become one of the most successful startups of all time. The estimated cost of developing the MVP was about $15,000, with an implementation time of about three months.
Another example is Zappos, an online shoe retailer. Zappos built an MVP version of its website that featured only a few brands and styles of shoes. This allowed Zappos to test its business model and gather customer feedback before investing in inventory and logistics. As a result, Zappos was able to validate its business model and become a billion-dollar company, while Zappos’ MVP was created, like Dropbox’s, in just three months and cost about $50,000.
2. Quick feedback and faster time to market
For some projects, a functional version of the MVP can be created in just a few weeks, giving companies the opportunity to quickly gather user feedback and decide on further development of the project.
By optimizing further product development, the launch of the final version is also accelerated.
A few examples of quickly created MVP versions of well-known programs are:
- Buffer – 7 weeks,
- Groupon – 2 months,
- Instagram – 2 months,
- Zappos – 3 months,
- Slack – 4 months,
- Mint – 6 months,
- Spotify – 6 months.
3. Getting to know user needs
By developing an MVP, your company can get a better understanding of user needs and make sure that a full-scale project makes business sense.
In the case of systems or applications that target external users and should bring profit to the company, it is crucial to determine what features the product should have in order to be unique in the market.
This is worth keeping in mind, because according to data published on Statista.com, in 42% of cases, the reason for the failure of startups that created mobile apps was the lack of a market need, and in 14% – ignoring the needs of users.
Therefore, before you create a new product and start any software development activities, it is worth making sure that your idea makes sense and there is a market demand for it. A great way to do this is to build an MVP version of your software.
4. Reduce errors and minimize risks
By being able to test initial concepts when developing the MVP version of the software, the risks associated with developing a system in the classic model are significantly reduced.
This is because in addition to the extra work needed to correct errors resulting from poor requirements specification, companies that start complex IT projects without carefully analyzing their business needs and reflecting them in the documentation risk that the final product will not meet their expectations.
The cost of mistakes made at the stage of defining software requirements is significant – according to data cited by Donald Firesmith in his article “Common Requirements Problems, Their Negative Consequences, and the Industry Best Practices to Help Solve Them,” requirements errors cost companies more than $30 billion a year in the United States alone. It is also important to consider that the more advanced the project is when the error is detected and attempted to be resolved, the higher the costs will be.
According to a study published by Roger S. Pressman and Robert B. Grady, the cost of fixing a bug after the system is up and running is 80 times higher than if the bug is fixed at the system requirements definition stage.
Considering how much the costs of system modifications, fixing previously undetected bugs, and changes in functionality increase in the late phases of a project, it is certainly worth considering whether developing an MVP version would be cost-effective for your project.
5. Reduced development costs
In the case of the MVP model, the development costs of the first, functional version of the software are lower because only the most important features are considered.
Also, if the project continues, further system development costs are lowered, because the data collected on groups testing the first version of the software allows us to optimize the work schedule and drop features that are not reasonable or useful from the users’ point of view (and therefore do not make business sense).
Using a few examples, we can see how much some of the currently successful companies have paid for their MVP versions:
- Buffer – $5,000,
- Groupon – $15,000,
- Dropbox – $15,000,
- Airbnb – $20,000,
- Zappos – $50,000,
- Slack – $50,000.
6. Validation of the business idea
In many cases, companies fall into the trap of overestimating the importance of the problem that the software or application they are developing is supposed to solve. As a result, they risk that a system based on unproven business assumptions will not find an audience willing to buy it.
In this context, developing an MVP version of a system provides an opportunity for early validation of an idea, through interaction with real users. It allows us to verify whether the problem we want to solve is as meaningful to potential customers as we assume and whether (and how much) they are willing to pay for the solution we offer.
A good example of verifying the business validity of an idea is the case study of Airbnb. This online booking platform connects travelers with hosts who have free rooms or apartments for rent.
When Airbnb was starting up, the founders created an MVP consisting of a simple website where users could rent inflatable mattresses in a private apartment during the IDSA conference in San Francisco, when all the hotels were occupied:
This allowed us to test assumptions about customer demand for this type of accommodation, and it quickly became clear that users of the site expected more accommodation options, such as private rooms and entire apartments.
Thus, thanks to a straightforward MVP, it was possible to quickly and relatively inexpensively verify the business case for the venture, giving the platform’s founders confidence in further investment in developing the tool.
7. Better allocation of resources
By developing simple MVPs, containing only the basic features necessary to test the product’s capabilities and gather initial user feedback, software developers can use resources more efficiently from the early stages of the project.
To illustrate how few key features are sometimes enough to create a functional MVP, responsibly allocating resources throughout the project, in the table below we have presented some examples of the first versions of well-known software, with descriptions of the main features:
|Software||Description||The main features of the MVP version|
|Dropbox||Cloud storage and file sharing service||– uploading files – users were able to upload files to their Dropbox account using a simple web interface, |
– file sharing – users could share files with others by sending them the appropriate link,
– file synchronization – after downloading the Dropbox desktop client, it was possible to synchronize their files between devices
|A social networking platform that allows users to post short messages||– tweeting – users could post short messages (up to 140 characters) through a simple interface, |
– following – the system gave users the ability to follow other users to see their tweets on their timeline,
– timeline – users could see tweets from users they were following on their timeline
|Airbnb||Online accommodation booking portal||– listing – hosts were able to create listings for their properties themselves using a simple interface, |
– booking accommodations – guests could search for and book accommodations using the website,
– messaging system – hosts and guests could communicate with each other using a tool built into the website
8. Greater investor confidence
By creating an MVP version of its product, a company can test it by interacting with real customers, gathering feedback, and make improvements based on that feedback.
Such an action sends a clear signal to potential investors that the company has taken the time to understand its target audience and is trying to create a product that meets their needs.
The positive feedback received from the first customers shows that there is a demand for the product and that the first users are satisfied with its basic functions.
For many startups, creating an MVP version may be the only solution to gaining the trust of investors, who are often reluctant to support ventures whose business assumptions have not yet been verified in market realities.
9. Better marketing strategy
By developing a basic, functional version of the software and gathering initial feedback on what elements are most important to Customers, a company can develop a better marketing strategy for the final product.
This approach works especially well for startups and small companies with limited resources. They should test their assumptions about Customers’ needs and preferences as thoroughly as possible, identify the product’s most important differentiators, and refine the marketing message accordingly before investing and launching the product at full scale.
The aforementioned Dropbox is a good example of how developing an MVP can help companies create a better marketing strategy. When the software was first launched in a truncated version, it quickly became clear that users wanted more advanced features, such as automatic file synchronization and versioning.
By introducing these features into its product and adjusting its marketing messages accordingly, Dropbox was able to differentiate itself from the competition and attract more customers.
10. Increased productivity
The decision to develop software as a Minimum Viable Product (MVP) has a direct impact on productivity gains, as it allows companies to focus on the most important functions and avoid unnecessary work.
One of the main advantages of using the MVP approach is that it allows companies to prioritize work and focus practically from the beginning of the project on the most important, from a business point of view, functions. This helps them avoid wasting time and resources on unnecessary work that does not add value for the customer.
For example, a company developing a new mobile app might start with an MVP that includes only basic functions such as login, search, and messaging. Once the first user feedback has been gathered, the further development plan for the project will already depend on the users’ actual needs and expectations, significantly reducing the amount of work required.
How the MVP version is being built in collaboration with SOFTIQ?
Creating an MVP version of custom software is an iterative process that involves building a product with the minimum set of features required to solve the end user’s problem.
Our ultimate goal is to develop the system quickly and qualitatively, based on a proven process, and get feedback from the first users. This information is then used to improve the product and add more features to meet the needs of the audience.
The success of the custom software development process is influenced by many factors, and its creation requires a large investment. For this reason, any opportunity to minimize the risk of failure is invaluable. Contact us and check why it is worth deciding on MVP software development service from SOFTIQ.
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