Every Startup needs
three core components to succeed:
1. A great team
2. A great product
3. A large market that loves the product.
A minimum viable product (MVP) is one of two outcomes entrepreneurs will produce in the ImpactBase Pre-Seed Program. It is also one of the hardest things in business to create.
An MVP is an early version of a new product or service that allows you to collect information from customers about your product/service with the least amount of effort. In other words, it is an early version of your product/service that allows you to conduct tests with customers so you can refine it into a business.
You might go through several MVPs before you have one that proves product-market fit. It’s precisely because of this that you want to balance the amount of effort you put into it – you don’t want to put too much effort in because you might find there are no customers for it and need to start again. At the same time, you do not want to put so little effort in that you can’t test whether the concept works with your customers. So the ‘minimum’ in MVP refers to the minimum effort and features you need to test product-market fit.
So what is product-market fit?
In order to get seed investors interested in your company, you need to prove that you can sell your MVP in enough volume that suggests a greater demand for your business than you can currently fulfil. When you can demonstrate this, you have reached product-market fit.
That means you have developed a product (the MVP) that the market (your customers) is demanding.
How you get to product-market fit is through a cycle of iterations that have four components:
- Refine & repeat
This is a constant process of building MVPs, testing them with customers by measuring things like repeat purchases, referrals and feedback so you can learn what is working and what is not. Then you can refine your MVP into the next iteration and repeat the process until you are at a point where you can prove there is more demand for your MVP than you can currently fulfil.
You’ll want more cash at this point to develop your MVP into a fully developed product (i.e. so you can drop the ‘minimum’ and just have a ‘viable product’) and systemise it into a scalable business.