MVP Testing

Most entrepreneurs start with a problem statement. They wish to make money by solving the problem that people are facing. Building a product can be a long, challenging and expensive task. Nobody wants to be undertaking the effort with no certainty of whether or not the product would be accepted by the market. In order to mitigate this risk, an minimum viable product (MVP) is built to test the market and ascertain the demand for the solution.

I often find many startups go with a quick and dirty version to potential customers to find out what they think of the solution and if they would be interested in using it. Often the solution is pitched in the absence of a financial cost because it is very basic! When the real product hits the market, entrepreneurs find it hard to get customers to pay for the product. The discount spiral begins and continues down a slippery slope.

During one of the meetups that we were conducting, we were brainstorming some ideas with students at the Vellore Institute of Technology. In a room of 50 students, one of the students came up with the idea for an app, which would be able to show the mess menu. Since their hostel are 7 stories high, they find it inconvenient to come down to check the menu before every meal, in order to determine whether to eat at the mess or go out.

We asked the group of 50 students in the room, how many thought that the problem was worth solving; all of the hands went up. We then discussed what kind of app could be built and the features that would be required in the app. Everyone seemed to agree that the solution was great so I popped a question, “How many of you would pay Rs. 60 per year for the app?”; 2 hands went up!

There are inherently two types of test that the MVP should be able to succeed on.

Testing for behaviour

Every business is based on an insight into human behaviour. The entrepreneur exploits the behaviour to generate an income and a profit.

The first thing that the MVP is supposed to be able to do is prove that the behaviour that one is seeking to exploit does exist. If you are building an e-commerce business, the assumption is that people are ‘lazy’ enough to want to sit at home and shop for products than to visit the shop and buy the product. One of the biggest USP of e-commerce against traditional retail is ‘convenience’. The job of the MVP is to prove that people actually perceive a convenience. This is to test if the expected behaviour is shown.

Are people okay with buying goods from their computer? Are they willing to go ahead with a purchase in the absence of tactile feedback? Are they willing to pay online? Do they like the vast choice being offered?

Testing for value

The next step is to prove that the users see value in the convenience being provided. So is the user seeing enough value to pay money for the convenience being provided. If your solution cannot generate income, the path to sustainability is unclear.

Too often entrepreneurs miss out on testing for value, which arguably is the most important part of establishing an business. The purpose of any business is to create value for the customer and exchange that value for money. The value creation should be apparent for the customer.

Being able to test both of these aspects is critical to being right about the product that is being built. Therefore, an MVP must be a product that can be sold to the customer. The MVP is not a model, it is a product that performs a function in a much simplified manner.