Understanding The Value of a Minimum Viable Product
When it comes to commercialising an innovative idea, as business owners we often fill driven to have everything absolutely perfect before we feel comfortable releasing that idea to market. But is this the wise way to go about it?
Of course, you may have put time, effort and money into your idea and feel very attached to the outcome. It seems to make sense to have your product as perfect as it can be the first time the market sees it; why in the world would you release an inferior product and potentially “turn the market off” by its obvious flaws and deficiencies?
Why is Releasing an Imperfect Product a Smart Way to Go?
Before we demonstrate why, in fact, you may consider releasing an inferior product or technology, let’s put some definitions around the context of when this strategy might be applicable.
Getting Into an “Overlooked” Market
Firstly, by stating an early release to the market, what we mean is a controlled soft launch, usually to the early adopters and lower end users, who have not been able to access your type of innovation previously. That could be due to substitutes or competitors’ products being price prohibitive or that competitors simply have not been marketing to lower end users. An example of this could be a piece of software that previously has been for the top end of town. Take a music production software program for example; initially, these software programs were so expensive only professionals like music studios could access and pay for the exorbitant license fees. Today, anyone can access multiple programs for as little as $30 per month for high-end programs or even $5.99 for a simple but effective app. Students, enthusiasts, amateur music lovers and professionals alike can produce their own music on a laptop with it being a relative breeze to use. This is what we call a “latent demand” market. A not-so-obvious market or an “overlooked” market that has been previously “locked out” of having access but all of a sudden are able to pay a low-cost subscription, and often we are talking about millions of potential users worldwide.
Learning From a Minimum Viable Product
Secondly, what we are talking about in any early release is what is known as the “Minimum Viable Product” (MVP). Literally, it is the minimum amount of investment, effort, functionality that makes your product “viable” to ……………… do the job! Bells and whistles and even the ever important “UX” or user experience functionality may be missing. But why? Why would we release an innovative product or technology to a controlled small group of potential users, where the product is at its minimum viable functionality? Our reasoning is to learn and learn fast!
When we talk about innovations, whether they be sustaining innovations (an improvement on a currently existing product) or a disruptive innovation (offering a completely different experience to low-end market users), one of the most important aspects is about “learning”. That is, learning what the new market likes, dislikes, behaves and how they use your product or technology. From these learnings, you can then begin to evolve the product and add features and improvements based on the feedback loop you are receiving from these early adopters. The thing is, with innovations, the greatest risk of all is to assume you know what the market will want.
That is why beginning with a minimum viable product and then testing it with early adopters, who are enthusiastic in being able to access your product or technology, allows you to refine and add features and benefits that the users are telling you they want, need and value. Far too many innovators invest significant resources and time into trying to perfect their product or technology, only to find that many of the costly features are not valued by the users. This is an incredible risk and if you have got it wrong (which is the case more than 80% of the time), having used all your resources to get it to market, means the project can be dead. As opposed to spending the minimum amount to then begin your testing and refining.
Have Your Commercialisation Roadmap In Place
So, in short, do not always feel compelled to build your perfect product before releasing it into the market, but absolutely be sure to have your commercialisation roadmap in place to then be able to build, measure and learn to ensure that your ability to scale and grow your market rapidly is well laid out.