Eric Ries, the author of Lean Startup wrote: “We must learn what customers really want, not what they say they want or what we think they should want.”
Well, unless you have a swimming pool filled with money which you can spend on professional customer research, you would likely start small and see if customers really want your product.
The concept of Minimal Viable Product aims to ensure that the strongest features of the app respond to your customer needs while saving you time and money. Adding features and functionality to a product gradually, in parallel with working on responses from customers, is a way more effective approach than launching a full-featured product.
Previously, we wrote about what MVP is and is not and highlighted a few successful examples. The reason why we keep writing on this topic is that we want to help you launch the best apps possible, and if you change the way that you start product development, you will drastically change the final result.
So here are the most common challenges your startup can easily beat by building an MVP first.
Top 5 typical problems of tech startups
Problem #1 Trying to serve everyone
Typically trying to build an application to engage everybody is an unpromising backwater. Your application should be focused on a target audience (TA) that would love it. So, if you create an app that meets the TA compelling needs, you have a much higher chance they will enjoy it, use it constantly and spread the word about it among their communities (a lookalike audience).
The author of the book Zero to One Peter Thiel recommends startups to focus on the niche market where the opportunity to gain the monopoly position is much higher.
Problem #2 Being overwhelmed with to-do lists and nice-to-have features
The next danger is killing a good product with too many additional features. Tackling problems that are interesting to solve rather than those that serve a market need was cited as the No. 1 reason for failure, noted in 42% of cases.
Seeking to launch a full-packed software sensation from the start is very tempting. But overwhelming.
It overwhelms your team with thousands of high-priority tasks, it overwhelms you as the owner with how big your dream is… And it overwhelms users with the complexity of the solution you delivered.
Instead of improving the basic function of your solution, additional features usually tend to complicate the user journey.
CB Insights states that a lack of usability is among 20 reasons why a new product fails.
Strive to make your product as simple and user-friendly as possible.
The tag line of Apple’s first marketing brochure was “Simplicity is the ultimate sophistication”. And, what a wonder, it is still relevant, although more than forty years have passed.
As Steve Jobs once said,
It takes a lot of hard work to make something simple, to truly understand the underlying challenges and come up with elegant solutions.
So, where in your project can you scale back and take some of the pressure off?
Problem #3 Being unsure of an app primary purpose/function
A startup based by entrepreneurs Chris Koch and Chad Stephens was forced to rethink and rebrand its product, pivoting to Fillr because the initial purpose of their app (called Pop!) turned out to be unclear for their users.
Pop! was a mobile app (something like a ‘personal data wallet’) allowing users to store, manage personal data they provided online and auto-fill online forms over multiple pages in one click.
Soon the product turned out to be complicated, but one feature seemed to be very appealing to clients, namely, an autofill for mobile that made shopping easy and fast. That is how Fillr was born.
Today the solution fills out online forms in seconds, knowing exactly what and where to put.
Investing in a blurred idea leads to adding new features which have little in common with the existing ones. That erodes product value.
Work out a well-defined primary function serving to specific TA from the start to steer clear of future challenges and money loss.
Problem #4 Struggling for Investor support
When startup can not pump into its own money or runs out of it, Investor funding becomes a critical problem.
It is stated that over 500, 000 startups appear in the United States each year. Very few of them actually receive funding from Angel investors or venture capitalists (VC): about 30,00 startups are supported by Angel investors, while only 1, 000 – by venture capitalists.
The rest are forced to use savings of friends and family for the development of their new entrants.
According to Josh Lerner from Harvard Business School 90% of them fail to find financial support after investing their money and suffer defeat.
Problem #5 Underestimating the role of smart marketing
If you believe that the app should become popular by itself, don’t question why people don’t use it. To attract and retain customers, your business needs to understand the value of marketing.
Seek out a core group of early adopters from your target audience and engage with individuals to convince them to try out your product.
It takes time, but this promotion strategy (direct sales) will serve you with an early feedback and will open insights for further marketing plan.
The early adopters of Airbnb were hosts and guests in New York City. Brian Chesky and Joe Gebbia flew to New York every week to meet with hosts. They wanted to attract more customers and help existing hosts make more deals. They trained hosts to price listings better, take quality photos, and more. They also asked hosts to recommend their product to those who might be interested. They proceeded to more advanced tactics only after their client base grew.
Because of the limited resources, whether it’s time, money or talent, you may delay all the marketing activities. If you still think doing marketing along with your project is challenging, you should try how challenging it is to grow a startup without it.
Let’s face today’s reality: you should always be marketing, even before you have a finished product.
So, now you are forewarned. Let’s take you to “forearmed”.
Why does MVP app suggest the better way?
The good news is that MVP may become the antidote for startup challenges and a lifesaver in your business journey because:
#1 It helps you focus on a niche market
As soon as you define your target audience, MVP will give you an opportunity to test the product with real users. You’ll get an in-depth understanding of whether users like your idea and whether your product replies to the market demand.
The collected feedback from the end customer allows you to:
- validate your core value proposition;
- prepare the revenue model; or
- segment your target audience based on requirements.
Before moving all-in, you have a priceless opportunity to understand whether people you target are willing to pay for your idea, and what exactly you can do to serve them better and grow faster.
A well thought out Minimum Viable Product is able to provide you with more information and three-dimensional feedback than any kind of business-plan or stand-alone survey.
#2 It let’s your team focus on what’s most important
As already mentioned in our previous article on MVP, the critical point of every Minimum Viable Product is that it contains a minimum set of features which makes it viable and allows to launch as soon as possible.
A limited scope of work gets your team unstressed and more grounded.
On top of that, as you do not have to build every nice-to-have feature, MVP app development saves costs in both design and implementation. This way you’ll be able to use the rest of the budget on the new features your target market really wants.
#3 It helps to validate the primary function
No internal testing of a product is able to show you how the end user will work with it. Experiencing real user testing is possible only by putting the product in the market ASAP and measuring whether its primary function resonates with TA expectations.
Here it is, validation with minimum risks!
#4 It helps to attract VC and Investors
If you want to attract business investors to your startup, it is critical to understand what they usually take into account when deciding whether to invest. Here’s what one of the German TOP-10 VC funds, TA Ventures, consider first:
- Investment opportunities (including market size, growth potential and competitors).
As a rule, investors count the potential revenue for the following 5 years. They need to decide how much money the company requires at the first stage of development, and whether the addressable market is able to return the money in form of revenue.
The founders are the first thing most investors evaluate. A team, especially founders, should work like a well-oiled machine and be experts in their field.
The founders of collaborative blogging platform Niume, Daniel Gennaoui and Francesco Facca, have this advice for startups who are on the hunt for success: “First, you need a strong founding team with complementary skills that can actually deliver on their promises. Second, you need a working minimum viable product (MVP), showing that there is traction and interest for the product and people willing to use and pay for it,” the founders said.
And this advise leads us to the next point:
- Product itself (and clear understanding of how it can win sales)
The project presentation usually lasts for 10-15 minutes, therefore, you need to express your ideas as informatively and concisely as possible. Having a working MVP at hand multiplies chances to establish trust with your potential business angels.
Investors don’t tend to pour cash into abstract idea of a successful app. Your idea isn’t that important to them, but a validated idea is the best thing you can offer.
So make your product work with MVP approach and give them a reason to feel like they are really missing out (FOMO) or losing a chance to make money if they don’t take a look at your company and your pitch.
#5 It frees up time and money for marketing
As Eric Ries said, “The one and the only way to win today is to learn faster than anyone else”.
Releasing your app in a fast-track manner benefits to building relationships with customers and creating the client base earlier.
Building MVP first allows companies be agile through their processes, including marketing. Each new iteration of product development lets your startup gain valuable insight and seamlessly adapt to changing market demands.
The tech market is turbulent. Thus, you need to remember that your marketing effort is not a one and done.
As soon as you polish your idea and compose a diverse team with different skill sets, it’s time to build your product.
An MVP app development allows you to circumvent obstacles, get primary feedback from early adopters, and make smarter decisions on further investments.
Just focus on what matters most and do one step at a time.
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