The MVP theory - The Power of Minimum Viable Product (MVP) Theory

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What is MVP?

The concept of MVP (Minimum Viable Product) was first proposed by Eric Ries, published in the Harvard Business Review, and elaborated in his book "The Lean Startup".

In short, MVP means that when you are developing a new product, instead of pursuing perfection from the start, you should create a basic usable prototype at minimal cost to validate its value and feasibility. Then, you can continuously iterate to improve the details.

As society evolves, people face various new problems and generate new demands. Meanwhile, businesses in the market actively provide solutions for profit. The intersection between the lowest-cost solution and the problem to be solved constitutes the MVP.

What is the use of MVP

People often say that entrepreneurship is a life-and-death struggle, and it's best for ordinary people not to take risks. Compared to starting a business, most people would rather stay comfortably in their jobs, repeating the same tasks every day.

But in fact, entrepreneurship isn't that difficult, as long as you can grasp the correct methodology; the difficulty lies in shifting your mindset. Entrepreneurship is simply a process where people continuously collaborate and develop, providing greater value in line with the times.

MVP, the Minimum Viable Product, is the most basic execution plan in the entrepreneurial process. In my opinion, entrepreneurship revolves around three core keys:

Learn from those with significant achievements: Learning from those who have already achieved results is crucial. Avoid trying to be the first to attempt something; instead, learn from the best in the industry. Observe, imitate, accumulate experience, and avoid self-conceit and baseless imagination. If you cannot find successful cases to emulate, it's best to quit early, as the track might be a false one.

Grasp trends and act accordingly: It's crucial to grasp current trends and act accordingly because only timing can create heroes. For example, artificial intelligence is currently one of the hottest topics and one of the tools that changes people's lifestyles. Now is the best time to innovate products using artificial intelligence. In the future, artificial intelligence will permeate every aspect of people's lives. By then, large companies will have already occupied high-quality projects, leaving small entrepreneurs with slim chances.

Trial and error with minimal cost: Trial and error with minimal cost is the key guiding principle. The MVP (Minimum Viable Product) we are discussing today is the core means of trial and error with minimal cost. Typically, the process from research, design, development to market promotion is long and full of uncertainty.

Investment guru Charlie Munger once said, "If I knew where I was going to die, I would never go there." Actively trying with the minimum cost allows you to understand what is wrong by stepping into pitfalls. Knowing "what not to do" is sometimes more important than knowing "what to do."

The three core keys of entrepreneurship actually revolve around "minimizing costs" to avoid pitfalls, seizing trends, learning from successful individuals, following the correct direction, and then moving forward based on the footsteps of predecessors. MVP emphasizes using the lowest cost and minimum effort to preserve strength, find out where the pitfalls are, and thus find the way forward.

So, what is MVP? How can we accomplish something with the least cost?

The correct MVP model

Ineffective MVP

Pursuing completeness: Fully developing all functional modules, engaging with potential customers, and attempting to sell at a high price, while continuously modifying product features and pricing to achieve product validation.

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Example: Joe Doe developed a social payment app that includes calling and tipping features. All feature designs originate from his own ideas and logic. Joe Doe visited multiple companies to promote this partially completed app. Many companies expressed satisfaction with the product but found the price too high, so Joe Doe removed some features, lowered the price, and reintroduced it to the market.

Effective MVP

This is a more common MVP method: approaching target customers with a partially formed product at a low price. If they accept it, the product is validated; otherwise, it fails, but it doesn't hinder the project's progress.

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Example: Joe Doe developed a social payment app that currently only has text communication functionality, with voice calling yet to be completed. Joe Doe wanted to know if this approach was feasible, so he directly visited multiple companies to promote this partially completed app. The market feedback was positive, with some companies even eagerly requesting Joe Doe to add more features as soon as possible. Joe Doe thus earned his first income and continued development.

It's important to note that MVP (Minimum Viable Product) does not entail delivering a partially usable product to users.

Let's assume your product vision is for a high-end travel tool, like a small car.

Following the traditional product design approach, we would gradually design features such as wheels, axles, shell, power unit, interior decoration, etc., ultimately resulting in a complete product. However, with the MVP approach, we might start by creating a small scooter or bicycle to gauge user acceptance of the travel tool concept. If users approve of our product concept, we can then proceed to produce more advanced and complete motorcycles, or even small cars.

The traditional product iteration approach is costly, slow, and risky. Moreover, products manufactured at high costs may not necessarily gain user acceptance. The advantages of the MVP strategy lie in its low trial-and-error costs, fast speed, and low risk, meeting the needs of rapid product iteration.

The four elements of MVP

Grasping Key Steps Creating a perfect product isn't accomplished overnight, but some key steps are crucial. During this process, creating a prototype and conducting evaluations and tests are indispensable. Key steps refer to critical stages or tasks in the product development process. Imagine you're designing a new electric car. In the process of designing an electric car, key steps may include: Prototype Manufacturing: Creating a physical prototype is a crucial step in validating design concepts and functionality. This helps the design team and engineers better understand the car's appearance, dimensions, and overall feel. Evaluation and Testing: Evaluating and testing the prototype, including tests for key performance indicators. These tests can verify if the car's performance meets design standards, such as battery life, acceleration, and range. Collecting User Feedback: Collecting user feedback during prototype manufacturing and testing is crucial. This helps the design team understand users' perceptions of the car's appearance, features, and performance, guiding subsequent product improvements and optimizations. It's worth noting that different users may have different needs for the product. Sometimes, balancing these needs can be challenging. However, through continuous market testing and feedback collection, you can gradually refine the product to better align with user expectations, ultimately achieving a more intuitive and efficient Minimum Viable Product (MVP).

Integrating Objective Laws Moore's Law states: When the price is constant, the number of components that can be accommodated on an integrated circuit doubles approximately every 18-24 months, and performance doubles as well. Therefore, when designing integrated circuit product solutions, designers often follow this developmental law and leave some margin for selecting core chips. When making decisions in life, combining the objective laws of things, making estimates, and preparing reserve margins in advance will reduce your trial and error costs.

Not Dwelling on Sunk Costs Many times, we've invested so much manpower, resources, and capital that our reluctance to accept these investments restricts us from making effective decisions for the next steps, leading us further down the wrong path. The best practice is still to base decisions on absolute facts, conduct thorough research and communication, and once design indicators are found to not meet the final market requirements, adjust the plans or directions as soon as possible.

Consistency in Iterative Direction A common situation is when two generations of products designed during the iterative process have completely different structures and concepts, lacking consistency, which essentially means starting the process all over again. A better approach is to modularize and standardize technology selection, hardware frameworks, and structural design as much as possible. Chip upgrades, feature upgrades, and program code can be reused on this basis to reduce redundant work. Standardization allows for reuse.

What is MVP?

What is the use of MVP

The correct MVP model

Ineffective MVP

Effective MVP

The four elements of MVP

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