Starting your small business with an MVP
Successful entrepreneurs start their business with a minimum viable product.
Starting a business with a minimum viable product is an excellent strategy. A minimum viable product is one that will satisfy the essential product benefit for your final consumer. This MVP strategy is a good way to test market your product before making significant investments.
Launching a small business with a minimum viable product is launching your business in a very lean state. A lean start-up is preferred because if your product does not produce enough cash to support your endeavor, you have only lost a small amount in start-up funding.
MVP start-up is a valuable strategy to use for any new start-up business. Some business start-ups do massive engineering on product attributes and product features, all without knowing what the consumer really wants. The engineers create what they want not what the consumer wants. Then, when the business actually begins selling product, the business owners discover what product features the consumers actually want. If this is not a direct match, re-engineering must happen.
In an MVP start-up, the product is in a minimum viable product state. This means that the product will do what it is intended without frivolous features. For example, if your product is a new telephone answering service, you would start offering your services as soon as you can have your client’s phone number transferred or forwarded to your number. That’s it! You don’t need an office. You don’t need fancy telephone equipment. You don’t need a fancy computer network. You simply need a phone to answer client’s calls.
In contrast, a phone answering service start-up in a traditional sense would purchase or lease an office building, purchase telephone routing equipment, purchase a large computer network, purchase telephone equipment & headsets, hire employees, and then go out seeking clients. All of this start-up expense just have a phone call forwarded to another phone.
As this example shows, an MVP start-up is very lean and during the start-up phase, minimal capital investment is made, and product refinement can happen during the delivery of the product to the final consumer. This lean start-up strategy will work for almost any new business.
Paul J. Werner is a Michigan State University Extension Educator from L’Anse, Michigan. You can obtain free business counseling by registering with the MSU Product Center. Werner has many years experience in small business ownership and entrepreneurship. He and his wife currently own two small businesses in the Upper Peninsula of Michigan.