Today, there's no shortage of discussion about the need for Minumum Viable Products, or MVPs. However, where MVPs might fit in your own product development process is often unclear. Remember that rather than validate your product itself, an MVP validates whether the need for your product exists, in the first place.
But if an MVP only validates the need, then how do you find the best solution to solve that need?
Every individual need can be filled with many possible solutions. So it's up to you to choose the best solution for both your customers and your organization. Finding the right solution is where a Minimum Marketable Product, or MMP, comes into play. While an MVP validates a specific need, an MMP validates your solution for filling that need.
Discovering Your Solution
A great way to discover that solution is to create several lean MMPs, each of which can be validated separately. How your users respond to each MMP can help you decide which MMP may lead to the best solution to your problem, and which MMPs may not be the right fit.
However, an MMP is much more than a vehicle for merely validating how your users respond to your solution; it can also validate the viability of actually delivering that solution to the market.
For example, your MMP might validate concerns such as the best distribution channel for your product, the technology stack for building your product, or the hosting platform on which your product will reside.
However, in addition to delivery concerns, your MMP is also an excellent vehicle for validating the broader economic concerns of your product. For example, your MMP can help you project the total capital expenditure required to bring your product to market. Armed with this information you can better decide whether investing in your product is likely to yield a positive return for your organization, or if there are other opportunities out there that may yield better results.
But remember that your investment in a product doesn't stop when that product ships. A successful product is a long-term commitment, and that commitment will likely require an ongoing operational cost to remain viable in the market, such as ongoing maintenance, customer acquisition, or hosting costs. The lessons that you learn from your MMP regarding concerns such your chosen technology stack or hosting platform will better inform your projections for the operational expenses required to keep your product happy, healthy, and humming along in the market.
Seeing This in Action
To better appreciate where an MMP might fit in your product development strategy, let's look at an example.
Imagine that you're interested in creating a product to help food connoisseurs find great new ways to indulge their palettes. You've already gone through several rounds of MVPs and have discovered that a validated need exists to connect adventurous diners with new and ambitious restaurants in their area. However, identifying the problem isn't enough, now you need to find the solution.
Learning From Your Early Experiments
For the first version of your MMP, you attempt to solve this problem with a single mobile app targeted at both restaurant customers and restaurant owners. While restaurant customers loved the convenience of a mobile app, especially the ability to find new restaurants while they were already out for the evening, restaurant owners struggled with the user experience of a mobile interface. In particular, many restaurant owners found the process of updating their own listing using the small form factor of a mobile device frustrating.
Learning from this experiment, in the next version, you decide to split the experience for restaurant customers and restaurant owners across two separate products. Specifically, you decide to keep the restaurant customers on the mobile experience that they responded to so well, but move the restaurant owner's experience to a traditional website that can be accessed more easily from a computer. This larger form factor and more familiar user experience, allows restaurant owners to update their listings more efficiently, which leads to increased engagement with your platform.
Looking Beyond the Product
However, the first two versions of your MMP have only helped to discover the best platform for filling the need identified by your MVP. Whether that platform is economically viable, remains to be seen. Moreover, this is exactly what you hope to solve with the next version of your MMP.
Early user interviews ruled out the possibility of your restaurant customers paying for access to your platform since from their perspective; your platform is simply an additional form of advertising benefiting the restaurant owners.
This realization places the burden of paying for your service directly on the shoulders of your restaurant owners. However, exactly how they are willing to pay for that service remains to be seen.
In the next version of your MMP, you decide to test a pricing model based on bulk advertising rates. In this model, your customers pay a bulk advertising rate, similar to the rate that they might pay for an ad in their local newspaper, to be listed in your app. The familiarity of this model, coupled with favorable pricing, leads to strong early adoption by your restaurant owners. However, the initial findings from this MMP reveal that while this model may be popular with your restaurant owners, the revenue that it generates is simply too small to support your platform. Therefore, you're forced to eliminate this pricing model as economically unviable.
Finding a More Promising Path
The results of this experiment show you that to support your platform, you need to charge premium advertising rates. However, your restaurant owners are resistant to this as they find it challenging to actually measure the impact of their advertising dollars on their business. But rather than give up, this revelation actually leads you to the underlying hypothesis for your next MMP.
In your next MMP, rather than charging your restaurant owners an up-front fee to appear in your platform, you instead charge them a referral fee for every customer who expresses an intent to make a reservation with their restaurant after discovering it in your platform. In this model, you present restaurant customers with a button in their mobile app which allows them to click through to a restaurant's preexisting online reservations service. This click-through allows you to track referrals of restaurant customers who show an intent to book with the restaurant, which demonstrates clear value for your platform to the restaurant owners and justifies the premium advertising rates necessary to evolve your offering from just a compelling product to an economically viable and sustainable business.
Delivering a Viable Product
While your early MVPs can be very adept at identifying a need that's ready to be filled, MVPs often aren't refined enough to identify what product will best fill that need in a sustainable way.
However, by building on your early MVP experiments with a series of MMPs, you can more effectively learn which product will best meet that need, for both you and your customers, as well as determine how to deliver that product in an economically viable and sustainable way.
This is because in the competitive world of product development, simply identifying the need is never enough. To truly find success with your product, you have to identify the solution that will enable you to build a successful business for the long term.
Want to learn more about how to create great products with your teams? Check out my course, Agile in the Real World from Pluralsight, for tips and techniques to help your team deliver great products to your customers.
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