Many, if not all successful ventures at one point in time had to come face to face with a serious challenge. How do you get investors interested in your startup? One way to do so is to catch their attention with a perfectly designed MVP!
This article will help you with:
- defining key features of your first MVP;
- creating an MVP that is exciting, interesting and worth pursuing from an investor’s point of view.
Your Minimum Viable Product is that very moment between the life and death of your startup. It is the first introduction of your project to potential investors. First impression means a lot, and you will rarely have a second chance to make one. Perhaps you have achieved something valuable with your Minimal Viable Product already. You may even have begun to turn a profit. Well, then you may be in the running to receive funding for your startup!
Read also: 7 Mistakes to Avoid When Developing an MVP
But, what exactly are potential investors looking for? First of all, the prototype must be working, MVP isn’t simply a vague idea on the paper. Perhaps yes, it actually started out like that at the very beginning when you had that wonderful moment of clarity. But now it needs to be something more, much more in fact.
Second, the inherent value of your prototype comes from the very fact that it is actually useful for end users. This will give birth to its first downloads. These very first users are always the most important because they show investors the true potential of your project.
Show the benefits to prospective customers
Is your product an innovation that has no analogs on the market? Or, maybe you want to develop your product in a niche which already has some powerful competitors? In either case, thorough market research is essential.
- Solve their problemsIn the case of innovation, your product has to solve someone’s problem. Creating a product that very few people need may be a mistake. Observe your potential customers. Determine the problems they are facing as well as those they are unknowingly facing. Now concentrate on those painful points and try to solve them. It will make your product essential and practical instead of just mediocre or mundane.
- Find your unique valueIf you want to keep up with the competition, you will need to find that special advantage that will distinguish you from your competitors or even potential competitors. Think about what you have that your competitors don’t. Which innovational approach is your product bringing to life? This is what you need to know to get investors on your side.
Read also: These Mistakes Will Ruin Your Mobile Startup
Figuring out customer’s pain points
Ash Maurya shared his story about how he built his MVP. He and his wife were unable to find media hosting which they considered to be high quality. In order to implement his idea he needed to create a working MVP.
So, he decided to turn to the concept of “Customer Problem Presentation”. This is a scripted interview with typical customers. The goals of the interview are very straight forward. To determine the main problems of the product and then try to find any possible solutions by making your own suggestions and most importantly, listening to theirs. He thought that this was the best way to really hear and understand his customers. This approach ran in the face of traditional surveys which he felt were too rigid.
If you truly want to get an unbiased opinion then the best way to do so is to talk to strangers rather than friends and family. Thanks to this method he was able to find his customers’ real pain points.
Can you briefly describe the problems that your customers are having and how to deal with them? Then you are more likely to get investors on board for your startup.
An interesting thing to mention here is that the difference between what a customer’s needs and the problems that they are having can be quite large. People lie not only to each other but to themselves. Do not succumb to the temptation of simply asking people what they want. Just be observant and try to focus on the unique value of your product and not its main idea only. Then present the most efficient way to reach this value and you’ll be on your way to the top.
- Which features are fundamental for the future product?
- Which features will ensure the success of your product and allow you to capture your target audience?
- What is going to not only help you stand out but leave your competitors trailing in the dust?
- Which features should be better included in later versions to save resources during the absence of a real venture capital?
A thorough and profound talk with your CTO is supposed to answer all these questions. That is why he must be a person you can trust. An unquestionable and experienced expert.
The functions your MVP should be comprised of are the ones which either make your product unique or the ones that provide your customers with something that your competitors are unable to offer them.
Apply the design thinking approach:
Step 1. Explore the possibilities and opportunities that are available.
Step 2. Identify problems and existing solutions.
Step 3. Try to suggest something innovational, something that no one has ever thought of.
Step 4. Among them try to eliminate those that will work from those that most likely won’t.
Step 5. Create prototypes and present them to your customers. Observe, listen and learn.
Step 6. Evaluate their feedback and iterate. Do this, as many rounds as needed.
There are a lot a lot of products on the market which became successful because they dealt with some tiny but compelling and aggravating troubles people had. For example, GetAround is a startup where one person can rent their car to another without having to go through a typical car rental agency. Insurance is not only available but is included. Another example is SmartThings. This startup gives users the ability to control and monitor their appliances and utilities remotely with their cell phone.
Effective MVP’s have brought to life countless apps that we use on a day to day basis. Picturing our lives without them seems even hard to imagine.
Think of the popular taxi app Uber. They saw the demand in the market and offered a product to fill the niche. It all started when the CEO of Uber asked local car drivers if they were interested in participating in something like Uber. 3 out of 10 answers were positive.
Read also: How to develop a taxi booking app like Uber
So they entered the market as a San-Francisco taxi app and quickly spread all around the world. Today they are even adding some extraordinary features, like helicopter taxi.
The Uber experience can be converted into a sustainable development strategy:
- To create a high-quality MVP from the very beginning.
- Be prepared to grow and be scalable. Basic functionality won’t be enough for the users, they will demand more.
- Concentrate on the working side of it. Eliminate all technical obstacles.
Never underestimate a good MVP
Together with your CTO you have determined which features your product needs. Now it’s time to make them turn into a reality. Never neglect the importance of an MVP. You cannot afford losing potential funding due to an unreliable company or inexperienced developers.
Trying to economize here will cause a lot more new expenses. So, be careful with your choice. Examine the companies’ portfolios. Read their feedbacks. Look for companies that have experience with building successful startups from scratch. Avoid the most common mistakes.
Creating a product now has developed into more than just a stack of technologies. You need to make your user experience one of the key factors. It is not enough to just develop your product. When you need to attract venture capital, it involves a lot of work, analytics, planning, risk-solving, etc. This is all achievable only if you start with the right strategy.