Define your Minimum Viable Product (MVP) then work out your start-up costs
Over half of UK start-ups fail within the first five years – mostly due to poor financial planning. If you’re creating an app or website, it’s essential to define your minimum viable product (MVP) to help you calculate your start-up costs and determine whether the app, product or service is worth pursuing or not.
What is a Minimum Viable Product?
A minimum viable product (MVP) is an app, service or product that consists of just the core features and is used by a limited number of people – the first users of the product or service. These users, if applicable, will make live transactions, test the system out and give you valuable feedback. That way, you can collect more information about how your product works with real users and if there are any essential improvements that need to be made before you go to market.
Here are a few ways you can distribute your MVP and gain valuable knowledge on your target market and glean relevant information:
Create a short video outlining what your problem your product or service solves, who your customer is, how it solves the problem your customers have and how it can make their lives better / easier / happier and so on. It only needs to be a maximum of 3 minutes long (although 90 seconds is the optimum length!).
Encouraging people to sign up to stay updated about your product via a landing page can be a super effective way to gauge your MVP and customer interest. A great landing page should contain bitesize pieces of information such as an elevator pitch, bullet point benefits, a few supporting stats, perhaps even an explainer video and, of course, a sign-up / data capture button. It’s vital to set up a Google AdWords ad using niche keywords so you can direct traffic straight to your landing page. It’s also helpful to pair this with Facebook and Twitter Ads.
This is where you effectively ‘go with the flow.’ If you wanted to start an e-commerce furniture store, for example, you could put the photos on your site (with permission!) and if the orders come in for certain products then you simply stock up on said product. Of course, this isn’t how you should run your business in the long-term – it’s simply a great way to identify demand or even gaps in the market with very little financing.
Popular and lucrative, crowdfunding is suitable for all kinds of products and service. From a selling wristwatches to gaming apps, crowdfunding is one of the most versatile MVP strategies out there. Using sites such as Kickstarter, Crowdfunder or IndieGoGo, you can raise the money you need for your start-up costs. As long as you make your costs completely transparent and offer your backers great rewards for funding your project, you could be extremely successful.
So, how do I work out my MVP?
To work out your minimum viable product and, as a result, your start-up costs, you’ll need to take into account several factors:
Functional Requirements: What must your app be able to do to provide value to your customers
Application type: Determine which platform you want to focus on for now – mobile, desktop, etc.
How many users: Is it a 1-user system, 2 user system (buyers and sellers) or a 3+ user system.
Architecture: Monolithic app or back-end API?
Payments: Will it be a free app, a fixed payment or a recurring payment model?
Design preferences: Basic UI design or custom UI design?
Once you have your answers you should have a rough idea of how much you’ll need for your start-up costs.
Hyperext can help you define your minimum viable product by way of a software specification, which you can then use to go shopping for the best price to have built. We love talking about new software ideas, so please get in touch to discuss your ideas.
Good luck with your start-up business and don’t forget to define your MVP first!