How to Build an App MVP to Launch Your Business

Learn the value of creating an app MVP to reduce your risk and increase your success.

Airbnb. Instacart. Wayfair.

Each of these three companies is worth billions of dollars. What is the common denominator among these three companies? They all solved a problem that people cared about. They started small before growing nationwide. And they found market fitment for their business by creating a bare-bones version of their product, known as a minimum viable product, or MVP.

Why Do You Need an App MVP?

The MVP approach of building a business originated from the book The Lean Startup by Eric Ries. Eric defined an MVP as “a version of a product that allows a team to collect maximum feedback from its customer with the least effort.” The MVP approach allows you to test your hypothesis with minimal risk and effort involved. It also enables you to be receptive to customer feedback and iterate faster on your product to achieve product-market fit.

There is no formal guideline on what an app MVP would look like but it's a good idea to have for app development. 

Companies like Buffer had used a minimal set of landing pages to validate their audience and positioning. Zappos used an approach known as “Wizard of Oz” to check demand by manually performing tasks in the background, giving an illusion of automation. Let us dive into the most popular categories of MVPs companies have built to great success.

1. Explainer Videos

Explainer MVPs are where you visually demonstrate a walkthrough of your product. Your product may not be functional at this point, but your walkthrough will showcase your product's potential benefits. At the end of the walkthrough, you would ask customers to sign up on a waitlist, which allows you to gauge demand for the product before building it.

Example: Dropbox explainer video

2. Wizard of Oz

This approach is named after the eponymously named children's novel. The Wizard of Oz MVP is used when your product gives your customers an illusion of automation, whereas, in reality, each task is performed manually. For example, the app would show you a list of products for sale. Once you buy them, there are people behind the scenes who go to a store, buy these products, package them, and ship it to your address.

Example: Stitch Fix MVP story

3. Landing Page MVP

Landing pages are used to describe your product's potential benefits with compelling visuals and copy. You gauge interest by offering a waitlist to notify when you launch the product, with pricing to test if customers will pay for these features.

Example: Buffer Landing Page MVP

How to Create Your App MVP

The primary purpose of creating an app MVP is to validate your idea and gain feedback from customers to learn if your idea works. All your efforts in product development at this stage should focus on achieving this goal with the least effort possible. It does not mean that you build a poorly designed app with half-baked functionality. Focus on the most critical features to form an excellent foundation and get customer feedback.

When creating an app MVPs, there is a standard product development pattern. In the book The Lean Startup, Eric talks about the process of “validated learning,” which is a continuous loop of these activities:

  • Build a hypothesis around your startup idea and create a core set of features around it as a product
  • Measure how customers interact with it and are willing to pay for these features
  • Learn from your observations of people using your core product and their feedback. You choose to persevere and improve this version, or you stop work and pivot to test a new hypothesis, informed by the feedback you received.

As a startup, the validated learning approach is beneficial for your limited capacity and resources at your disposal. Below, we will use an example to show step-by-step how to put this validated learning approach into practice.

Example: Will urban millennials pay for a product that allows them to order food made by renowned chefs and delivered to their home?

Step 1: Identify Your Objective

The first step of validating an idea would be to determine its true objective. Airbnb's goal was to find an authentic local way to stay in a city. Uber aimed to provide cabs on demand. Our example's objective is to determine if people would love to experience haute cuisine by famous chefs, delivered to their home.

Step 2: Identify Your Customer

The next logical step would be to identify whom this product would appeal to and who would willingly pay for it. In this case, our product is targeted towards a millennial working population in large cities. These folks work remotely during the lockdown. They are concerned to dine out due to the risk of infection. At the same time, they would be interested in the food aspect of the experience brought home to use it safely. You would then narrow down your test to your local city, for example, San Francisco.

Step 3: Understand Their Pain Point

The third step would be to find out their concerns and pain areas. Do they order food delivered regularly? Do they find enough options for their palate and wallet? How much do they pay for an expensive meal for a date night out in the city?

Such questions can be created as a simple survey when you eventually build out your MVP. However, you could also preempt this by creating a simple online survey to ask interested people to answer them.

Step 4: Analyze the Competition

Competitive analysis would be the next step to understand market needs and answer two questions:

1. If customers are attuned to a similar product or service before?

2. Do these customers have any grievances or unmet needs that these current products do not satisfy?

Understanding the answers to these questions can differentiate your app MVP and find the early adopters for your product.

Step 5: Prioritize A Differentiated MVP

Based on the inputs from Step 1 - 4, you will get a clear picture of what is missing in market needs and customer pain points. From here, you must prioritize the features to build. Prioritization allows you to focus your limited capacity on those features, which can maximize learning for your team.

If you are starting up, the simplest way to prioritize ideas would be to start with the Value-Effort matrix with value and effort to form the Y-axis/X-axis. Value should be the customer impact and satisfaction in solving their pain point. Value achieved from a feature is highest at the top to lowest at the bottom. The effort taken goes from the least effort required at the left to the most effort required at the right.

As a result, you get four options in the quadrant. If you have a list of customer feedback ideas, you should organize your team to determine each one's value and effort. Then you plot these ideas on this quadrant using the following measure:

High Value/Low Effort: You should place the ideas which cost less to build but have an outsized impact in this quadrant.

High Value/High Effort: You should prioritize these ideas to be picked up once you have addressed the high value - low effort bucket.

Low Value/Low Effort: You pick up these ideas only when you have ample time, and ideas in the first two quadrants mentioned above have been addressed.

Low Value/High Effort: These ideas in this quadrant are not valuable enough to be addressed at this point.

In our example, you might experience showing a chef's list of dishes with pricing is essential criteria for customers and the easiest for our team to build. So you prioritize this functionality as the core for your app MVP. You could also extend the feature set by allowing them to select these dishes online and pay through the app, but you might need more time to develop them. You decide you would let them see these dishes and send the dishes they need through text message to a registered number.

Step 6: Establish A Baseline

There is no point in building out an app MVP if you do not establish a clear baseline to determine the success criteria. In our example, you would gauge this service's acceptance and uptick with the limited coverage of chefs you have in the city. So you will measure the average order volume and revenue every week as the key metric that this product is gaining traction.

Step 7: Learn. Refine. Repeat.

Prepare to talk to customers regularly as they use the app MVP. Ensure that the app MVP has a clear feedback channel that allows customers to send feedback in as much detail and as frequently as possible. This would allow you to understand customer sentiment and prioritize the next wave of features in our mobile app development.

In our example, your customers might tell you that the present selection of chefs and dishes are inadequate. Or they might suggest they would like to see specific cuisines more often. They might also let you know that the pricing is too high to afford. These insights will inform you how you can refine your app to win early adopters and build a loyal customer base.

Key Considerations as a Team for App MVPs

Be Humble

Your MVP might not be as your customers expected. And they would give you feedback on what your MVP is missing. As a team, it is essential to drop any preconceived notion of how the app should look and work. Instead, you should pay close attention to your customer feedback to understand how to refine your app for their needs.

Be Nimble

Your team might have spent considerable time building the first iteration of the app MVP. Once they launch the MVP, they might think that their work is done and observe passively how the MVP is being used. But in essence, the real work on an MVP begins once customers start using it and provide feedback. Your team must be nimble enough to listen to the feedback and tweak the MVP quickly to refine it.

The Quibi fiasco has shown that keeping a close watch on customer feedback and competition is key to surviving a product launch. Surviving in the early days of a startup is tough for a multitude of reasons. Having a structured MVP approach can reduce the risk of finding product-market fit and understanding customers. If you solve their critical pain points in a compelling MVP and price the product attractively, they would sign up. They would become loyal customers if you listen to them and iterate on the product to solve their most acute problems.