The MVP and product-market fit explained

By | July 25, 2016

A vital element of the Lean Startup framework is the minimum viable product (MVP). This is an early version of the product to show a small set of users. It is not necessary to have a perfect product, nor should the team show the MVP to mainstream customers. Rather, the idea is to quickly get a product that has basic functionality for early adopters to try out.

An early adopter is a special breed of startup customer. In The Lean Startup, author Eric Ries writes that an early adopter loves to see rough versions of a product because they need the product the most and get a thrill from being the first to try it out. They can live with a partial solution, and, according to Ries, will use their imaginations to fill in the rest. They may even be suspicious of the product if it is too polished!

The MVP is not a proof of concept or technical prototype. With an MVP, the team is not trying to determine whether the technology or design actually works. Instead, the MVP is a tool to validate assumptions. Ries writes that an MVP is the fastest way to get a build-measure-learn cycle going. An example cited in the book is Groupon, the popular “daily deals” website and app. The MVP consisted of a blog and simple PDF coupons. It wasn’t much, but it was enough to validate demand for this type of service.   

If the assumptions cannot be validated, Ries says the idea itself may need to be modified, stripped down, or radically changed as part of a pivot. This concept is celebrated in Silicon Valley, and is indeed the story of several successful products including Twitter.

What is product-market fit?

Regardless of whether the team pivots or perseveres, the overriding goal is to achieve product/market fit. Marc Andreessen, a co-creator of the Netscape Web browser and one of the top VCs in Silicon Valley, gives the following definition:

“Product/market fit means being in a good market with a product that can satisfy that market.”

It sounds so basic. Make something that customers want. Yet countless technology companies—including Ries’ own startup, IMVU—have made the fundamental mistake of building products that customers did not want. These companies may have achieved product/solution fit, in which a team creates a great product that solves some problem … but it’s not a problem that customers care about!

Taken to an extreme, a few companies will spend years trying to find customers for such products, but eventually will be forced to abandon the effort. If the market does not exist, the business will eventually fail.

Help the author spread the word!Share on Facebook0Share on Google+0Tweet about this on TwitterShare on LinkedIn0Email this to someone

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload the CAPTCHA.