In this first of two articles, Belake Research’s Managing Director, Steve Long, looks at how minimum viable product development can cut development costs and reduce risks.
If you are developing a new, radical or disruptive produce or service, there is a certain amount of Chicken-and-Egg scenario with any new product when it comes to market research. Of course, market research is essential as you develop any new idea, providing vital feedback from your potential customer base on your product, and identifying improvements. It can simultaneously help you to gauge the potential market for your idea, so you can decide how much capital investment your idea is worth.
But if your idea is going to change the world, its a challenge to market research in that brave new world, since we won’t know exactly what this new world looks like until your product is launched. As the great Henry Ford of motor industry fame once said “If I had asked people what they wanted, they would have said faster horses”. Similarly no one foresaw that a key driving customer for mobile phones would be young adults under 25 – much of the initial focus was on business people.
It’s clearly quite difficult to market research a radical or disruptive new idea. If a product is so radical, the best market for your product may not be clear until the product is on sale and people find ways to fit it into their lives, such as the way text messaging was as important as calling people in the early days of the mobile. But the market research is really important part of the development process for any new product or idea, so its very unwise to develop a product without market research – that becomes a risky guessing game. So you have a chicken-and-egg situation – you can market research until you know your product, but you can’t develop your product without research.
Indeed cutting edge research by Clayton M. Christensen from the Harvard shows how even the largest organisations can be paralysed by this dilemma. Instead they stick to product development, continuously improving their existing product range, as they can get the customer feedback they need from a definable, existing customer base. As such many companies, even leading ones, are left standing by the truly radical ideas. For example, who would have thought the leading provider of operating systems for desktop computers would be lagging behind in the market for operating systems on mobile devices?
Clearly traditional market research isn’t quite up to the job, and we need some new methods. At Belake Research we love a challenge, and we are committed to providing our clients with the research they need, and we’re never satisfied with a ‘can’t be done’ response.
Minimum Viable Product, or MVP, is one of the tools that can solve these problems. In reality neither the chicken nor the egg came first – they evolved together. In the same way, MVP aligns your research with your product development and its marketing, conducting all three in parallel. The product is marketed during its development, and feedback from its first customers is then used to feedback into both the marketing and the development.
As the name suggests, the process starts with the minimum viable product. This is the product at the earliest stage of development possible where it still can be presented to a consumer. It doesn’t even have to be useful to the customer yet. The idea is to give the customer something they can experience, touch or feel, and simultaneously give feedback about their experience, in a format which is helpful to the development of the product, and helps to develop the marketing strategy too. As the product development takes another step forward, more feedback is gained and the marketing strategy is honed further. By the time the product is fully fledged, the market for the product is fully defined and the marketing strategy is already fully optimised.
The initial product – the minimum viable one – can be very early in its development. For example, when considering a new online service, the minimum viable product could simply be a single holding page on the internet. The page describes what the website or service will be, and perhaps asks the visitor to register to receive updates when more is added to the service or asked to provide some feedback. This is coupled with a broad but measured marketing campaign, which is then compared against registration, visitor traffic or the feedback.
This analysis then gives an idea about which features are most likely to be useful to the customer, and the service is developed accordingly. It also gives an idea as to which marketing methods yielded customers which appreciated the service the most. The service is developed more accordingly, and a more targeted marketing mix completed, and so the process is repeated again and again, each time improving service features and the effectiveness of the marketing.
It can sound expensive, but in reality it is often far cheaper than more traditional product development. It reduces development risks significantly. New products or services can be pulled very early in the development if it becomes clear there is no demand for the product. Little time is spent on developing features that the user won’t find useful, and no marketing expenditure is wasted on driving customers to a product which they don’t want.
Similarly cost of research is minimised. No research is required to find features that a customer won’t need, and at each stage only the minimum necessary research and analysis needs to be undertaken to proceed to the next stage.
This is the briefest of introductions to MVP. In the next of this series, we’ll take a look at a real life example of MVP in action.