12/4/2021

Digital Product Management

Minimum Viable Product

Atanu Ghosh
[email protected]

Introduction of MVP

• The term MVP became popular in the context of a “Lean Start-up.”

• Lean Start-up, a concept introduced by Eric Ries, is defined as “human

institutions designed to create new products or services “under conditions
of extreme uncertainty.”
• The conditions are defined as extremely uncertain because who the
customer is (the market) and what the customer will find valuable
(the product) are both uncertain.
• Finding the “product-market fit” is key to a lean start-up.
• Lean start-up requires limited resources to “start” (the MVP, hence
“lean”), though it may require resources to “scale.”

• In lean start-ups, “consumers are less able to contribute to the development

of new product or service concepts in future.” (Design Council, 2013)

• The greatest risk for start-ups lie not in the development of new products but
in the development of customers and markets. To accelerate learning about
product-market fit, lean start-up introduces the process of iterating on MVPs.

1
 12/4/2021

The Lean Canvas

What is MVP?

• MVP is “that version of a new product which allows a team to

collect the maximum amount of validated learning from
customers with the least effort.” (Eric Ries)

• Validated learning is defined as the “process of demonstrating

empirically that a team has discovered valuable truth about a
startup’s present and future business prospects.”

• In other words, MVP is a product made with the least set of

features in order to start learning about the product-market fit.

• An MVP in itself does not necessarily imply a market launch, but

the process seek early market launch because much of the
uncertainties lie in the premises about what will happen after the
launch.

• MVP is a matter of “degree.”

4

2
 12/4/2021

MVP, Proof of Concept and Prototype

• Prototype is meant for assessment of technical

feasibility.

• With MVPs, customer development is the is the

driving force of the iteration cycles. The process of MVP
implies a proactive and a customer-centric approach
compared to design driven innovation.

• MVPs target “early adapters” i.e. the customers who

need the features of the MVP most acutely.

• Proof of Concept is any stripped down version of the full

product meant to validate the business “concept” not
the technology.
5

MVP Metaphor

Source: Henrik Kniberg

Henrik Kniberg’s famous metaphor of MVP

6

3
 12/4/2021

MVP Metaphor - Assumptions

• Problem Space - You are in the problem

space and the MVP addresses a problem
that the customer has.

• Opportunity - The MVP as a solution is

better that what is available to the
customer.

• Unknown – The final product is unknown,

to both the creator and consumer
7

MVP - The Problem to Solve

• Can I state the problem clearly?

• Have I experienced it myself?

• Is the problem solvable (by a lean start-

up)?

4
 12/4/2021

Who is the Customer?

• Everyone?

• How often do they have the problem?

• How intense is the problem?

• Are they willing to pay?

• How easy are they to find?

• Which customer to go after first? (the easiest customer;

only the most desperate customers will buy a “bad”
MVP)

• Which customers should be “abandoned”?

9

Does the MVP Really Solve the Problem

• Give the product to the customer

• Observe how the customer uses the

features (do not ask them or show them)

• Do not fall in love with MVP

10

5
 12/4/2021

Pivot vs Iterate

• Pivot – Changing the customer and/or the

problem (should happen rarely)

(Examples of successful pivot:

https://www.forbes.com/sites/jasonnazar/2013/1
0/08/14-famous-business-
pivots/?sh=6764c4c57978)

• Iterate – Changing the solution (common)

• Identifying the problem is the genius part, not

the solution
11

Feedback Loop of MVPs

Source: Johan Bartnes Roed

Build-Measure-Learn Feedback Loop of MVPs

12

6
 12/4/2021

Learn-Build-Measure (Learn)

• The process of building MVP starts with declaring a hypotheses

about how to build a sustainable business around a product.

• The first step in this process is to confirm that the founder’s leap-
of-faith questions are based on reality, that the customers have a
significant problem worth solving.

• The hypotheses are prioritised on the basis of which of them will

lead to the maximum amount of validated learning about the
product market fit.

• The MVP is the product that can prove or disprove these

hypotheses with the least amount of development effort.

13

Learn-Build-Measure (Build)

• The design of an MVP should therefore not necessarily be a

materialization of what the designer believes to be the most
optimal product features and functions feasible at that time.

• The delivery should rather be prototyped as a medium to support

the process of eliminating the most evident market
uncertainties at that point of time.

• The MVP is not a product stripped to as few features as possible.

However, features and functions that do not contribute to
eliminating the most risky uncertainties are considered non-
valuable at that time.

• Building a product that customers refuse to use is the biggest

waste in lean manufacturing term. Hence MVP is inventory till
the hypotheses are proven correct.

14

7
 12/4/2021

Learn-Build-Measure (Measure)

• Hypotheses have to be testable by having specific, concrete

predictions of what will happen.

• The strategy of just being “open to what will happen” misses the
purpose of building an MVP.

• The tests must answer whether the designers are on the right
track or not.

• If the new design does not change the customer behaviour to the
better it should be judged as a failure.

• Vanity metrics on whether the product gives a good experience

or not, by itself, is considered uninteresting.

15

New Product and Ansoff Matrix

Source: Google

Diversification strategy is applied for new product and new market with
reference to the company. New product and market is not universal.
16

8
 12/4/2021

Rate of Innovation and MVP

Source: Google
17

MVP and the 5th Wave

Source: Google

1. The term MVP was coined in the 5th wave. But did the
concept exist before?
2. What is unique about the 5th wave of innovation?
18

9
 12/4/2021

The 5th Wave

Source: Google

The 5th wave was led by the tweens, many of whom were college
drop-outs. They were the innovators and they were the market!

What is the significance of this phenomenon to MVP?

19

Innovation and MVP

Source: Johan Bartnes Roed

The Double Diamond Model of Innovation

20

10
 12/4/2021

Risk of Wasteful Development

Source: Johan Bartnes Roed

Risk of wasteful development is a function of “degree” of innovation

21

Accumulated Risk

Source: Henrik Kniberg

Henrik Kniberg’s cartoons on accumulated risks

22

11
 12/4/2021

Improving the Value Curve

Source: Henrik Kniberg

To reduce the accumulated risk complete the highest value feature first
23

Value vs Output

Source: Henrik Kniberg

Focus on value and not the output

24

12
 12/4/2021

Maximising Speed vs Minimising Distance

Source: Henrik Kniberg

Note: Time is constant!
25

Feature Prioritisation Framework

• Value vs Effort

• Value, Cost and Solvability

• MoSCoW (Must Have, Should Have, Could Have, Won’t

Have)

• RICE (Reach, Impact, Confidence, Effort)

• Weighted Shortest Job First (WSJF) (CoD/ Job

Duration), CoD = Cost of Delay

• Kano Model

26

13
 12/4/2021

Feature Prioritization for MVP

Value

Hi

Cost
Lo Hi

Hi
Solvability

The features that the customer is “assumed” to be most desperate to

get (highest value), the ones that require least cost to develop (cost
effectiveness) and the ones most easily solvable must go into the
feature list of MVP.
27

Weighted Shortest Job First

28

14
 12/4/2021

Cost of Delay (CoD)

29

KANO Model

• Must Have Quality – Requirements that customers expect, take for

granted and are extremely unhappy if not provided. They may reject the
product altogether.

• One Dimensional Quality – Requirements that lead to satisfaction if

provided but dissatisfaction if not provided. Normally customers do not
expect this feature. But if the expectation is given, not meeting the
expectation will lead to dis-satisfaction.

• Attractive Quality – These attributes provide satisfaction if achieved

fully but do not lead to dis-satisfaction if not fulfilled

• Indifferent Quality – These attributes are those that if provided do not

result in either satisfaction or dis-satisfaction

• Reverse Quality – This attributes may lead to dis-satisfaction if provided

to a certain section of customers, if not all.

30

15
 12/4/2021

KANO Model

• Attributes’ place on the model can change over time

• As customer expectations on level of performance change due to
exposure from competing products
• Attributes can move from delighters, to performance needs and then to
basic needs
31

MVP: A Proposal of New Meaning

Ref: Johan Bartnes Roed

MVP is a proposal of a new meaning 32

16
 12/4/2021

Technology Epiphany

Source: Johan Bartnes Roed

Technology epiphany is the discovery of the most powerful meaning

of a new technology. Merging technology break-throughs with
radical innovation of meanings is therefore an especially effective
innovation strategy. 33

Design Driven Research

Source: Johan Bartnes Roed

Design driven approach advocates stepping back from the users

and instead getting close to the interpreters.
34

17
 12/4/2021

Accumulated Risk in Design Driven Innovation

Source: Johan Bartnes Roed

Interpreters may help connecting the dots but may still be short of
predicting new markets.
35

MVP Metrics

• Hypotheses have to be testable by having specific, concrete

predictions of what will happen.

• The strategy of just being “open to what will happen” misses the
purpose of building an MVP.

• The tests must answer whether the designers are on the right
track or not.

• If the new design does not change the customer behaviour to the
better it should be judged as a failure.

• Vanity metrics on whether the product gives a good experience

or not, by itself, is considered uninteresting.

36

18
 12/4/2021

North Star Framework

• The North Star Metric – The heart of the framework, usually a

single critical rate, count or ratio that represents the product
strategy.

• Results and Value – The North Star Metrics is a leading indicator

of business results and customer value.

• Inputs – These are a small set (3 to 5) of influential,

complementary factors that directly affect the North Star metric.

• The Work – The North Star Metric and input should be connected
to the tasks of research, design, software development,
refactoring, prototyping, testing, etc. These are called “the Work.”

37

North Star Metric

• North Star metric is the key measure of success for the

product team in the company.

• It defines the relationship between the customer

problems that the product team is trying to solve and
the revenue the business aims to generate by solving
the same.

• North Star metrics are used to take feature

prioritisation decisions.

38

19
 12/4/2021

North Star Metrics

Source: https://amplitude.com/north-star/about-the-north-star-framework

39

North Star Framework – Burger King Example

Source: https://amplitude.com/north-star/about-the-north-star-framework

40

20
 12/4/2021

AARRR Pirate Metrics

• AARRR framework was created by David McClure, a silicon valley

founder and investor
• Called the “Pirate Metrics” because of its funny pronunciation
41

AARRR - Example

Note the difference with other popular marketing funnel frameworks

like the AIDA model
42

21
 12/4/2021

Product Metrics Using Google Analytics

Let us explore how Google Analytics can

be used to evaluate AARRR and other
relevant metrics for an MVP.

43

Alpha and Beta Products

• What are Alpha and Beta Versions of

a product?

• Are they same as MVP?

44

22
 12/4/2021

Market Testing
• Qualitative Methods
• 1:1 Interview
• Focus Groups
• Customer Advisory Groups
• Virtual Research Sessions
• In-app Community Feedback
• User Sessions

• Quantitative Methods
• Polls
• A/B/n and Multivariate Testing
• Analytics

• Both Quantitative and Qualitative

• Ideas Portal
• Customer Facing Teams
• Usability Testing
• Survey
45

Advantages and Disadvantages of MVP

Area Advantage Disadvantage

Investment A lower investment of both time and Teams run the risk of not investing
money reduces the risk of business failure enough to deliver a product offering
and gives teams the option to learn and that can solve customer problems.
adapt during development.
Time to market MVPs often get to the market first, If the right solution isn’t delivered,
allowing them to establish a foothold competitors will win out as the market
ahead of any competition. matures.
Validation Early and rapid testing validates the proof There might not be enough features to
of concept in real markets. verify that it solves a real problem.
Iteration Countering the tendency to create perfect Moving on quickly from one feature to
features, MVPs require fast iterations so another may allow an incomplete
feedback can be gathered. product experience to persist.
Feedback Early feedback can give strong product- Teams can become too focused on
market fit signals. Teams can quickly addressing every point of feedback
develop and release features to address instead of focusing on the underlying
consumer needs. customer problems.
Growth Entering the market first allows user If all of the aspects that create a
acquisition and brand building to start positive customer experience aren’t
upon the first release. considered, long-term growth is
difficult.
46

23
 12/4/2021

MVP Scale-Up Strategy

Cannot iterate
quickly after Polished Polished
launch Roll-out Launch

Can iterate
quickly after
MVP MVP
launch Roll-out Launch

Can limit Cannot limit

roll-out roll-out

Increased pressure
47

Exercise

• Think of a problem that you intend to solve through a

new product.

• Do you recommend to build an MVP for the new

product?

• If so, what is the degree of MVP that you would

propose to build for your new product?

• Can you identify 5 features that you think should go in

your MVP?

48

24
 12/4/2021

Thank You

25