As people in the startup and non-startup world have become increasingly familiar with the concept of lean development the term ‘Minimum Viable Product’ or ‘MVP’ has been increasingly misunderstood and misused.
An MVP is not merely the minimum number of features needed to launch a product. It also isn't the minimum number of features needed to satisfy customers, for that carries with it the assumption that you know what your customers want. A minimum viable product is most simply and accurately defined as the product with the highest return on investment versus risk, but what exactly does that mean?
Eric Ries originally used the term in his book "The Lean Startup' and defined a minimum viable product as:
'that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.'
Overtime this definition has become 'the smallest thing you can build to launch.'
A minimum viable product is not just a cheapest version of your vision
While lean development techniques can prevent you from wasting money on the wrong product, that isn't necessarily the goal. The idea is to provide the maximum amount of customer value while spending the lowest amount of development time and money possible. The cheapest version of your product may not provide sufficient customer value to gain enough validated learning.
A minimum viable product is about finding out what your customers want as early as possible
Startups often begin with an idea for a product that they think people want. They then spend months, sometimes years, perfecting that product without ever showing the product, even in a very rudimentary form, to the prospective customer. When they fail to reach broad uptake from customers, it is often because they never spoke to prospective customers and determined whether or not the product was interesting. When customers ultimately communicate, through their indifference, that they don't care about the idea, the startup fails.
A minimum viable product is designed to prevent this scenario from unfolding and accelerate the learning process. If the concept is going to fail, it is better to fail fast. If the concept needs to be refined, it will be refined earlier. During the process entrepreneurs can learn valuable information that may steer them in an entirely new direction, known as a pivot.
A minimum viable product isn't always an actual product
Sometimes you may not even need to build the technology to validate the idea. For example, you want to develop a new mobile application for tourists. You know it can be built, but before you even build the prototype you can validate the concept. There are a variety of ways to do this, such as building a landing page explaining what the app will do and collecting the contact info of individuals interested in being notified once it is developed. This is far cheaper than building a native application for smart phones. You can get proof of concept without a product.
In short, a minimum viable product is not the cheapest option or the smallest number of features. It's a ratio of the minimum amount of time, money, and effort required to begin the cycle of validated learning. Indeed, a minimum viable product may not even be the actual product you intend to develop but rather a means of validating it's construction.