Learning how to build a minimum viable product and establish a minimum viable audience are key elements of success for early-stage startups.
To generate revenue from your product or service at scale, you’ll need to establish product market fit — when a company develops an offering that is proven, through sales and other metrics, to meet the needs of a specific customer base. Building a minimum viable product (MVP) and identifying a minimum viable audience (MVA) are the first steps in this journey.
If you’re wondering how to build a minimum viable product and find a minimum viable audience, you’re certainly not alone. Many startup founders and early-stage employees are on the same journey — and it’s one of the most common areas of need for York IE’s advisory services clients.
Let’s first define the MVP and MVA, and then I’ll outline some key strategies I’ve learned in my years of product management and development:
What Is a Minimum Viable Product?
A minimum viable product is a starting point for introducing your product to customers. It’s a version of your offering that isn’t necessarily complete from a development standpoint but is still functional and addresses the problem your customers are facing.
An MVP is somewhere between a prototype and a finished product. You’re trying to deliver something of value to your customers — a version of your product that allows you to gather feedback and continue tweaking. It is meant to prevent your team from spending months or years developing an offering that’s completely untested by the market.
If you were a chef, you’d probably cook a brand new dish for friends and family before serving it to an entire banquet hall. This way, you could find out if you need more seasoning, greater portions or different ingredients — before you’ve spent time and money making it at scale. An MVP works the same way.
The Path to Product Market Fit
Learn how on our Fuel platform.
How to Build a Minimum Viable Product
Learning how to build a minimum viable product will make your startup’s early stages much easier. Here are some steps to MVP success:
1. Take an Iterative Approach
An iterative product development approach focuses on delivering value in consistent increments, rather than all at once. The whole appeal of an MVP is that you won’t spend as much time building product that will elicit meaningful feedback from your customers.
Consider the first row in the diagram above: going from tires to axles to chassis to car. If you built a car this way, you wouldn’t have anything for customers to use until you got to step four, which might be months down the road. Cash-strapped early-stage startups rarely have enough runway to wait months before they bring a revenue-generating product to market.
2. Select Your Target Audience — and Stick With It
Let’s look at the second row in the graphic. If you start by building a scooter, you can get it to market quickly. However, a scooter customer (likely a child) is a lot different than someone who would buy a car (an adult with a family). Each stage of development produces a revenue-generating offering, but you’re constantly switching the audience. You’ll never get meaningful feedback this way.
It’s important to decide on your intended audience and spend the entire dev process building with this persona in mind. This subsect of customers is what makes up your minimum viable audience.
3. Ruthlessly Prioritize Product Features
“Ruthless prioritization” is a term I used often when working in product management and development for Dyn and later on when we were acquired by Oracle.
Every company likely has a product development backlog: a list of features you’d eventually like to build. Time and budget constraints keep you from checking off every item. Ruthless prioritization means constantly asking yourself, “Are you sure we need that right away?”
You can’t have everything at once, so boil down your feature set to the most essential aspects for your customer.
What Is a Minimum Viable Audience?
The minimum viable audience is the smallest target group of customers that could still offer enough revenue-making opportunities to grow your business. Finding this audience is just as crucial as building your minimum viable product.
It’s great to have a big vision. You should want every company in the world to use your product — eventually. But in the early stages, trying to build and market a product for everyone isn’t possible. That’s where your MVA comes in.
When you’re developing a product for a specific audience and a specific use case, you’ll be able to ruthlessly prioritize features and quickly get more customer feedback.
How to Build a Minimum Viable Audience
So where should you start with your minimum viable audience? Here’s how I would approach it:
1. Research Your Market
It’s important to be open to different potential target audiences. Your first idea of an MVA might not be the best possible opportunity in the market.
Look around to find personas that: a.) have a need for your offering; and b.) will pay for it. Perhaps a certain market is ripe with venture capital funding, giving them more cash to spend. Maybe recent laws or regulations are creating demand in a specific industry or vertical.
2. Identify Potential Customers You Can Actually Reach
Your MVA will ideally represent a persona, industry or vertical with a true need for your product. It’ll also be a group that you can easily reach through your various marketing and sales channels.
For example, you might think your platform could work for any medium-size business. But it’s going to be quite challenging to tailor your messaging to each of these potential customers. Tightening your bullseye onto medium-size law firms, for example, would allow you to cut through the noise and reach a more specific audience.
3.) Gather Feedback
Now we get to the most important step: taking insights from customers and turning them into actions. Conversations with your MVA will help you adjust your product, but they’ll also ensure your messaging and sales tactics are resonating.
Example: Finding a Minimum Viable Audience
Nailing your MVP and MVA will go a long way in achieving product market fit. Remember to start small, ruthlessly prioritize and be adaptable. One of York IE’s portfolio companies, 40GRID, provides a great example.
Its founders built amazing field service software — the type of platform that could theoretically be used by anyone from a landscaper to a kitchen appliance technician. But marketing an MVP to the massive field services market was daunting. How could 40GRID break through the noise and beat larger, established competitors?
The company tapped an underserved market — pest control companies — as their MVA. They identified a lack of software platforms for this vertical; the pest industry provided a logical entry point in a market that needed 40GRID’s services. That allowed 40GRID to ruthlessly prioritize the features that mattered to their pest control customers.
In 10 years, perhaps 40GRID is being used by field services companies across industries. For now, though, 40GRID is focused on building the best possible pest control management software. That’s the essence of building a minimum viable product for a minimum viable audience.
To learn more about building an MVP and MVA, watch my full presentation on our Fuel platform.