Driving Startup Growth: Harnessing Early Product Design and Testing

Accelerating innovation through iterative MVP experiments.

Behavioral science principles offer a powerful lens for designing effective minimum viable products that genuinely resonate with customer needs. By understanding human behaviors, motivations, and decision-making tendencies, product teams can incorporate evidence-based techniques to drive user engagement. Testing concepts through an MVP approach enables rapid iteration guided by behavioral feedback to refine products that change behaviors for the better. The Behavioral Economics Bootcamp provides proven frameworks to leverage behavioral insights to create habit-forming products that deliver value.

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Introduction

The minimum viable product (MVP) has become a cornerstone of the lean startup methodology for launching new products and ventures. An MVP is a prototype or initial product version with just enough features to enable validated learning through customer testing and feedback rather than investing substantial time and money upfront to build a complex product. MVPs allow startups to validate their fundamental business hypotheses by engaging with customers early in development.

While pioneered in the startup context, the principles of MVPs are being increasingly applied by large, established companies looking to efficiently bring new products to market. The goal is to gain insights that inform strategy and planning through real-world experimentation and engagement with end users.

In this article, I will cover the origins of the MVP concept, how it differs from traditional prototypes, common misconceptions, and recommendations for co-creating and testing MVPs with customers. Key topics include:

• The evolution of MVPs and their roots in prior development processes

• Distinguishing MVPs from prototypes in terms of purpose  

• Addressing inaccurate assumptions and myths

• Gathering qualitative and quantitative feedback

• Collaborating with customers to shape the MVP

• The spectrum of MVP fidelity levels

• Iterative development and expanding testing over time

While MVPs emerged from the startup and technology sectors, the core principles of lean, customer-driven development can apply across industries and project types. When used effectively, MVPs can lead to better products, improved customer experiences, and more substantial market success.

Customer Discovery: From Opportunity to Solution

Viewing product design and testing as an integral part of the customer discovery process is essential. By engaging with target customers early on, startups can validate assumptions about customer needs and establish a foundation for long-term relationships. Properly structured customer interviews allow for ongoing learning about the customers' problems and potential solutions. As startups gain a deeper understanding of the customer experience and needs, they can seek feedback on solution concepts and early working versions, progressing from problem validation to solution testing. This two-phase customer discovery approach provides valuable data points on the customer journey. It allows startups to gain early traction by converting early contacts into paying customers and brand advocates. If you structure the process carefully and choose your first customer segments wisely, you can make many of these first contacts your first paying customers, leading to early traction.

Early Product Development & Testing

Early solution development efforts provide vital opportunities to test the underlying assumptions of a startup's business model. Through continuous refinement of the business model, which involves customer interviews, market research, and competitor analysis, startups can gather valuable insights. The primary goal of early solution design activities is to create real and measurable tests for the business model assumptions with customers. By involving customers in the design process, startups can co-create solutions that address customer problems and deliver value that the market truly values. This customer-centric approach aligns with the lean startup philosophy and helps transition early participants into paying customers and brand advocates.

You will have many customer and marketplace discussions as you craft your business model's "first cut." Once you have early validation that you have a solution to a customer problem of great value, you can think about the best way to design and build your product.

The main goal of early solution design activities is to provide a tangible and measurable way to test your business model assumptions with customers. This phase of customer engagement helps to clarify any misunderstandings you have about the problem, the desired solution, and what they are willing to pay for in a finished product. Engaging the customer early in the design process enables them to visualize and hopefully experience the value of your proposed solution. By engaging with early designs, the customer co-creates the solution. This early customer involvement ensures that you build a solution that truly addresses the problem in a way that the market values.

Involving the customer early in the design process is consistent with the current lean startup philosophy. Early solution iterations allow you to quickly test key business model assumptions about the customer problem, solution, and expected value. More importantly, it establishes an environment where the customer co-creates the solution, ensuring that the finished offering meets or exceeds marketplace expectations. This co-creation process has the added benefit of helping you transition early participants to paying customers and brand advocates. 

Minimum Viable Products

Engaging customers early in the design process is a best practice for entrepreneurs and product teams, but it comes with challenges. Startups may face limited technical expertise, domain knowledge, time pressures, and funding limitations. The concept of a Minimum Viable Product (MVP) has emerged in response to these challenges. The idea is to build a product version that focuses on a specific and limited part of the problem solution, allowing for validation with customers while conserving resources.

The early versions of MVPs do not need to be fully functional. Designs should facilitate customer feedback and provide real value. By following an iterative approach and continuously improving the MVP based on customer input, startups can navigate the early stages of product development more effectively.

The Minimum Viable Product (MVP) is an excellent approach to test your solution's alignment with customer needs and expectations. The initial definition of this approach comes from Eric Reis, stating, "A Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort." 

The MVP concept has evolved through practice. However, the significant tenets remain, especially the need to build a product version that focuses on a particular and limited part of a problem solution to validate the outcome with the customer. Early MVP versions do not have to be fully functional, but one designs them to solicit customer feedback. Don't strive for perfection, but ensure the product version is "good enough" to illustrate the core features required to solve the customer problem. I consider an essential criterion of an effective MVP to provide some value to the customer. The customer needs to experience some portion of the solution and how it will impact their lives. 

MVPs vs. Prototypes

It's essential to understand the difference between an MVP and a prototype. Prototypes demonstrate and test the functionality, look, and feel of a product idea. In contrast, MVPs test the underlying business hypotheses and assumptions about a product opportunity.

For example, a prototype for a new mobile app would aim to showcase the user interface, navigation, key features, and overall design to get feedback on the concept. Designers may ask users: Do you find this app easy to use? Is the design intuitive? Does it have the right features?

An MVP for the same app may test just the sign-up process to validate whether the target users even want or see value in the core promise of the app. The MVP tests the riskiest assumptions before entirely building out the solution.

Prototypes tend to emphasize breadth - demonstrating multiple features to gauge interest. MVPs focus on depth - thoroughly testing one or two critical assumptions that impact product-market fit. Prototypes evaluate design elements, while MVPs validate business hypotheses. Both play essential roles in product development.

MVP Misconceptions

Some common misconceptions about MVPs are essential to debunk:

• MVPs are not the quickest way to build a product. The goal of an MVP is not to shortcut product development but to rigorously test hypotheses using the minimum effort required. Rushing an incomplete product to market without validating key assumptions risks wasting resources.

• MVPs are not about cutting corners or compromising on quality. While MVPs focus on critical assumptions, they should demonstrate enough value to gain honest customer feedback. A low-quality MVP reflects poorly on the business.

• MVPs do not focus solely on the product. Testing business model assumptions related to the customer segment, channels, revenue streams, etc., are also crucial. An MVP should test the entire business model, not just product features.

• MVPs are not one-time market experiments. They are part of an ongoing process of hypothesis testing and learning. Insights gained shape future MVP iterations.

• MVPs are not just about the first product release. The principles of validated learning apply throughout the product development lifecycle, not just at the start.

• MVPs are not prototypes. In comparison, prototypes demonstrate features and MVPs test assumptions. MVPs can utilize prototypes but have a different intent.

• MVPs are not shortcuts to get to market faster. Time pressures can tempt teams to rush MVPs, which risks building something customers do not want.

In summary, MVPs are about rigorously testing assumptions to gain validated learning, not accelerating product launches. This practice prevents wasting resources on building products that customers do not find valuable. MVPs require discipline to focus on the critical hypotheses that matter most to the business model.

The MVP Approach

Early solution design follows the same experimental testing approach applied to validate all aspects of your business model. You start with assumptions on how the product solves the customer's problem and creates value. Then, you test these assumptions through customer engagement, make adjustments, and repeat the process. As part of the testing process, you should generate outcome measures or metrics that support business model validation. Validating metrics include post-use surveys, web statistics, or specific criteria associated with problem solutions, sometimes called quantifying customer value. Measuring customer value may include how product use has created cost savings, time efficiencies, performance enhancements, or error reductions.

In preparation for planning your MVP testing, it is the perfect time to leverage the knowledge gained from customer discovery and market research to refine your product development strategy, prioritize customer needs effectively, and create a focused and valuable MVP. 

1. Review Customer Discovery and Market Research: Take a comprehensive look at the insights gained from your customer discovery process and market research. Please look at all the data and feedback collected, including pain points, desires, and preferences your target customers express.

2. Prioritize Customer Needs: Analyze the information gathered and prioritize the most critical customer needs. This step involves understanding your target audience's most pressing pain points or requirements. By prioritizing customer needs, you can ensure that your development efforts focus on delivering value where it matters most.

3. Determine Testing Priorities: Once you have identified the most critical customer needs, decide which aspects of your product or service you should test first. This consideration involves specific features, functionalities, or improvements that address the prioritized needs. Testing these elements early on allows you to gather valuable feedback and validate assumptions, enabling you to make informed decisions in the future.

4. Update Journey Map: Take this opportunity to revisit and refine your customer journey map. A customer journey map illustrates the various touchpoints and experiences your customers encounter when interacting with your product or service. Updating the journey map allows you to identify specific stages or interactions that align with the prioritized customer needs. This update will help guide your focus during the early stages of MVP development.

5. MVP Development: With the updated journey map and testing priorities in mind, concentrate on developing the Minimum Viable Product. The MVP should include the key features and functionalities that address the most critical customer needs. By aligning the MVP development with the customer's journey and testing priorities, you can iterate quickly, gather feedback, and make necessary adjustments to enhance the product's value.

The Process

As a starting point, you should define the essential customer experience your product needs to create to assess if the offering solves the problem in the way the customer values it. From initial customer engagement, you should have a shared understanding of the problem, current solutions tested, and expected outcomes. Then, armed with this shared understanding, you need to identify the minimum product features required to provide the customer with the desired results and benefits.

During this process, you can review your current assumptions about what outcomes the customer expects or desires from an effective solution. Articulate customer outcomes clearly and quantify them whenever possible. Along with the outcome review, you should articulate any specific product benefits associated with the customer's needs. Customer outcomes and product benefits are closely associated; your assessment should reflect this relationship.

With customer outcomes and associated product benefits defined, you can prioritize them according to their needs. From your customer discovery activities and research on current market offerings, you will understand how the customer values specific outcomes. Additionally, you should identify existing solutions and where there are potential gaps in the marketplace. One approach to help with this prioritization is the importance satisfaction matrix. Here, you rank the importance of the outcome and the level of satisfaction that the customer has with current, existing solutions. If the result for the customer is significant and the level of satisfaction with existing products is relatively low, you should look to prioritize this need area.

Once you have prioritized the customer outcomes and associated product benefits, you can identify what product features need to be designed and tested. At this point, you determine what your new product has to do functionally to produce a specific outcome and benefit. With a minimum viable products or solutions (MVP) approach, you can identify the minor features required to demonstrate value to the customer. For the entrepreneur, this can be pretty challenging. It takes quite a bit of self-discipline to limit the early testable features. Typically, founders are motivated to get a product out into the marketplace by now, so it is easy to expand the offering, sometimes called feature creep.

The next step is to decide on the best approach to illustrating your product's ability to solve the customer's problem. Early MVP versions can take many forms, such as sketches, graphic depictions or diagrams for physical products, web launch pages, screen mockups, and click-through samples for digital or software solutions. Later MVP iterations take more functional forms such as scaled models, hand-made or 3D printed constructions, or working prototypes.

One of the primary purposes of your MVP is to validate whether you are providing the customer with an effective solution to their problem. In other words, it is crucial to demonstrate to the customer what value your solution can offer them. As always, emphasize to founders that they should always provide value to the customer in every interaction. Offering value is significant to demonstrate how the customer will benefit from your solution.

Considering how to provide value at this stage, the "fidelity" of your MVP is critical. In this context, the fidelity of your MVP refers to the degree that which the customer can experience the real solution. To what degree does the test product solve some of the customer's problems? Do they experience real value, even to a small degree? A low-fidelity MVP provides a glimpse into the venture concept, the look without the feel. A critical missing element is an interaction with the product and some meaningful, minimal outcome.

Finally, you determine what measurements or metrics you will use to validate the learning in these early MVP iterations. Again, asking customers to complete a short survey after reviewing and using the MVP is an excellent start.

MVP Types: Low to High Fidelity

The fidelity of an MVP refers to how closely it resembles and functions like the final product envisioned. Fidelity includes both visual resemblance and interactive capability. Low-fidelity MVPs have limited visual representation and interactivity. They focus on testing hypotheses. High-fidelity MVPs offer more visual realism and robust functionality for hands-on testing. They enable deeper evaluation of the product experience.

Here are several MVP approaches that range from low to high-fidelity methods:

Landing Pages: Simple web pages with brief explanatory text and email sign-up forms used to gauge customer interest before having a functional product. Example: An electric scooter startup creates a landing page to collect customer emails before launch.

Sketches/Diagrams: Rough hand-drawn or digital sketches and diagrams that convey a product's core concept and user flow during the early ideation stages. Example: A single hand-drawn wireframe represents a proposed wedding planning app.

Wireframes/Mockups: More polished digital visual guides demonstrating page layouts, user interface elements, and journey map of a product. Example: Designers show how an e-commerce might work using detailed clickable mockups, 

Paper Prototypes: Hand-sketched or printed models used to gather user feedback on proposed features and designs for physical or digital products. Example: A smartwatch startup uses paper prototypes to illustrate possible watch face designs.

Explainer Videos: Short animated videos digitally illustrating a product's benefits and functionality before being built. Example: A narrated explainer video demonstrates how an Internet of Things product will create a seamless workflow. 

Pre-Order Pages: Web pages allow prospective customers to reserve or pre-order a product to assess demand before it is ready for delivery. Example:  A pre-order page promotes a new action camera before manufacturing.

3D Models: Digital 3D renderings or physical scale models showcase a new product's form, function, and feel. Example: Visualizing a consumer drone through detailed 3D printed models.

Digital Prototypes: Interactive digital representations of a product's user interface and features for hands-on user testing and feedback. Example: Test A travel app via a clickable prototype simulating its UI and booking flow.

Piecemeal/Manual: Leveraging existing tools and manual processes to deliver a product experience before building a solution. Example: A tutor manually creates lesson plans while testing the market for their online platform.

Physical Constructions: Handmade or machined high-fidelity models of a physical product made with final materials to test functionality. Example: An electric bicycle startup machines an early model to test its motor and frame design.

Wizard of Oz: Manually mimicking the functionality of a product behind the scenes to make it appear fully operational. Example: A team books travel for users manually while pretending its travel website works via AI.

Concierge: Delivering a service manually to assess interest, gain insights, and gather feedback from early customers. Example: A house cleaning startup founder performs services themselves for initial customers.

Single Feature: A product with only its core functionality, limiting complexity during early testing. Example: A note-taking app launches with a text editing feature and no formatting options.

The Steps

One of the challenges in designing your minimal viable product or solution is to decide which product features to focus on in early iterations. Here are suggested steps to hone in on the best MVP approaches for your early product testing.

Step 1. Review/Refine Target Customer Assumptions: In this step, you should review the information gathered from your early customer discovery interviews and analyze the results. You should evaluate whether changes or refinements in your understanding of the target customer's jobs, tasks, pain points, and desired outcomes are necessary. Ensure you can test key customer behaviors required to enable specific customer goals. Evaluate which assumptions about the customer are still valid and which may require adjustments or pivots based on the feedback received.

Step 2. Evaluate and Prioritize Product Benefits: Using importance and satisfaction scales, assess the needs of your target customers. Identify areas where their needs are unmet or unfulfilled (high importance/low satisfaction). List your product's benefits based on customer interviews and specific desired gains. Rate each benefit in terms of importance and the current level of satisfaction provided by existing solutions in the market. For MVP testing, you want to focus on a priority customer need area and identify what your product has to do functionally to facilitate support of specific customer goals (see Step 4.)

Step 3. Compare Your Product to Competitor Offerings: Using the importance and satisfaction ratings obtained in Step 2, prioritize the benefits that fall into the high importance, low satisfaction zone. Then, compare your competitors' offerings for each prioritized benefit area. The goal is to identify areas where your product can provide unique customer benefits than competitor products. This analysis helps you differentiate your product and understand its competitive advantages.

Step 4. Identify Essential Product Features: After the previous steps, you will clearly understand which benefits are critical for your target customers and how your product compares to competitors. Now, it's time to identify the essential features that will create value for your customers. For each prioritized benefit, determine the top product features that align with providing the desired benefit. Evaluate the importance of each product feature in delivering the desired benefit to the customer. Additionally, estimate the development time and costs associated with implementing each feature. The goal is to identify features that offer significant customer value while requiring minimal development effort and resources.

Step 5. Select MVP Approach for Early Tests: In this final step, you select the high-value/low-development features identified in the previous step for possible testing with customers. Next, consider the various MVP approaches available (as shown in the MVP Approaches figure). Choose the approach that allows you to demonstrate the look and feel of your solution to the customer with the highest possible fidelity. It should be a prototype or demonstration that showcases the value of your solution effectively while being developed quickly and cost-effectively.

By following these steps, you can focus on the most critical features and benefits, differentiate your product from competitors, and build an MVP that effectively addresses the needs of your target customers for early testing and validation.

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Integrating Behavioral Feedback Loops

Designing a behavioral feedback loop within the MVP process is paramount as it enables businesses to create a dynamic and iterative product that drives user engagement and behavior change. The MVP can effectively guide users toward desired actions and results by incorporating mechanisms that provide customers immediate feedback on critical behaviors and outcomes.

Immediate feedback serves as a powerful reinforcement tool. By demonstrating the connection between specific behaviors and their corresponding outcomes, users can better understand the value and impact of their actions. This feedback loop reinforces behavior change by highlighting the direct relationship between user behavior and the desired outcome. When users can see the cause-and-effect relationship, it becomes easier for them to make informed decisions and adjust their behavior accordingly.

Moreover, a well-designed feedback loop triggers reflection among users. It encourages them to assess their behavior with the desired outcomes and identify areas for improvement. This reflective process allows users to self-assess and make necessary adjustments, leading to more efficient and effective use of the MVP. An effective behavioral feedback loop facilitates behavior assessment and increases motivation and engagement with the product. When users receive timely feedback and witness the positive outcomes of their actions, it creates a sense of accomplishment and satisfaction. This positive reinforcement fosters motivation, encouraging users to remain engaged with the product and continue exhibiting the desired behaviors.

By incorporating a well-designed behavioral feedback loop, the MVP process becomes a collaborative journey between the user and the product. It empowers users to shape their experience and achieve desired outcomes actively. Additionally, this feedback loop allows businesses to gather valuable data on user behavior and preferences, which can inform future iterations and improvements to the MVP.

In conclusion, a thoughtfully designed behavioral feedback loop within the MVP process has a profound impact. It provides immediate feedback on critical behaviors and outcomes, reinforces behavior change, triggers reflection for self-assessment, and increases motivation and engagement. By integrating this feedback loop, businesses can create a user-centric MVP that drives meaningful engagement and delivers value to both the users and the business.

Co-Creating the MVP with Customers

Customer co-creation is a collaborative process of engaging target customers to shape the design and development of an MVP. Rather than building an MVP in isolation, startups can involve customers early to ensure the product resonates with user needs.

The co-creation process typically begins by clearly describing the problem the startup aims to solve based on insights gathered from customer discovery interviews. Customers share their experiences with the problem and provide recommendations on potential solutions.

Next, the startup shares early MVP prototypes or demonstrations. Customers give feedback on proposed features and functionality. The goal is to gain insights into how customers would solve the problem themselves and what they find most valuable.

Co-creation enables startups to build customer considerations into the MVP from the outset. Customers feel invested in solutions they help shape. Their input guides startups to build features that closely align with customer needs and desires.

Effective co-creation provides customers with visual stimulus and opportunities for hands-on engagement with early MVP versions. This arrangement creates a collaborative product development journey rather than simply presenting finished ideas.

Gathering Actionable MVP Feedback

The approach to gathering feedback may differ depending on the fidelity level of the MVP. Low-fidelity experiments may rely more on qualitative feedback, while high-fidelity MVPs enable quantitative data gathering.

For low-fidelity MVPs, focus on gathering qualitative feedback through customer interviews, surveys, and user observations. For high-fidelity MVPs, also incorporate quantitative data like usage analytics, conversion rates, and other metrics to complement user insights.

The type of feedback collected can vary based on MVP fidelity. Low-fidelity experiments lend themselves to exploratory qualitative insights like interviews and surveys to understand user perceptions. High-fidelity MVPs allow more quantitative data through metrics like conversion rates, retention, and usage analytics to understand behavior.

Generally, the feedback gathered from MVP testing should be qualitative and quantitative. Qualitative feedback from open-ended interviews and surveys provides insights into how customers respond to different product attributes and where they experience friction.

Quantitative data on conversion rates, usage metrics, sales, and other metrics shed light on the market viability of different business model assumptions.

Connecting insights directly to the hypotheses and assumptions framed before testing is essential to make the feedback actionable. The feedback validates whether to persevere or pivot regarding specific assumptions.

Facilitating this connection throughout the MVP development and testing process is crucial. Business model canvases and other frameworks can help link feedback to original hypotheses. Ongoing documentation of insights gained, decisions prompted, and results achieved is invaluable.

MVP Metrics

When evaluating an early Minimum Viable Product (MVP), shifting the focus from customer acquisition to customer engagement is essential. While acquiring users is crucial, understanding their enthusiasm and satisfaction with the product's outcomes during the testing phase provides valuable insights. Several metrics are available to measure customer engagement effectively.

One significant metric is how quickly customers perceive value in the MVP. Can users recognize the benefits and advantages the product offers shortly after interacting with it? By assessing the speed at which users grasp the value proposition, it becomes possible to gauge the effectiveness of the MVP in addressing customer needs.

Another metric of importance is the number of active users engaging with the MVP. This metric indicates the level of interest and adoption among the target audience. Monitoring user activity and tracking the growth in active users makes it apparent whether the product resonates with customers and captures their attention. Additionally, measuring the rate at which the MVP reaches new customers is crucial. This metric provides insights into the product's reach and ability to attract a broader audience. Analyzing how quickly new customers are onboarded and assessing their level of engagement allows for a better understanding of the MVP's scalability and market potential.

Additionally, observing customer feedback and recommendations can provide valuable insights into the success of the MVP. Are early customers actively recommending the product to others? Positive word-of-mouth and customer advocacy indicate that the MVP resonates with its target audience and delivers value. Monitoring customer sentiment and gathering feedback makes it possible to identify aspects of the MVP working well and areas that may require further improvement.

By focusing on these customer engagement metrics, such as the speed of perceiving value, active user count, customer reach, and recommendations, businesses can gain valuable insights into the success and potential of their early MVP. These measurements go beyond acquisition numbers and provide a holistic understanding of customer satisfaction and enthusiasm during product testing.

Early Iterations

After finalizing the initial MVP design, you can build the early iterative prototypes to test with customers. Each iteration should validate a critical assumption or address the core customer problem. By paring down features to only those essential for testing, you can quickly demonstrate whether your solution effectively solves the primary customer need. Eliminating any non-essential features or distractions is crucial in these early iterations.

This focused, iterative approach allows you to confirm you have the right problem-solution fit before moving forward. It reduces wasted development time on unnecessary features and ensures you are on the right track with a customer-centric solution.

The feedback gathered from each iteration should directly inform priorities for future iterations. Carefully evaluate the insights received from customers to determine focus areas and requirements for subsequent MVPs. Use these findings to validate problem-solution fit.

When adding features in later iterations, evaluate whether each potential addition will measurably improve the user experience. Seek direct customer feedback to prioritize additions that create the most value. You may also leverage iterations to start testing pricing and willingness to pay. Offering early access at a discount shows appreciation for participating customers and provides pricing validation.

Conclusion

The minimum viable product is a core concept of the lean startup methodology that enables startups to validate their fundamental business hypotheses through real-world experiments. By engaging customers early in development, startups can gain crucial insights that inform strategy and planning.

Effective use of MVPs allows startups to focus their limited resources on testing risky assumptions rather than over-investing in product features before achieving product-market fit. The emphasis is on learning through rapid iteration and customer feedback versus lengthy isolated development cycles.

This article has covered various aspects of the MVP process relevant for startups, including origins, misconceptions, gathering feedback, co-creation, MVP types across the fidelity spectrum, and iterative development.

While pioneered in startups, the underlying principles of experimentation, customer engagement, and agile development can benefit companies of all sizes and industries. The core lean startup practices enabling startups to operate amidst uncertainty and constraints can also drive innovation initiatives in larger established organizations.

By embracing an MVP approach, companies can release better products fit for market needs, improve customer experiences, conserve development resources, and build market traction. The real-world insights generated through MVPs provide the foundation for data-driven strategy and development.

In today's uncertain and rapidly changing business landscape, testing ideas quickly and integrating customer insights is critical. For startups and established companies, MVPs represent an indispensable tool for accelerating learning and enhancing the product development lifecycle.