Guess what? 21.9% of businesses fail within their first year of operation. This statistic can feel daunting as an aspiring entrepreneur and business owner. However, looking at the two main causes of failure is key before you make your final determination around business launch.
Business failure often comes down to two main reasons: lack of product-market fit and clarity around your MVP – or minimum viable product. Thankfully, both of these risks are easy to mitigate with the right strategies in place and with continuous evaluation to ensure that your customer is getting the most value possible.
Below, we’re exploring what product-market fit and MVP are in a practical application, how to define each and how these two factors can work together for the success of your business.
Read on to learn more about MVP and product market fit.
What is product-market fit?
Your product-market fit is a determination of how impactful your product or service will be to your targeted pool of prospects. This is vital to determine from the very conception of your business, as it will drive every other factor (such as revenue projections, MVP, marketing profiles, etc.).
There are many ways to do this, including:
- Competitor analysis
- Niche analysis
Remaining flexible in your vision and agile in your approach can help you to more quickly determine your fit and your potential for success. While niching down is helpful in determining what you’ll offer and who you’ll offer it to, it must be paired with an analysis of how relevant your product or transformation will be to your future clients.
What is MVP?
Your MVP is your minimum viable product – which is the most basic form of your final end product that you could use to keep your business going. This is critical to define, as it will act as your first prototype skeleton that you can continue to iterate on. As you define this for each product or service, you’ll be able to iterate further and find new ways to add value, defining new levels of success for both your business and your clients.
How do MVP & product-market fit work together?
MVP and product market fit are your business’ weapons against the risks of the dreaded “first-year curse,” helping you to avoid failure where possible. Being able to clearly articulate what service or product you’re providing to clients will help you to more quickly establish your brand and dial in your messaging – two essential tasks for securing a solid revenue stream.
How do I define my MVP?
Determining your MVP can be broken down into five simple steps:
- Start big, and scope down. Don’t be afraid to limit anything from your vision. Thinking big helps you to make sure nothing is missed and gives you plenty of room to scope down with once you have it all on paper. Crowdsourcing can help too, as you’ll get direct input from your potential pool of prospects.
- Find your core. Prioritize which elements of the vision are essential to function. Be concise, here.
- Determine if the minimum fits your market. This requires brutal honesty and may require you to go back to the drawing board. Keep an open mind – this will help you to solidify your success later.
- Summarize your final version. Finally, summarize your MVP in a single statement or package that you can reference as you begin to build your business and refine your marketing strategy.
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