Minimize Your Risks with Minimum Viable Testing – MVT vs. MVP Explained

While MVP testing can certainly work for startups, it still poses significant risks.

What is a Minimum Viable Product (MVP)?

An MVP, or Minimum Viable Product, is a development strategy popularized by the Lean Startup methodology. It refers to the earliest version of a product that can be launched to gather validated learning about customers. This initial version prioritizes core functionalities that deliver the essence of your value proposition. The goal is to test core assumptions with real users as quickly and inexpensively as possible. By gathering user feedback on this basic version, you can iterate and improve your product based on real-world data, ultimately increasing your chances of success.

What Are Some Risks to the MVP Approach?

You don’t do enough testing: Very often we see that teams are not rigorous enough in their customer research and testing phase. Instead of precisely testing their critical hypothesis, they consider early positive signals as validation. Biased towards a certain solution, they are often not rational and unattached enough to find an approach that actually works at its core.

You overestimate the scope of your vision: If you are building a new product, it is tempting to get lost in the visionary potential of your products. While this mindset is valuable, it must be accompanied by a clear understanding of how the business can work bottom-up. Successful products are not defined by a multitude of features, but a singular and essential one.

You prioritize company-building over finding product/market fit: Establishing the foundation of a company should take a backseat to delivering value and establishing PMF. Whenever possible, avoid attaching yourself to unnecessary tasks until you have a clear understanding of how you will create value and for whom.

Instead of immediately building and testing the product in the market, Minimum Viable Tests (MVTs) enable you to assess the validity of your assumptions precisely, particularly for startups facing limited resources and high uncertainty.

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What is the Minimum Viable Test (MVT)?

Minimum Viable Testing (MVT) is a process for validating a fundamental hypothesis that is critical for a company’s success. It involves conducting tests focused solely on specific hypotheses related to the market. One advantage is that it allows you to build a company even without technical expertise. By consistently testing ideas before involving a technical co-founder, you can demonstrate demand for your product using concrete evidence, which is more appealing to potential technical team members. Engineers appreciate data and evidence rather than unrealistic concepts. Needless to say, investors will also be much more impressed if you have clear numbers backing up your core hypothesis prior to funding.

Real-world examples of MVT

Now let’s explore some real-world examples of start-up tests conducted through MVTs.

MVT Example 1:

Value proposition:

A company that aims to enhance the quality of online education by offering a platform for cohort-based courses.

Risky assumption:

The main risk is that people may not be willing to pay a higher price for a cohort-based course compared to an asynchronous course.

Atomic unit test:

The atomic unit being tested is a cohort-based course. In this case, the primary risk is profitability. Cohort-based courses are more expensive to produce, so the MVT aims to determine if consumers are willing to pay a significantly higher price for this format.

It aims to gather nuanced results that can influence future go-to-market decisions. It may uncover insights such as specific customer preferences.

Solution:

A single course is run in a subject area they are familiar with. They partner with an established figure, leveraging their existing business and avoiding the need to build a marketing machine from scratch.

MVT Example 2:

Value proposition:

A company aims to revolutionize food delivery by providing fast and healthy meals.

Risky assumption:

The main risk is that the operational aspects of food delivery will become unmanageable.

Atomic unit test:

The atomic unit being tested is a delivered meal. The goal is to assess the feasibility of delivering meals to customers quickly without establishing a restaurant.

Solution:

A private chef is used for the test. They ask friends to order via Eventbrite. The dispatch is managed using a map, with drivers recruited from friends. In just two weeks, a restaurant-like service is set up.

The goal is solely to demonstrate that food delivery operations can be handled using a distributed fleet of cars.

Steps to implement MVT in your startup

Step 1: Identify your value proposition.

Define the promise of your idea and why users would be interested in it. Focus on users’ actions, as they often reveal their desires and needs.

Find a value proposition that aligns with their actions and avoids complex ideas. Successful companies like Stripe, Airbnb, Dropbox, and Uber had remarkably simple value propositions, even if their solutions were complex. Aim for a value proposition that is a no-brainer.

Step 2: List your risky assumptions.

Identify the main risks that could hinder the success of your idea or break your system. The riskiest assumption is that people want what you’re building. Many founders fail to list “people want this” as one of their top assumptions.

Execution risk is another concern; great ideas often fail when they don’t work in reality.

Marketing is also a common challenge. Determine if you have enough knowledge about your market to know how to sell your product and who will buy it.

Assess the market size and consider profit margins.

Identify the risks associated with pricing your solution relative to its delivery cost.

Step 3: Test the atomic unit.

Focus solely on what you plan to sell. For Google, it’s a search query, and for Amazon, it’s the process of ordering a book online.

Select one risky assumption at a time and test it individually.

Design tests for each assumption. For execution-related assumptions, test the most primal way of delivering the goods. If the riskiest hypothesis is whether people will want your product, make them pay for it with their time or money.

Avoid building everything during the test; instead, focus on testing the hypothesis itself. Choose a clear and specific atomic unit that represents your product. Consumers rarely buy into a company’s overall value proposition; they purchase specific items.

MVT vs. MVP: Validating Critical Assumptions for Startup Success

When it comes to validating ideas and gathering feedback for a new venture, two common approaches are the Minimum Viable Product (MVP) and the Minimal Viable Test (MVT). An MVP is a basic version of a product that simulates the entire offering, allowing entrepreneurs to test their solution against the target market. In contrast, an MVT is a targeted test of a specific, critical hypothesis that must be true for the business to succeed, without focusing on the complete product. While an MVP is like building an entire car, an MVT is more akin to testing whether an electric or gas engine is more suitable for the car’s drivetrain. By using MVTs, startups can validate or invalidate key assumptions quickly and cost-effectively, making informed decisions and iterating rapidly. This lean and agile approach helps entrepreneurs navigate the challenging landscape of startup growth, ensuring they build their company on a solid foundation of validated hypotheses.

What comes next?

Once your MVT gives you clear, quantifiable, and positive signals on the most relevant risky assumptions, you can move on to building your MVP with greater confidence. But remember, the MVT process isn’t a one-time thing. It’s an ongoing cycle of learning and refinement that should continue throughout the life of your startup. Here’s a roadmap for what to do after a successful MVT:

1. Refine your Value Proposition: Based on the insights learned from your MVT, revisit and solidify your value proposition. Did the MVT reveal any unexpected user preferences or pain points? Integrate this new knowledge to ensure your MVP truly resonates with your target market.

2. Prioritize Features for your MVP: Don’t be tempted to cram every feature into your MVP. Use the MVT results to prioritize the most critical functionalities that deliver the core value proposition. This will allow you to launch your MVP faster and with fewer resources.

3. Develop a Minimum Viable Product (MVP): With a clear understanding of your target market and validated core assumptions, you can now build your MVP. Focus on creating a functional version that embodies the essence of your product or service. Remember, the MVP is designed to gather further user feedback and validate product-market fit, not to be a fully-featured masterpiece.

In Conclusion

MVTs offer a powerful tool for startups to refine their approach before diving into MVP development. They can significantly reduce risk by validating core assumptions and ensuring you’re building a product that truly solves user problems. This doesn’t negate the value of MVPs – they remain an essential part of building a company. However, by prioritizing MVTs first, you can minimize wasted time and resources, ultimately making your MVP testing process more effective.

Do you have questions about MVTs and MVPs or want to dive deeper into this topic? Feel free to contact me! I’m passionate about empowering startups with the knowledge and tools they need to thrive.