The MVP Approach and The Post MVP Journey

With a career spanning T-Mobile, National Semiconductor, Facebook, and multiple hi-tech startups, I have firsthand experience in taking innovative ideas from conception to market success, generating billions of dollars and reaching hundreds of millions of users. Aditionally, I have advised hundreds of startups, gaining valuable insights into common pitfalls and effective strategies. Whether building AI-driven enterprise solutions, climate-tech B2B products, or consumer e-commerce mobile apps, the MVP (Minimum Viable Product) approach and the post-MVP journey have been instrumental in reducing risk and accelerating development.

Let's explore how you can leverage the MVP framework to not only speed up your development process but also create products that resonate deeply with your users at scale.

Minimum Viable Product (MVP) is a methodology to reduce risk and increase speed in development. The concept has been around for over 20 years. MVP is a milestone in the new product development journey and not the destination. The milestones in the new product development process are illustrated in Figure 1. 

Figure 1: Building zero to n products

Lately, in Silicon Valley, building new products from scratch to MVP is referred to as "zero to one" products, and transforming an MVP into a commercial product with scale is referred to as "one to n" products. 

The method I am outlining is not necessarily linear; steps 2, 3, and 4 can happen in parallel. However, all the steps except the first and the last (hypothesis and commercialization) act as gates. These gates can indicate that the hypothesis does not match reality, necessitating a change in the hypothesis. Think of steps 2, 3, 4, 5, and 6 as gates you must pass through.

Let's look at the steps and the common errors: 

1. Hypothesis: Product development starts with an idea, which needs to be framed as a hypothesis. This hypothesis should address the customer problem the idea solves, and outline assumptions about the team, market, technology, capital needs, etc. Writing down the hypothesis and listing all assumptions helps clarify thinking. For example, if your idea is to create a new home robot, you need to determine what problem it solves for users—household chores, emotional support, or entertainment. Your assumptions about human behavior at home, manufacturing, cost, and willingness to pay will shape your hypothesis.

Common Error: Not reframing the idea into a user problem based hypothesis. 

2. Concept Testing (POC): Understanding users' mental models, the benefits they will derive from the product, and giving them a reason to believe are fundamental to concept testing. A Proof of Concept (POC), a hack put together to solve the intended user problems, helps uncover challenges in building the product. For example, a POC for an emotional support robot could be a simple prototype, such as an array of LEDs organized like a dog's face that shows a smiley face when touched.

Common Error: Building POC as an early version of the product. 

3. Market Feasibility: Determine if there is a market for the product by creating multiple digital marketing campaigns (A/B testing) to gauge interest, using CTR (Click Through Rates), conducting surveys, and studying competition. Understand the customer willingness to pay, market size, the right market segment or vertical to target, and what the MVP needs to include to be appealing. For instance, ask people to join a waitlist for an emotional support robot.

Common Error: Not conducting A/B testing

4. Technology Feasibility: Assess if the necessary technology exists to build the product and create a unique user experience (UX). Determine the time and cost required to develop new technology, dependence on vendors, architecture, scalability, and hiring needs. For example, it might initially cost $500 per robot to build 100, but this cost could drop to $100 per unit when scaling up to 100,000 units annually.

Common Error: Ignoring the UX. 

5. MVP: If market and technology feasibility are confirmed, define the target user group for the MVP. The craft of product management is crucial in determining what features to include. While building the MVP, start figuring out the go-to-market strategy, sales enablement (if applicable), fulfillment (for hardware products), key performance indicators (KPIs), etc. Remember, for the customer, the MVP is a real product they are willing to pay for. 

Common Error: Building a non-MVP, i.e., an unviable product or a commercial product that costs a lot of time and money. 

6. Customer Validation: Understand the entire user journey with the MVP to see if users interact with the product as per your hypothesis. Identify what works, what doesn’t, and whether many customers request the same features or improvements. Evaluate the customer acquisition cost (CAC) and test different pricing models. Develop a process for customer feedback and iterate quickly on the MVP. This step provides vital signals for commercializing the product.

Common Errors: Not paying attention to CAC; blindly building what customers ask for without a cohesive product strategy for the product’s evolution. 

Post MVP Journey 

Many startups reach this MVP point but fail by not iterating enough to become the best available option in their targeted market. 

Figure 2: The lure of big markets vs the power of niche dominance

Figure 2 shows two options for the Post MVP Journey: 

Option A: Represents the tempting but often premature path of expanding into new market segments (SMB, Mid-Market, Enterprise) or verticals (different industries) before fully establishing a strong foothold in the initial target market.

Option B: Illustrates the more strategic approach of focusing on dominating the initial niche market through continuous product improvement for increased benefits the customer drives from the product and targeted sales/marketing efforts. This builds a solid foundation for later, more successful expansion into adjacent markets.

Let's understand the options with an example. After launching an MVP, a B2B startup targeting the hospitality vertical for small to medium-sized businesses (SMBs), what should you do?

Option A - Start selling the product to new market segments (Mid-Market, Enterprise) and/or new market verticals (retail, financial services, tech, automotive, etc.). However, the product was not designed for these markets. This can lead to wasted resources on sales and marketing without much return. MVP offers limited benefits which are good enough for a small user group but not for everyone. 

Venture capitalists often prefer this option for fast growth and big markets. Unless you have an unlimited amount of money and you can significantly increase the size of your product and engineering teams, this is not a good option for startups. 

Option B - Continue improving the product for users, i.e. product benefit, in the initial niche and become a leader in that market. Allocate funds for sales and marketing as revenue grows. In parallel, identify new markets with similar user problems and develop the right go-to-market strategy. Iterations after MVP are crucial for learning and expanding into new markets.

When iterating between customer validation and MVP, develop a cohesive product strategy. Building everything users ask for limits success. As your customer base grows, consider making the product modular and scaling the infrastructure to support more customers. 

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Side Note: 

My friend, Gro Dyrnes, pointed out that companies with large product portfolios, often bigger companies or companies in the growth phase, sometimes become trigger-happy and go straight from idea to MVP in the market without proper hypothesis testing. I have also observed that large companies can spend years between MVP (built with no hypothesis testing) and Customer Validation until there is a reorg and the project is killed :) 

Gro also commented that a common challenge in the Nordic region is that startups become so focused on the technology that there is no money left for sales and marketing, the common misunderstanding being that a good product sells itself. Of course, this does not happen and the show goes on until the money runs out. 

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Figure 3: Art of balancing

7. Commercialization: As you become a leader in one specific market, it is fine to start targeting multiple new markets in parallel. Again, maintaining a cohesive product strategy helps. Almost everyone will want new and different features, you build what works within the product strategy. Here also I recommend a slow and thoughtful approach to always strengthening the core of the product and aggregating segment specific features. With market experience and user insights, you will uncover new user problems you can solve (Figure 3). Practically, when you sell to enterprise customers, you have to customize the product to their needs with the right integrations into their existing systems. You will need to hire solution engineers or sales engineers. If you have picked the right architecture and have made the product modular, it is possible to have good UX for everyone. The goal of every startup is to end in the top right corner of Figure 2. 

Common Error: Not adjusting the "zero to one" product development approach for the "one to n" product approach. 

The journey from an idea to a commercialized product is a dynamic and iterative process. Following the MVP methodology helps reduce risk and increase speed, but it's essential to remember that this is just one phase of a larger journey. By rigorously testing hypotheses, validating market and technology feasibility, and iterating based on customer feedback, you can navigate through the complex gates of product development. The ultimate goal is to evolve your MVP into a scalable product that meets user needs and stands out in the market. Keep a clear product strategy, stay adaptable, and continuously learn from each iteration.