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Startup MVP vs. EVP: What to choose?

					
Yana Troianska
Copywriter

April 17, 2018

Media reminds us that we live in a golden era of startups. Becoming an entrepreneur has become as easy as ever before. Just come up with the idea, hunt up a business partner, find investments, and you are good to go.

At 23 years old, Tony Hsieh and Sanjay Madan managed to create their first startup LinkExchange and, one year later, sell it to Microsoft for $265 mln. Impressive, isn’t it?

Why startups fail

We live in incredible times when everything is possible. In 2016, Startup activity in the USA reached the record mark and almost overtook the level of Internet bubbles in 1996. The more startups emerge, the more they fail. To avoid failure, you have to understand the reasons.

According to CB INSIGHTS, most startups suffer from not knowing their target audience. Almost 42% of new enterprises failed because there was no market need for the product or service they offered. Among other reasons are a lack of money and an inconsistent team.

startup mvp

In this article, we want to investigate the first reason for startup failure. Founders can fix this problem with the right tools at the initial stages of startup creation. Before starting any business, the founder has to research the market and identify the target audience. There should be a clear understanding of the potential customers, their likes and dislikes. Judging by the previous sad statistics majority of aspiring entrepreneur neglect such research.

If you start your own business, very often, you can’t rationally evaluate your project. You have the feeling that you are starting something big that is going to change the world. Also, a big mistake is to identify yourself or your close surroundings as the target audience. You don’t want to find out after the launch there is no one interested in the product.

Treehouse logic made such a mistake. It was a company that developed a product customization platform. Founders, the IT engineers, mistakenly thought if they served their own needs, they would fit the market’s needs. In reality, their customers were not IT engineers but self-service small businesses. This mistake costs Treehouse success.

MVP for startups

Overcoming the problem of not knowing your customers’ needs can help an MVP. The minimum Viable Product (MVP) is the product prototype that owns the essential functions and requires less funding than the end product. MVP aims to launch a viable product as soon as possible with minimum costs. This approach allows you to collect user feedback for the primary product and incorporate it in future iterations.

Nick Swinmurnwas, the founder of Zappos, had an idea to sell shoes via the Internet. In 1999 it seemed crazy to sell footwear without fitting, so no one did that.

Nick took photos of shoes in the local stores to eliminate risks, learn the demand, and then posted them on the Internet. When he received the order, he went to the store and bought the requested pair of sneakers. This model illustrates how at first, the entrepreneur can test the idea with minimum costs and examine the demand on the market. Nick come up with an MVP of his future shoe business.

Creating an MVP is all about finding the right balance between giving users what they need before you are entirely sure of every function they will want later on. The purpose of MVP is to test the hypothesis. Usually, it is based on customers’ usefulness and willingness to purchase.

Do not perceive MVP as a “draft version” made in a hurry, which can be thrown away after the deployment. It is the version that is going to bring feedback about your product. The feedback will make you the entrepreneur whose product successfully enters the market. Nick Swinmurnwas hypothesizes that people can buy shoes online without fitting in. This assumption brought him success.

MVP sucks, EVP rules 

The concept of MVP was quite a long time around and proved to be useful. Although, the attitude towards it starts to change. The founder of Moz, Rand Fishkin, declares that “MVP Kinda Suck.” His article explains that MVP frequently cannot produce exceptional value. Therefore, it is difficult for such a product to earn attention and attract early influencers.

Rand tells us that a good startup makes people religious about it.  MVP cannot provide such an effect, but EVP can. Moz founder introduces the concept of EVP –  Exceptional, Viable Product.

 

startup mvp

The concept suggests making a product as perfect as possible before release. It is a long way of polishing, developing, and improving. Unlike the MVP, there is no product with the basic functionality, only the close-to-done version, that can surprise and capture users. And most important, the product has to turn users into brand evangelists.

Fishkin suggests creating an MVP and testing it on your team and a few select customers first. You can release this exceptional product when you collect feedback from testers and incorporate it into the next version of the product. EVP acts like an advanced version of MVP. Do not launch the product with minimum functionality to the customers but test it first in-house to offer a ready solution with exceptional and relevant features.

This concept seems logical and economically viable, but we are skeptical concerning some aspects.

Firstly, if you test MVP on yourself and your team, it is doubtful that feedback will be reliable. Stakeholders are not the users of the product. Their desires and preferences do not necessarily match the wishes and preferences of the end users. Moreover, testing the MVP in-house does not provide specific data on whether the product resonates with the market’s needs.

Secondly, the process of creating an EVP takes a while. Let’s make some rough calculations, building an MVP takes 3 to 4 months, testing – 1-2 months, and shaping an EVP – 1-3 months. At best, you will spend half a year on development. This period may be crucial for the startup, as there is nothing new in this world. Any time you can be beaten up by someone who released faster.

Where is the golden meal?

Business is an overwhelming activity. It involves risks and difficult decisions, and you must be strategic and visionary to stay afloat.

We believe that balance is a crucial factor in a successful business.

If you are thinking about starting a startup, it is the right decision to define the target audience and check the demand on the market.

If you are deciding between MVP and EVP, analyze your current position. If you have money and time to go with EVP, do it. And yet, it better refrain from testing it in-house. Find a group of potential customers and allow them to use a product for free. It won’t bring you money but will provide you with relevant and useful feedback.

Returning to Fishkin’s idea to make customers religious about the product, the right marketing can handle this mission. Try to advertise it before even having the real product. The well-known resource Hubspot was started as a blog. Later on, when Hubspot increased its captive audience, it began to offer a unique product that was pulling customers far beyond just blog readers. The blog was a pre-selling marketing tool that helped to build a strong community of potential customers.


Check out our article about companies that successfully followed the MVP approach


 

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