How To Navigate The Uncertainties Of The MVP Phase

As a tech founder, tackling the most uncertain aspects of your product early on is paramount. This approach builds investor confidence and validates the market need for your product.

Investors take notice when you show that you're fully aware of potential challenges and have devised strategies to mitigate these risks. They're more inclined to support founders who demonstrate a comprehensive understanding of their market and the obstacles ahead, along with a clear plan for navigating through them. It's about proving that there's a real demand for your solution and showcasing your venture's growth potential, key factors in attracting investment.

What’s more, addressing product uncertainties enables you to pinpoint exactly what expertise and skills are needed within your team to overcome these hurdles. It’s about building a team that's not just talented but perfectly aligned with the challenges at hand, ensuring a higher probability of success. When your team feels invested in the product's success and is actively part of the solution, their commitment and motivation skyrocket. 

Taking the time to address these uncertainties early on isn’t just about minimizing risks—it's about setting a solid foundation for your startup, convincing investors of your venture’s worth, and assembling a team that’s as dedicated to your vision as you are.

Let’s take a look at some of the most critical uncertainties to consider, and how you can overcome them.

The common uncertainties of building an MVP

Market fit and user demand

Perhaps the most significant uncertainty is whether the product will meet an actual market need. It's crucial to validate that the problem you're solving is significant enough for users to care about and whether your solution is something they would use or pay for. This involves understanding your target audience deeply and often requires iterative testing and feedback collection. 

How can you do that?

• Conduct thorough market research to validate your product idea and ensure it solves a real problem for a sizable market.
• Develop a clear value proposition that succinctly communicates the unique benefits of your product to potential users and investors.
• Leverage lean startup methodologies like building a minimum viable product (MVP) to test market hypotheses quickly and cost-effectively.

Prioritizing features

Deciding which features to include in the MVP can be challenging. The goal is to launch a product with enough features to attract early adopters but not so many that it dilutes focus or unnecessarily extends development time. Balancing core functionalities with a minimal feature set that still provides value to the user is a delicate act.

How can you do that?

• Focus on the core features that directly address your users' main pain points and deliver clear value.
• Use the MoSCoW method (Must have, Should have, Could have, and Won't have) for prioritizing development tasks to ensure you're working on the most critical aspects of your product.
• Engage with your target audience early and often to validate your assumptions about necessary features.

Technical Uncertainties

Early-stage development is fraught with technical uncertainties. These can range from the choice of technology stack and architecture to scalability and security considerations. There may be unknowns about how certain technical decisions will impact future development or integration capabilities.

How can you address this particular challenge?

• Choose flexible and scalable technologies that allow you to adapt as your product evolves and grows.
• Invest in a solid architectural foundation that can support future development, integration, and scaling needs.
• Consider technical debt as a strategic tool; some shortcuts are acceptable in the short term if they speed up learning and iteration, but plan for their eventual resolution.

Resource Allocation

With typically limited resources at this stage, deciding where to allocate time, money, and human resources is critical. This includes balancing product development with marketing efforts, customer support, and other business functions.

How can you do that?

• Adopt agile development practices to maximize efficiency and adaptability in your development process.
• Balance your budget between product development, marketing, sales, and other critical functions to ensure sustainable growth.
• Outsource non-core activities if it's cost-effective and allow your team to focus on what they do best.

Regulatory and Compliance Issues

Depending on the product and the industry, there may be significant uncertainties regarding regulatory requirements and compliance. These can affect product design, data handling practices, and even the business model.

How can you manage these?

• Engage with legal experts early in the development process to understand the regulatory landscape of your industry.
• Incorporate compliance and data protection into your product design from the outset to avoid costly revisions down the line.
• Stay informed about changes in regulations that might affect your product or business model.

Feedback and Iteration

Collecting and acting on user feedback is vital during the MVP phase. There's always uncertainty about how much feedback will align with your expectations or plans and how it should influence the product's development.

How can you do that?

• Develop a systematic approach to collecting, analyzing, and acting on user feedback.
• Iterate quickly, using feedback to refine and improve your product continuously.
• Foster a culture of openness to change within your team, emphasizing the value of user insights in guiding product development.

We recently shared The UX Blueprint for Building MVPs so make sure you check that out.

Time to Market

The speed at which you can develop and launch the MVP is crucial. There's uncertainty about how quickly the market might change and whether competitors may introduce similar offerings. Timing can significantly impact the MVP's reception and success.

How can you ensure good timing?

• Set realistic timelines and milestones for your product development, allowing for flexibility as you learn and adapt.
• Prioritize getting to market quickly with a viable product over perfection. Early user feedback is invaluable for refining your product and business model.
• Monitor the competitive landscape closely but focus on delivering unique value to your users rather than reacting to every move your competitors make.

Most founders are looking for certainty

Over the last 14 years, the most common pattern we’ve seen in founders is a search for certainty. Specifically, the certainty that the product they have in mind can be delivered 100%. Even after following all the steps we recommended above, which are part of our product development process, we can never guarantee the outcome. 

Even if we follow the “recipe” described above, we can only get closer to a marketable, functional product, that has the necessary elements to attract funding and fulfill user needs. 

With every conversation, context is essential - it will dictate the progress we can make within a set timeline and also the compromises we need to agree on. The most common reality is that:

• Markets are dynamic 
• Funding falls through
• Client acquisition is highly unpredictable for an early-stage product
• The composition of the founding team changes
• Every stage brings new information
• Users will react in certain ways, not always predictable

Certainty is not on the table, but adapting to change is something we’re very good at. This is one of the drivers of success when it comes to making products that our clients are satisfied with.

How much is the MVP going to cost? 

Most people might classify this as the biggest uncertainty. In our experience, it’s as important as the certainty of the outcome.

The best we can offer before using the process described above is a range. The cost of developing an MVP (Minimum Viable Product) can vary significantly depending on the complexity of the product, the size and experience of the development team, and the specific needs and goals of the project.

However, as a general rule of thumb, you can expect to pay between $160,000 and $350,000 for an MVP with a full product team consisting of a PO (product owner), UX/UI designer, Software delivery lead, three developers, and a QA engineer.

For this exercise, we’ll walk you through our calculation process. Here are the main steps we take: 

Requirement Analysis

The first step is a thorough analysis of the product requirements. This involves understanding the core features that need to be developed, the problem the product aims to solve, and the target user base. The more detailed and clear the requirements, the more accurate the cost estimation. The best way to do this is through a Strategic Ideation & Discovery Workshop, part of our Product Discovery Sprint offering.

Scope Definition

Based on the requirements analysis, we define the scope of the MVP. This includes identifying key features that are essential for the MVP and can provide immediate value to the users. The scope helps in determining the workload and the resources needed.

Resource Allocation

Next, we decide on the team composition required to develop the MVP. This usually includes software developers, UI/UX designers, project managers, and QA specialists. The cost and number of resources depend on the complexity of the MVP and the expertise level needed.

Technology Stack Selection

The choice of technology (programming languages, frameworks, databases, etc.) can significantly impact the cost. Some technologies might require more specialized skills or are more time-consuming to work with, affecting the overall price. Based on our evaluation, we'll propose a tech stack and an architecture for your product.

Time Estimation

Based on the scope and resources, we estimate the time it will take to develop the MVP. This is usually presented in man-days, considering the development, design, testing, and deployment phases.

Costs

Based on the steps above, we discuss rates and make an offer. Here are some factors that influence these ranges:

Simple MVPs

Basic apps or web products, with standard UI components and minimal integrations, can be on the lower end of the cost spectrum.

Moderate Complexity MVPs

Products that require custom UI/UX design, more complex functionalities, or integration with other services can see costs in the mid-range.

High Complexity MVPs

Solutions that involve advanced technologies like AI, blockchain, or extensive data processing can push costs toward the higher end.

In this stage, we also consider additional costs. This can be third-party services or APIs, server costs, or any other tools required for the development of the MVP.

Another element to consider is the post-launch costs such as marketing, maintenance, and further development, which are crucial for the success of your MVP.

With typically limited resources at this stage, deciding where to allocate time, money, and human resources is critical. This includes balancing product development, marketing efforts, customer support, and other business functions.

Navigating these uncertainties requires a flexible approach, a willingness to learn and iterate, and a strong focus on your target user's needs and feedback. It's about making informed decisions with the information you have and adjusting as you learn more about your market, your product, and your users.

If you’re unsure how this translates to your upcoming product, get in touch with our team and discuss your specific needs - no strings attached.