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Clearing Up Misconceptions About Minimum Viable Product

By June 27, 2016Article

Walk into any Palo Alto coffee shop these days and you’re likely to hear people talking about their “MVPs.” But they’re not referring to Buster Posey or Madison Bumgarner, most valuable players from the San Francisco Giants. Instead, they’re talking software. When Eric Ries published “The Lean Startup” in 2011, he popularized the term “Minimum Viable Product,” and now everyone in Silicon Valley wants an MVP. 

But not everyone is sure what it is, exactly. Some think it’s a design mock-up, some think it’s some sort of engineering proof of concept, some think its main purpose is as a demo used during a funding pitch (or just to impress your mom). 

Well, let me tell you three things that an MVP is not. 

1. It’s not something you show; it’s something you learn from. 

The purpose of an MVP is to have a trial solution that can go to market and from which you can gain insights that will inform the building of a more refined product. In the words of Eric Ries, “The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers.” A core tenet of Eric’s lean startup methodology is that entrepreneurs should be thinking about the smallest possible experiment that will provide the greatest possible learning. That’s what an MVP is: it’s an experiment (the “minimum viable” experiment) designed to provide the greatest possible learning. 

2. It won’t get you funded. 

In those same coffee shop conversations, you’ll probably hear someone say, “As soon as our MVP is complete, we’ll show it to VCs and raise lots of money!” This is backwards thinking because it implies that the purpose of an MVP is to show something, when what you actually should be doing is using it to learn from the marketplace. Showing that you can build a prototype isn’t going to impress investors. What will impress investors, however, is that you’ve taken the time to discover key insights about real-world customers’ wants and needs. That’s the purpose of an MVP. 

3. It’s not even a thing. It’s a process. 

If you embrace the MVP concept you are actually embracing an iterative process of idea generation, data collection, analysis and learning. It’s about optimizing your path to product/market fit.  You could spend two years building a full product and then find out no one wants it. So then you could make a bunch of changes and a year later ship a new version. Getting an MVP into the hands of customers early is much more efficient. As Marc Andreesen wrote in his seminal Stanford post, if you do this right “the market actually pulls the product out of the startup.” 

Want examples?

The Twitter folks thought they were working on a group-SMS platform. At the 2007 SXSW festival, they put up a sign telling people to text a message to a certain number in order to automatically get updates from SXSW speakers and performers. By the end of the festival they were processing 60,000 messages a day. From that “MVP” they learned that the world wanted a real-time mass media platform. 

The Uber founders launched a service for filling unused capacity in a few black town cars in one city. What they learned from that “MVP” informed the growth of a global transportation platform for many types of cars. 

WD-40 began as a water displacement formula to keep airplane parts from rusting. The first 39 MVPs failed. Finally, Water Displacement Formula #40 worked at keeping airplane parts from rusting. Today it’s a $400 million/year consumer product. That’s not what they thought they were developing. 

There are many other examples throughout history, of course. The point is that an MVP is something you build in order to learn about the market. As Steve Blank famously said, “No business plan survives first contact with actual customers.” But building minimum viable products provides a way for entrepreneurs to learn what the market wants. Then you can create a plan for scaling that up.

Bret Waters is the CEO of Tivix and a regular lecturer on business strategy at Stanford University. He has spent his entire career in Silicon Valley, helping to drive digital innovation in various roles as an entrepreneur, investor, and academic. Contact him at and follow him on Twitter and LinkedIn.  











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