Businesses, especially startups, need to move quickly and be willing to experiment and learn from their failures. This requires a willingness to pivot your business model or strategy if necessary, and to make decisions based on data and feedback rather than assumptions.
By adopting an iterative approach, startups can continuously refine and improve their product or service, incorporating customer feedback and responding to changing market conditions. This allows them to stay ahead of the competition and adapt rapidly to new challenges as they arise.
Whilst technical advancements have made it easier for startups to create and launch new products, the key to success lies in achieving product-market fit (PMF) - i.e. the product should not only solve user problems but also generate a sustainable revenue stream. However, in the quest to achieve perfection, some start-ups often make the mistake of over-investing in technical infrastructure and software architecture, which in fact can hinder their ability to achieve product-market fit quickly. In this post, we will discuss the concept of a Minimum Viable Experience (MVE) and why it’s crucial to achieve PMF before optimizing technical infrastructure and software architecture.
What is Minimum Viable Experience (MVE)?
MVE is aimed at creating a product or service that provides the minimum level of experience required to meet the needs of their customers (rather than just a viable product). In other words, the MVE is the simplest version of a product that can be launched in the market to test a core user experience and gather feedback. The MVE approach allows us to validate assumptions, learn from mistakes and make necessary changes before investing significant resources in optimizing their technical infrastructure and codebase.
An MVP (Minimum Viable Product) is a product that has just enough features to be launched in the market and solve a specific problem for a specific set of customers. The goal of an MVP is to test a product concept in the market, validate customer demand, and gather feedback to improve the product. An MVP can be a rough prototype, a beta version, or an early release of a product that is limited in scope and features.
An MVE (Minimum Viable Experience) is an extension of the MVP concept. The MVE approach is focused on creating a minimum viable experience for customers, rather than just a minimum viable product. The idea behind an MVE is to provide customers with a satisfactory user experience, rather than just a functional product. An MVE is a product that meets the basic needs of customers and provides them with an enjoyable (better) user experience.
In other words, an MVP focuses on delivering a product that solves a specific problem, while an MVE focuses on creating an enjoyable user experience along with solving the problem. An MVE takes into account factors such as usability and design, in addition to functional features.
Note that the concept of MVE is rooted in the Lean Startup methodology, which is based on the principles of continuous innovation and learning. The Lean Startup methodology encourages companies to focus on creating a Minimum Viable Product (MVP) that can be launched in the market quickly and at a low cost. However, viewing an MVP from the lens of an MVE strategy can allow us to test the right assumptions. Based on feedback, we can then make necessary changes to the product or service to improve the user experience even further.
Why is it important to achieve product-market fit before optimizing technical infrastructure & codebase?
PMF is the key to the success of any product or service. Achieving PMF is a gradual process that requires a deep understanding of your target users and their needs. It involves identifying the pain-points of your users, creating a product or service that addresses those pain-points, and validating your assumptions through constant user feedback.
When companies over-invest in their technical capabilities and processes (there should be just enough processes to ensure that they can move rapidly_) before achieving PMF, they run the risk of building a product or service that does not meet the needs of their users. This can result in wasted resources, time, and effort. You might even chase “vanity metrics” that do not move the needle such as total users (instead of total active users) Moreover, optimizing technical infrastructure and the codebase before achieving product-market fit can also limit the company’s ability to adapt and make necessary changes to their product or service based on user feedback quickly making it a competitive disadvantage.
Examples of famous tech companies that followed the MVE approach
There are many famous companies have followed the MVE approach to achieve PMF. Let’s take a look at some of these examples.
Dropbox: When the company was founded in 2007, its founder, Drew Houston, created a simple prototype that allowed him to access his files from anywhere. He then shared the prototype with a few early adopters and gathered feedback. Based on this feedback, he made the necessary changes to the product and launched an MVP. In this scenario, the MVE was creating a system that was easy enough for people to access files from everywhere (not a long onboarding process or a subscription management system to sort out user billing).
Airbnb: The founders, Brian Chesky and Joe Gebbia, started by renting out air mattresses in their apartment to make some extra money. They then created a simple website that allowed people to rent out their homes and apartments to travelers. They then launched their MVP in 2008 and tested the concept by renting out their own apartment to three travelers.
Instagram : When the company was founded in 2010, its founders (Kevin Systrom and Mike Krieger) created a simple photo-sharing app that allowed users to share photos with their friends. This allowed Instagram to test the concept and gather feedback from early adopters.
The benefits of the MVE approach
Cost-effective: The MVE approach is a cost-effective way of testing a product or service in the market. Companies can test the concept and gather feedback from early adopters without investing significant resources in optimizing their technical infrastructure & codebase. This approach allows companies to validate their assumptions and learn from their mistakes before investing significant resources in scaling up their infrastructure and optimising their codebase.
Time-efficient: Companies can test the concept and gather feedback from early adopters quickly. This approach allows companies to make the necessary changes to their product or service and iterate quickly based on customer feedback without over-indexing on technological complexity.
Customer-focused: The MVE approach is a customer-focused way of testing a product or service in the market. By launching an MVE based MVP, companies can focus on creating a product or service that meets the needs of their customers.
Minimum Viable Experience (MVE) approach allows companies to validate their assumptions, learn from their mistakes, and make the necessary changes before focusing on technical scaling. Whilst scaling is a key factor for growth, there is no point in focusing on this if your business doesn’t take off, or if you don’t have PMF.
By achieving PMF before optimizing their tech, companies can focus on creating a product or service that meets the needs of their customers and generates a sustainable revenue stream- and could make the business more attractive to potential investors.
It’s also important to note that whilst this is a good rule of thumb, there are companies (such as in pharmaceutical industry or in many regulated segments of the market) where having strong technical infrastructure is the right thing to do from the beginning. However, the good news that vast majority of start-ups do not fall into this category.
MVE is a cost-effective, time-efficient, and customer-focused way of testing a product or service in the market. Companies that follow the MVE approach can increase their chances of success by creating a product or service that meets the needs of their customers first, before scaling tech.