The journey of a successful entrepreneur begins often with a simple idea. An idea should be simple, but it should solve a complex problem. The difference between success and failure is execution (and funds :P). Ideas are cheap. An idea is worth a million dollars only if it gets built.
The necessity for capital has killed a lot of businesses, and successful funding has gifted this world myriads of great ideas. But, is it tough to access capital when you have a good idea, good team, and a clear vision. The answer is no. All you need, in order to raise a capital, is a great MVP that showcases your vision to investors. And, TADA, you get your funding and the opportunity to build your idea.
But, how do you build a MVP that captures the hearts and minds of investors? What are the steps to present and raise pre-seed funding for your idea with an MVP? The first step, obviously, is to create an MVP. The next would be presenting it to the right people. The following blog would give you a brief idea on how to do both.
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What is an MVP?
Minimum Viable product (MVP) is a, say, skeleton version of your product which hosts only the primary features. MVP helps the companies to determine whether the product is worth further development. It is mainly targeted at collecting user feedback. Using that feedback, we can check the viability of the product in the marketplace. MVPs can highlight any potential issue which could crash down our profits in the future. Complete feature set of the product would be mapped and built only based on the success of the MVPs and user feedback on more relevant features.
Product developers quickly discover which features are preferred and which are not through initial customer contact. This provides necessary information regarding how the product should be roadmapped for development. Through cycles of feedback and development, the product is constantly updated. The product is further improved by the developers after analyzing this feedback. Customers provide feedback once more, and the cycle continues. But, everything great begins with an MVP.
Steps to Build a Successful MVP
Many startups, when they fail to attract users/ investors they call it a failed MVP. The actual problem is a failure to follow the right processes involved in creating an MVP. To successfully create an MVP, all of the following steps must be followed:
- Idea Validation: Your first priority should always be to validate your ideas. How can you implement your ideas to benefit users? How will it be profitable for you as well as your clients? What else could they possibly expect from us? Make certain that the users truly require what your end product is offering. Only and only if there is demand, then can there be supply.
- Market Research: Ideas occasionally don't match the demands of the market. Prior to starting an MVP Development process, a business should make sure that the idea will meet the needs of the target users. Conducting surveys would be beneficial for any business. A company's chances of success are higher when it has more data. Don't forget to keep an eye on what your competitors are offering and how you can make your product idea stand out. If your idea is one of a kind, get user opinions before investing heavily into your product.
- MVP Features: At this stage, by analyzing the surveys and results from market research, we have to prioritize our MVP features. Focus mainly on the needs of your target audience. Sort the remaining MVP features into three priority categories: High, Medium, and Low. The placement of these features in the product backlog is a further crucial step (priority-wise). It's time to start working on an MVP. An MVP prototype can be made by an expert UI/UX or Mobile App Development Company to get a glimpse of the look and feel of your product.
- Feedback Phase: Perform a thorough test once the MVP is complete. You should start by allowing individuals who fit your buyer persona to test your product. After business has decided on the features, the MVP can be launched. In order to obtain more user feedback, it is also essential to promote the MVP.
- Development Phase: Work on creating the MVP in accordance with user feedback after receiving it. A mature product can be created by continuously improving your MVP, learning from your mistakes, and applying what you've learned. Up until you have the ideal MVP, this process will primarily consist of a continuous cycle of analysis and development.
Why do we need an MVP?
An MVP enables you to collect preliminary data that validates users' interest in your product. The full version can be developed after the MVP, which would increase the odds of the success of your product. With the help of MVP, you can:
- Invest your time and money in a project that will be successful.
- Examine whether your customers are satisfied with your product.
- Determine which trends you can use to your advantage when developing the full version of the product.
- Attracting investors as quickly as you can.
Saving money and time on your final product
How to Investors for Your App?
Some investors use a set of criteria to select the startups for their investment portfolio. Try to comprehend what they are seeking and demonstrate that you can provide it. Prepare to go into great detail about your PR/marketing strategy, the market you are aiming for, the competition, the financials, as well as some more personal topics like your motivation and qualifications. Furthermore, it's critical to have a detailed plan for how you intend to use the requested funds. This will reassure investors that you will be able to successfully launch and expand your business. You'll be in a better position to obtain MVP funding if you are open and truthful about the risks involved.
And the most important thing is vision. What’s your product going to do to the market in the next five to ten years? What is your vision for the product? Be clear and specific on how you are planning to disrupt the market and be truthful about it.
Other ways to fund your MVP
- Bank Loan: Obtaining a loan can be an efficient way to get your business off the ground. This may appear to be a risky and costly approach in the short term, but if your company takes off, it can save you a lot of money and equity.
- Crowdfunding: It is a way of raising funds from a large number of people instead of a few selected investors. When an MVP can pique the interest and excitement of potential investors with a compelling story and a compelling pitch deck, it can be a good source of funding.
- Venture Capitalists: High-net-worth individuals frequently invest in early-stage companies as venture capitalists in exchange for equity. Despite the fact that they frequently concentrate on high-growth businesses, they can also serve as a source of funding for a minimum viable product with great potential.
- Family/Friends: If your family and friends believe in your business, they also could be a source of funding. It is important to treat them as an investor, even though they are family so that you will be accountable.
For startups looking to secure funding and attract investment, MVP is a crucial and game-changing stepping stone. Startups can increase their likelihood of attracting investment and obtaining funding to expand their business by demonstrating market validation, utilizing data and analytics, and overcoming typical obstacles. Understanding the role of an MVP in securing funding is crucial in today's cutthroat business environment, regardless of whether you are a startup founder, investor, or entrepreneur. Startups can create a compelling and effective MVP to support them in achieving their objectives and scaling new heights with the right preparation, research, and innovation.
If you are startup owner/ ideator, who would like to collaborate with a technology team to create your MVP, reach out to Absolute App Labs – One of the best Mobile app development companies in Chennai.