Minimum Viable Product Life Cycle
The stages of the Minimum Viable Product Life Cycle
In the process of developing a new product There are four phases to the Minimum Viable Product Life Cycle, which are:
It’s certainly an issue for established businesses, However, for new businesses, there are a few more:
- The Idea
- Market Validation
- Creating a Minimum Viable Product (MVP)
- Gaining market feedback
- Modifications to the product or service
In the same way, there’s much to be done prior to introducing the product/service to a wider market. Let’s take a look at each of the phases and find out the implications for you and your company.
data-contrast=”auto”>Where ideas originate from and how to find them has been described in the article ‘How to come up with a business idea’ and is obviously the first step for a startup’s new product or service.
The entry of your service or product to the market has to be verified by conducting market tests. Also, you must finalize the market you want to target, your pricing model, and your entry strategy.
- Have you conducted tests to verify the efficacy of the product and the market?
- Are you aware of your ideal market and formulated your entry strategy to market?
- Have you got a solid pricing strategy/model that’s in place?
- Are you aware of the distribution channels necessary for market entry?
- Are you able to identify the influencers within the market that can help you in your market entry?
Creating a Minimum Viable Product (MVP)
The Minimum Viable Product or MVP is a method of development where a product is launched to a market that is limited with the simplest features, but enough to attract the attention of customers.
It is your MVP, which is the simplest variant of the service that the business plans to introduce into the market to see how it is received by prospective buyers or customers.
The MVP concept lets you discern where your product is weak and what its strengths and weak points are.
Gaining market feedback
Engaging with customers and customers who have used your MVP is crucial since you’ll gain crucial insight into what has to be changed for an effective full-featured launch of your product.
Modification of the product service
The MVP process could require a second round of testing before the final design can meet the needs and expectations of everyone.
The Beginning Phase of the Minimum Viable Product Life Cycle
The introduction phase of the life cycle of a product can be costly when launching a brand new product, as its market could be tiny and sales are not high.
The costs for research and development as well as testing with consumers as well as marketing and advertising for the launch of the product may be expensive, and the beginning revenues to cover the costs.
The growth stage is defined by a significant increase in profits and sales, and as the company will begin to benefit from economies of production at a larger scale, the margins for profit, as well as the total quantity of profits, will grow.
Higher profits and increased revenue allow businesses to expand their product in new countries and regions; thus allowing them to spend more money on promotions and maximize the potential for sales.
The product has been established and the goal for the company is to hold onto its market share. If the product was unique to be made or features distinctive features, you might notice that rivals are getting up and are introducing new products.
You could think about modifying the product and adding additional features to maintain an edge. At this point, price competition can become a problem because competitors offer lower-cost alternatives.
Everything that goes up must fall. If the life cycle of the Product decreases, what do you do now?
In the case of many items and not necessarily all, the market could shrink and demand decrease which is called the decline stage.
The decrease could be because the market is becoming over-saturated (i.e. every customer who is likely to purchase the product has already bought it) or perhaps because customers are switching to a different or new kind of product.
In the meantime, or prior to this, thought must be given to cost-savings in the production of the delivery or manufacturing process.
To accomplish this, it’s best to adopt what is referred to as the LEAN (please elaborate on the term.) approach in which every step of the process is continuously reexamined to identify opportunities for improvement.
Why The Minimum Viable Product Life Cycle Stages Are Essential For Growth?
If there’s a common thread that runs through a startup making preparations for its debut launch, and a larger company that is releasing the latest update to its product It’s that they have a product that they are working to sell and market.
Every product undergoes various changes throughout its lifespan. Understanding the nature of those changes and the times they might occur can aid in predicting the impact they could have on your business. The absence of a forecasting process for how the life of a product will unfold could be the difference between companies which succeed and those that fail.
The four major stages that every product must go through are Introduction Growth, Maturity, and Declination (anchor hyperlink). However, before a product is introduced, it needs to be designed and developed, so let’s begin there.
Stage 0 -Development: Minimum Viable Product (MVP)
If you’ve got an idea that you’d like to make available to the marketplace. Before you begin developing your product, make sure you’ve done your market research. It is essential to understand the audience you’ll sell to both from the inside out. What needs do you address? Who are your main opponents going to be? What will you do to distinguish yourself in the eyes of your customers?
It is crucial to address these issues as putting effort and time into the development of a product that does not have a real chance of success is a major cost. The goal of the phase of development should be to create a minimally viable product (MVP). This means that your product is able to meet the needs of the customers you are planning to introduce it to, and also to get feedback from customers who have already purchased the product.
Stage 1 — Introduction: Realizing Product-Market Fit
After you’ve created an initial product that is viable that you can sell, you must be in a position to bring it to the market. This means that you must be ready to introduce a product which you might not think is prepared.
Reid Hoffman, the creator of LinkedIn LinkedIn, once stated, “If you’re not embarrassed by the first version of your product, then you launched too late.” This is because it’s better to start introducing a product early and take lessons from it than to sit around until it’s flawless and anticipate immediate results. By doing this, you can achieve your goal in the introduction phase which is to establish the right product-market suitability. This episode of the Masters of Scale episode entitled “Handcrafted” with Reid Hoffman is a perfect example of this.
In the clip, Brian Chesky of Airbnb speaks about a discussion that he had with Paul Graham, Co-Founder of the Y-Combinator an incubator for start-ups that nurtures and invests in early-stage businesses. Paul suggested Brian visit every one of Airbnb’s customers when they were small enough to be able to do this. In this way, they could become acquainted with the people they serve, learn from them and create an application specifically for their needs. It is evident that this is not a method that can grow. Costs will be very expensive and sales lower. But, this did help set Airbnb up for success once it entered the growth phase.
Learn to navigate the entire lifecycle of your product. Our comprehensive guide for Product Marketing is designed to guide you through the entire process from MVP through go-to-market to the right product-market fit.
Stage 2 — Growth: Achieving Economies of Scale
In the majority of companies, the growth phase is the point at which the market-readiness of their product is fully achieved and they are creating the demand for their item. Time and the amount of money that is devoted to the development of the product are greatly diminished and the focus is now on crossing the line and reaching economics of scale. This happens the case when companies are granted series B and C funds which are utilized to fund sales and marketing in order to make their products available to a wider audience.
Airbnb took time with its customers during the initial phase to find out what they liked and what they felt would be better. With this knowledge, they designed a wonderful user experience that their current and future customers would enjoy.
Their loyal customers and evangelicals allowed Airbnb to raise awareness and drive demand. This helped Airbnb to enter the market and enjoy rapid growth.
Stage 3 — Maturity: Brand Differentiation
At this point it is typical to see costs decrease as businesses achieve economies of scale, however, it doesn’t mean expansion isn’t any more straightforward. Every business that has reached this stage has demonstrated that they’ve created a profitable product. For any product that is successful, it will have multiple attempts to replicate it. The increased competition pushes price reductions, which decreases profits.
In order to mitigate the negative consequences of this phase and stay out of decline one of the most important actions you can take is to distinguish your brand. Salesforce’s Chief Executive Officer Marc Benioff has stated that your brand is the most valuable asset. Competitors can replicate the attributes of your product, but they can’t duplicate the way customers identify with your brand and persona. This differentiates your brand and keeps competitors from taking customers.
Stage 4 — Decline
As the market becomes saturated and begins to take hold, the products begin to decline. At this point, profit is much more of a logistics problem because companies want to cut production costs and lower prices in markets. Unfortunately, this phase is not a choice for every product, but it is not the case for every firm.
What I mean by that is that each product at its present state is going to mature, grow and fall, however, companies can upgrade their current products, add new features or launch completely new products to prevent succumbing to the same problems that plague their products that are declining. This will help to revive the product’s life cycle as well as ensure the business continues to exist.
Why Planning is the Minimum Viable Product Life Cycle of a product crucial?
Planning and understanding the life cycle of a product is a crucial process that a business must traverse. It helps ensure the success of a particular product and establishes the foundation for growth and expansion. Repeating the process of your products and restarting the lifecycle of your product will ensure the health of your business overall and ensure the continued success of your business over the course of a long time.