The Secrets to Securing Funding with your MVP
The acronym MVP is thrown around the startup world without much idea for what it means. Yes, Minimum Viable Product is what it stands for, but what does that entail? Most would claim its a lite version of your app which validates that you have potential customers and allows you to test your initial ideas. They would be right – but an MVP has the potential to be so much more. In our minds, we think it is best to create the “Most Functional MVP”. This means using the small amount of resources you have to create the MVP in the absolute most efficient way possible. In our opinion, not doing this is simply a waste of time and resources in the long run.
In our experience working with Startups, the creation of an MVP is vital, but it can often be done in a way that achieves only a fraction of what was possible for it to achieve. An MVP can be a range of things, from a super-cheap version of your app that is simply wireframes linked together, to a fully functional app with only core features, Our first step when opening up a dialogue between a startup looking to have their MVP built and ourselves is to find out what they want to achieve with their MVP through our Discovery Phase. We often tell them to set goals in 4 target areas: Learning, Validation, Testing, and Funding.
Learning is the most important part of the MVP for the founding team. First time founders often don’t know what it takes to start a software company. It’s hard work. The MVP is a tool they can use to learn what they are in for down the line. Content inventories, long nights, early mornings, adapting and reiterating the same design multiple times until it is perfect, and multiple weekly meetings are all on the cards when getting your company off the ground. It’s a lifestyle that some may find unsustainable, and to think it gets easier later on is simply incorrect. Use the time developing the MVP as a time for your team to find their strengths and weaknesses in the process. Then, rearrange your team in such a way that each person is where they fit best. Getting this right early is often the difference between failure and success, plus, for first-time founders, knowing the things you will learn from implementing the Most Functional MVP strategy will make VC firms think twice before dismissing your team for being inexperienced. Your goal in this area might not be a measurable metric but rather an intangible assurance that your team is aligned and formed in a way that is most beneficial to the company. Sometimes, although unfortunate, this can mean cutting a team member because it becomes evident they aren’t pulling their weight nor are essential to the creation of the product.
Validation is next on the list. Obviously, validating you have customers for your product is the main point of creating the MVP in the first place. Take it further than this though. Are you getting installs? Great! Where are they from? Which channel is giving you the most traffic: Facebook ads or in person marketing? Where aren’t you getting much traffic from? What are the differences in user base between the places you are getting traffic and where you aren’t getting traffic? This information can lead you to pivot, even if you are doing well, in such a way that you gather even more users. Perhaps you are marketing to 17-25 year old males, but all your traffic is coming through Facebook. Yes, some of those users are your target demographic, but a solid percentage are males 25-35. If you can analyze this information to capture more of that 25-35 market, you have validated your product more efficiently than if you had just accepted the fact you were doing well with Facebook ads. To set a goal for the Validation aspect of your MVP, set a number of users to sign-up, install, or use and enjoy your product, and then go out and hit this number. Don’t forget to add in measurements of how long these users keep your product or how many come back and use it again as these metrics are just as in important as new installs. Also, never forget to analyze every piece of user feedback you receive.
Testing is the next important aspect of your MVP. A/B testing is essential, so make sure you have multiple designs ready for your MVP once it starts. The differences in design can be minimal, and thus will probably be cheap, but always ensure you have them . This goes for both UX and UI . Your branding and company image aren’t to be worried about too much in the MVP stage, so make use of the last time you can mess up and not have to pay too much for it. To set your goals for the testing stage, make sure you have a set percentage difference of users signing up or clicking on ads of one design over another before you think that one is the right way to go.
Finally: funding. This is the main goal of creating an MVP. If you have gone through the MVP stage successfully you will be set up perfectly for acquiring funding from a VC firm. Traction, proof of concept, and a great team are all things that make venture capitalists want to invest. Focus on the perfecting the previous three steps and this step will be easy to accomplish by the time you head into VC offices with your pitch deck.