Lean Startup: the importance of risks when building an MVP (Minimum Viable Product)

I have been watching small entrepreneurs present their experiences launching MVPs and I have noticed that they do not emphasize the risks an MVP can pose to the startup company.

The concept of the MVP (Minimum Viable Product), developed by Eric Ries in his book "The Lean Startup", is one of the great contributions to the world of startups and, why not say it, to the market in general. The MVP is a way of expressing one or more ideas to potential customers while spending the minimum effort needed to launch a product, so that we can collect information about users' experiences, learn from them, and then make a decision.

The expression “minimum effort needed” means spending the least amount of time and of technical and financial resources on building a solution, because there is no certainty that users will accept it. In other words, since the chance of launching something wrong the first time is very high, the goal is to spend only the minimum necessary so that you can learn from mistakes, thereby reducing risk and waste.

An MVP is not necessarily just a prototype containing the main feature of a large product. It can be, for example, just a video, a single web page, a mobile game with basic features, etc., whose purpose is to answer technical or design questions as well as to test the fundamental hypotheses of the business.

The MVP concept is extremely useful for launching a new product. However, there are several risks related to building one that, according to Ries, must be considered. The most important of them are:

• Legal issues: depending on the country or jurisdiction, after launching an MVP, the company may be required to file a patent for the product shortly afterward. Patents are a way to keep competitors at bay, but they can often inhibit companies' innovation, since the product idea becomes available to the public, enabling innovations by competitors.
• Building more than necessary: entrepreneurs imagine that customers may find the MVP an imperfect product because it has few features, and so they end up doing more than necessary, sometimes bringing their process close to the waterfall development model.
• Fear of competitors: there is a risk of having an idea appropriated by competitors while still in its early stages. This is perhaps the most common objection among entrepreneurs. However, according to Ries, it is not that easy to have an idea stolen. He challenges entrepreneurs to call or e-mail a manager at a large company and tell them their idea. The truth is that managers are full of great ideas and very busy in their day-to-day work prioritizing which one will be carried out first, and they will hardly have time to listen to the entrepreneur and their new idea.
• Brand risk: another fear of startup entrepreneurs, and also of companies already established in the market, is launching an MVP and damaging the brand image because of, for example, the MVP's limited features. For this, Ries suggests something very common, which is to launch the product under a different brand.

It is worth remembering that not just one but several MVPs may be needed until the company reaches the ideal product for the customer. Thus, not only these but many other obstacles will very likely arise while building an MVP.

Another risk is not correctly establishing the indicators you want to measure with the product launch. If this is not properly defined at the outset, the measurement will be flawed and, consequently, so will the learning, harming the building process.

During the build cycle, which involves the build, measure, and learn phases, the entrepreneur builds a product, takes measurements that generate data, learns from them, and generates new ideas to build a better product, and so on. During this cycle, completely different ideas may emerge, radically changing the type of product to be launched on the market.

Understanding the concept and the risks involved in an MVP well is a key factor for its success. Compared with manufacturing, it is as if the MVP were a single batch with a small number of ideas, which will be adjusted as learning progresses from the feedback of real customers (those who are genuinely interested in using the product).

Launching an MVP is the initial phase of a long learning process and will very likely go through many obstacles and risks that must be explicitly observed, and overcoming them should be a fundamental source of learning throughout the entire product-building process.