How to Build an MVP That Raises Money?
Entrepreneurs often have innovative ideas for products or services but may face financial constraints in developing them. This is where Minimum Viable Products (MVPs) come into play, providing a cost-effective solution. By creating an MVP, businesses can test their concepts with real users and secure funding for further development.
The app market is highly competitive, with a report by Statista indicating that 29% of apps are abandoned after just one use. It is an excellent way to build an MVP to test a business idea without investing significant amounts of money. This blog post will delve into the process of creating an MVP, the advantages it offers investors, and effective strategies for securing funding. So, let’s get started!
What is a Minimum Viable Product?
The Lean Startup methodology introduced the concept of a Minimum Viable Product (MVP) in product development. An MVP is a simplified version of a product that includes only the essential features required to meet the needs of early users and gather feedback.
The purpose of an MVP is to validate the product idea early in the development cycle and reduce risk, save costs, and attract funding.
Benefits of Developing an MVP
Building a Minimum Viable Product (MVP) can provide several benefits for entrepreneurs and product developers. Let’s take a look at some of the main advantages of developing an MVP:
Investor Assessment: The main purpose of an MVP is to test the product’s viability in the marketplace, including whether there is demand for the product and if users are willing to pay for it. By gathering user feedback, the product can be improved before launching it to the wider market. This reduces the risk of failure for startups and increases their chances of success. For investors, an MVP is crucial in evaluating the product’s potential for success and making investment decisions.
Product Functionality: The minimum viable product framework is critical in securing investment funding as it allows investors to see the product’s functionality and how it solves real-world problems. In contrast, products in early development stages can be challenging to sell to investors as they may not see the potential value.
Team Strength: The team behind a new venture is an important aspect for investors. MVP app development can help judge whether the team behind a new venture has the necessary skills and experience to succeed.
Market Awareness: Market analysis is an essential part of MVP software development, helping investors know that the team is aware of the market conditions and can adapt to them. MVPs allow businesses to test their product hypothesis with real customers and gather feedback to refine the product and business model before seeking MVP seed funding from investors.
Product Commitment: MVPs allow businesses to gauge investor interest in the product and get funding to continue developing it. When you build an MVP, it can help strike a balance between your company’s offering and customer needs. It is typically less expensive to build an MVP and less risky than traditional product development, making them appealing to investors.
Overall, building an MVP is an effective way to test a product’s viability and secure funding from investors. Let’s proceed to learn the steps for building an MVP.
How to build an MVP?
If you’re a business owner, you’ve probably searched for MVP in Google and noticed that the search results include suggestions like “MVP is dead” or “MVP is low” in the autocompletion. However, we strongly disagree with these notions.
Market Research: Conduct market research to understand the needs of your target market and what they’re looking for in a product or service. It’s almost impossible to build an MVP that doesn’t already exist in the market. Use platforms that conduct paid surveys to target the right respondents for your MVP.
Target Market: After conducting market research, identify the demographics of your target market and their needs. Answer questions such as who is your target user, what are their needs, and why would they use your solution to determine who your minimum viable product is for and what needs it should address.
Key Features: Outline key features of your product: Once you know your target market and their needs, outline the core MVP features your product or service will offer. Focus on essential features that address the needs of your target market.
Build Launch: After finalizing the features of your MVP, the next step is to develop and launch the product or service to your target market. During the launch, it’s crucial to prioritize creating a positive user experience. This involves ensuring that your product or service is easy to use and navigate.
Additionally, you should promote your MVP and gather feedback from users. The feedback you receive will be essential in determining which features to add or remove and how to improve your product or service.
Analyze Feedback: After launching your MVP, analyze the feedback and data to understand what’s working and what’s not. Use the feedback and data to determine how to improve your product or service, as MVPs will have flaws and areas that need improvement.
To successful build a MVP, it’s crucial to follow all the necessary steps. Having learned how to build an MVP, the next step is to consider securing investments for your app or product.
How Do You Find Investors After You’ve Created an MVP?
Obtaining investment for your mobile app post MVP development can be difficult, but implementing certain techniques can increase your chances of success. Here are some tips for finding investors for your mobile app:
Network Events: Industry events and conferences provide an opportunity to connect with potential investors. Be prepared to pitch your product and answer any questions they may have.
Leverage Network: Reach out to family, friends, and colleagues to see if they know anyone interested in investing. Referrals from trusted sources can attract investors.
Online Platforms: AngelList, Seedrs, and Crowdcube are some online platforms that connect entrepreneurs with investors. Showcase your mobile app and connect with interested investors.
Crowdfunding: Kickstarter and Indiegogo are popular crowdfunding platforms. Raise funds for your mobile app by allowing users to pledge money in exchange for early access or other rewards.
Venture Capital: Venture capital firms provide funding to startups and early-stage companies. Research firms that specialize in mobile app development and pitch your product to them.
To increase your chances of finding investors for your mobile app after developing an MVP, it’s crucial to have a clear and compelling pitch that emphasizes the unique value proposition of your product. Ensure that you focus on the benefits of your app and the potential return on investment for investors. By following these strategies and remaining persistent, you can boost your chances of success.
Developing an MVP is a vital stage in the journey of acquiring funding for your mobile app. By following the tips outlined in this blog, you can increase your chances of developing a successful MVP that resonates with investors and secures the funding you need to take your app to market. It’s worth noting that Uber, Airbnb, and WhatsApp all began as MVPs and are now among the most prosperous companies, so don’t let the initial challenges discourage you from pursuing your dream. Good luck!