MVP – how to test your business idea without building the product

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MVP – how to test your
business idea without building
the product
Guide for startups an entrepreneurs

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What is MVP?
The minimum viable product is that version of a
new product which allows a team to collect the
maximum amount of validated learning about
customers with the least effort
(Eric Ries)

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Characteristics of MVP
Has to be much cheaper than the end-product
You can do it much faster than the end-product
It consists of ONLY the most important features
(from the perspective of customers)
You can easily modify it as you get feedback from
customers
Enables you to test most of the hypothesis
comprising your business model (especially the risky
ones)

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You can gamble and open at once the restaurant of your
dreams yet it will be prohibitively expensive and
painstakingly long…….
Cost: 80-1000 K
Lead time: 3-12 months

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… or you can try the Food Truck as the MVP….
Cost : 10-100 K
 You test the
whole concept
 You can test
many locations
 You can test
menu
 You create brand
awareness and
future demand
 Pricing can also
be tested

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… the role of Mr. Sandwich who goes from one office to
another and sells sandwiches enables you to test many
aspects as well
Cost : 1-2 K
Lead time: 1 months
 You can test
many locations
 You can test
menu
awareness and
future demand
be tested (for
limited range of
products)

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… another great MVP is catering – especially if your
menu is wider and more diversified
Cost: 2-10 K
 You can test
many locations
 You can test
menu
awareness and
future demand
be tested

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If you dislike the fuss of going around you can have
as MVP dinners at your place – first for friends and
after some time the acquaintances
Cost: 1-4 K
 You can test
menu
awareness and
future demand
be tested (with
some small
tricks)

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…. Or if you want to test also the look and fell of the
restaurant just rent an apartment near the targeted
location and with small changes create mini restaurants
Cost: 5-10 K
 You can test the
whole concept
 Only 1 location can
be tested
 You can test menu
awareness and
future demand
 Pricing can also be
tested

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….when you wonder what MVP you should choose compare
them in terms of time and money needed and also….
540
55
2 6 3 8
Restaurant Food Truck Mr. Sandwich Catering Diner at your
place
Rented
apartment
Average investment needed
In thousands of USD
8
2
1
2 2 2
Restaurant Food Truck Mr. Sandwich Catering Diner at your
place
Rented
apartment
Average time needed to create Product/MVP
In months

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….and also have a look what and to what extent you can test
with specific MVP – concentrate on those features which are
the most risky
 Restaurant
 Food Truck
 Mr. Sandwich
 Catering
 Diner at your
place
 Rented apartment
Concept Location Menu Brand awarenessPricing Look and feel

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Case#2
Webpage earning
from ads

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Many of you dream of having their own webpage with
thousands of users and earning from ads…..
Cost: 10-300 K

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….before you jump into full blown coding start with
something very basic as an MVP i.e. file in Google Sheet
Cost: 1 K
Lead time: 1 day
concept (the core of
it)
 You create future
customers
 You test what
information should
be there and what
should be the
interface
 Very good for niche
markets and B2B

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..or a page based on facebook, pinterest or instagram………
Cost: 1 K
Lead time: 1 day
 You test important part of the
concept
 You create a source of future
traffic
 You test the copy, visual side
of the content and the site,
 You can measure and test
engagement
 If you do it on one platform
repeat it on others
(instagram,pinterest google+,
twitter and others)
 Very good method for
entertainment sites

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155
1 1
Webpage / Site File on Google Sheet Fanpage on facebooku
In thousands of USD
8
0 0
Webpage / Site File on Google Sheet Fanpage on facebooku
In months

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 Webpage / Site
 File on Google
Sheet
 Fanpage on
facebooku
Concept
Methods and
cost of
customer
acquisition
Range of
information /
content
Interface
required by
customers and
engagement
Copy, visual look
of the site
the most risky

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Many of you probably are fond of retail and would like
to open their own on-line shop…..
Cost: 10-300 K

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….we propose to start as an MVP from sales on Amazon /
Ebay / Alibaba / Allegro (PL) or other general marketplaces
Cost: 1 K
Lead time: 1 day
 You can test the product
range you want to sell
 You can test the demand
for your products
 You can see what will be
complementary sales,
cross-selling and in some
case up-selling
 You create source of
traffic for yourself
 The best solution to test
competitive pricing

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..you can try also number of dedicated to specific category
marketplaces (if it exists)
Cost: 1 K
Lead time: 1 month
range you want to sell
 You can test the demand for
your products
 You can see what will be
complementary sales, cross-
selling and in some case up-
selling
 You create source of traffic
for yourself
 The best solution to test
competitive pricing
 You can test your brand an
design against other
competitors

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…worst case scenario is resorting to basic landing page- in
this case you do not have to even build the product 
Cost: 1 K
Lead time: 1 day
interest in your
design and brand
 You gather email list
 You can test initially
pricing level
 You can also test the
copy, visuals, logo
etc.

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…..or using software which enables you to sell on your
web page without creating real on-line shop (i.e.
GumRoad)
Cost: 1 K
Lead time: 1 day
 You test the demand
level
 You can test pricing
level for items
 You can test some
copy, call-to-actions,
conversion etc.

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155
1 1 1 1
On-line shop General
marketplace
Dedicated
marketplaces
Landing page GumRoad
In thousands of USD
8
1 1
0 0
On-line shop General
marketplace
Dedicated
marketplaces
Landing page GumRoad
In months

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 On-line shop
 General
Marketplace
 Dedicated
marketplace
 Landing page
 GumRoad
Product
Range
Demand
size
Cross-sell, up-sell,
complementary sell Traffic SourcePricing
Brand and
design in
comparison
with
competition
the most risky

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building startups
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your startup?
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$20

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Software as a Service (SaaS) it is a difficult business…
Cost: 10-300 K

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…the most effective MVP in this case is start with
consulting projects for your target group (SaaS target
group
Cost: 2-10 K
Lead time: 1 month
 While consulting you
create the product
(procedures,
workflow) with the
customer
demand and map the
whole decision making
process
 You test cross-sell and
sell of complimentary
products
plans
 You can get first
references

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… you may as well connect a few SaaS to achieve the
intended result
Costs: 2-10 K
Lead time: 1 months
 You can test
demand
 You check what
kind of support is
needed

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…another great option is to start with a blog devoted to specific topic.
At the beginning to check whether it makes sense to create your own
product you can try and to monetize products of your potential
competitors to check how well the business converts
Costs: 2-10 K
 You can test
demand
 You test what
should the product
really do for thee
customers
customer
acquisition
methods

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…when in really hurry you can try testing some aspects
with immortal landing pages
Cost: 2-10 K
Lead time: 1 month
 You can test
potential demand
 You gather contact
details from
prospective
customers
 You test the cost of
acquiring SaaS
customers
visual look, the copy
and call-to-action
 You can test some of
the functionalities

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1 005
6 6 6 6
SaaS Consulting Aggregation of 3rd
party SaaS
Blog showing how
to solve problems
using SaaS
Landing page
15
1 1
8
1
SaaS Consulting Aggregation of 3rd
party SaaS
Blog showing how
to solve problems
using SaaS
Landing page
In thousands of USD
In months

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 SaaS
 Consulting
 Aggregation of 3rd party
SaaS
 Blog
 Landing page
the most risky
Creating, testing the
product and checking
functionalities
Creating
demand Pricing
Methods and
cost of acquiring
customers
complementary sell

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Case#5
Off – line /
physical store

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Some of you probably are in love with off-line stores
i.e. the tasty chocolate stores
Cost: 100-1 000 K

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…in this case your MVP can be a on-line store (or the MVP
of on-line store mentioned earlier)
Cost: 2-10 K
 You can test the product and the
range you should have
 You can test cross-selling and
selling of complementary goods
 You can create brand awareness
– later to be used in the off-line
store

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….another good example for MVP of the physical store is to rent some
space in shopping mall and put small temporary mini-shop. In this case at
least you will not have to worry about the traffic
Cost: 10-30 K
 You can test the product and the
range you should have
 You can test cross-selling and
selling of complementary goods
 You can create brand awareness
– later to be used in the off-line
store

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550
6 20
Off-line store On-line store Mini-shop in the shopping mall
In thousands of USD
9
2
4
Off-line store On-line store Mini-shop in the shopping mall
In months

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 Off-line store
 On-line store
 Mini-shop in the
shopping mall
Product
Testing and
creating
demand
complementary sell Pricing Brand awarenessLocation
the most risky

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Writing a book it is not easy task. It takes some time and
resources to be produced
Cost: 10-100 K

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… that is why you can start by writing articles or novel in
installments as your MVP
Cost: 1-10 K
product (does the
content resonate with
your targeted
audience?)
 Test the demand
 Create your own brand
 Create fans / followers
/ readers

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…or use more modern method – start a blog as an MVP and a
selling platform at the same time. Good example is Ash Maurya
and the way he wrote his book
Cost: 1-10 K
(does the content resonate
with your targeted audience?)
 Test the demand
 Create your own brand
 Create fans / followers /
readers
 You can try cross-sell
 You can gather contact details
to your potential customers
(at least early adopters)

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55
6 6
Book Newspaper Blog
In thousands of USD
21
5 4
Book Newspaper Blog
In months

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 Book
 Newspaper
 Blog
Product
Creation and
testing of
demand
complementary sell Pricing Brand awarenessEmail List
the most risky

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Marketplace is one of the most difficult on-line business models. That
is why it is worth looking for MVP that will enable you to test fast
whether your idea makes sense
Costs : 1 – 10 M

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MVP of a marketplace can be a…..smaller marketplace of 1
product
 Lower costs
 You faster reach
the required by
customer depth
 Easier and
cheaper to get
suppliers and end-
customers
 Easier to define
and control the
quality
Costs: 50-400 K
Lead time: 6-24 month

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A good of MVP for marketplace is a simple on-line store / e-commerce
done from standard solution. Here you can mainly test the end-
customers without the need to get it right with customers
 You can test whether the
niche you want to enter is
of the right size and nature
for the product without the
need to build the suppliers
network
 You can create the quality
standards that later you will
impose on others
 You create brand in the
niche
 You can test sales
techniques (to the end-
customers)
 You get first customers
Costs: 10-300 K

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MVP can be also a physical market, fair, event or sale
 You can check the
reaction of
customers to the
product and how
do they make
their decisions
 You can get first
customers
 You can find there
first suppliers
Costs: 10-200 K

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Sometimes you can start the marketplace by building a discussion
group, forum or ranking. In this way you will test the demand,
understand the customer and create a strong sales channel
 You check the demand
 You get first customers
Costs: 10-30 K

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As an MVP to the marketplace you can also use any MVP
shown for on-line store
Sales at other marketplace
(more general)
Landing page Tool that enables you sales from your
webpag i.e Gumroad
Sales at other dedicated
marketplace

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….or off-line store
Physical off-line store Island in the shopping mall

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5 500
225 155 105 20
Marketplace Marketplace of 1
product
E-commerce Off-line events /
sale
UGC
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15
8
4 4
Marketplace Marketplace of 1
product
E-commerce Off-line events /
sale
UGC
In thousands of USD
In months

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….and you have to decide what you really want to test
with MVP. We recommend taking care first of the most
risky elements of the business
 Marketplace
 Marketplace of 1
product
 E-commerce
 Off-line events
/sale
 UGC
Product
Creating and
testing demand
Complementary
sales Pricing Brand awarenessMailing bases

60
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61
Summary
Surprisingly MVP is neither magic nor very difficult
MVP enables you to test quite a lot, especially the
most risky elements
MVP is drastically cheaper and faster to make than
the end-product
Do not ditch MVP after you get the end-product –
it can come handy for testing new products or
modification
MVP sometimes has additional benefits which not
always your target product or platform has
Make MVP not war 

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