MVP is an acronym for Minimum Viable Product. Eric Ries first introduced the concept of MVP in his bestseller "The Lean Startup". Eric Ries defines MVP as that version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort.
A Minimum Viable Product has enough features to attract visionary users and early adopters of a product. By such adoptions, startups, businesses validate their hypothesis early in the product development life cycle, thus learning whether to persevere or pivot or stop, saving time and money.
Necessary to 'Fail fast, succeed faster'
'Fail fast, succeed faster' is a school of thought from lean thinking books that advocate extensive testing and incremental delivery to determine whether an idea has value.
'Fail fast, succeed faster' philosophy works perfectly for startups and established businesses. Interestingly, the core objective of fail fast remains consistent across the spectrum: reduce financial risk and avoid sunk cost fallacy.
'Fail fast, succeed faster' is to run as many experiments as a business can. The objective is to collect as much data possible that will validate your business assumptions and find the best version for the product.
Assumptions, Hypothesis and Risk Management
The lean thinking asserts that an idea in its untested form is "absolutely uncertain", meaning: a business is "absolutely uncertain" if the idea has merit. Lean thinking suggests that the business approach this uncertainty by identifying assumptions.
If there are a lot of assumptions, then the riskiest one's are determined to focus. Identifying the most dangerous assumption is quite simple: it is THAT assumption, if proved untrue, the product would fail.
Assumptions are listed based on the risk, with high risk at the top and low risk at the bottom. And then, each assumption is measured for the degree of difficulty. The degree of difficulty is a measure of effort needed to ascertain the assumptions made. The high-risk, low-difficulty assumptions are addressed first, followed by high-risk, high-difficulty and low-risk and low-difficulty.
For the assumptions which are risk-assessed, hypotheses are created. A hypothesis is a single, written, testable statement of what the business believes to be true regarding the assumptions identified.
Learning Cycle for validation
In a validation-based approach, a product idea goes through several testing stages. At each step, new points of validations get added up, and the cycle of validation never stops.
The idea gets built with minimum effort, such a build is measured for metrics/Key Performance Indicators, and new lessons are learnt, such validated learnings are incorporated and tested again.
Minimum Criteria for Success
Minimum Criteria for success (MCS) is the living artefact. Minimum Criteria of success is used to measure the results of an MVP experiment. The concept of Minimum criteria of success is fluid enough to accommodate varying markets metrics but stable enough to measure success.
Minimum Criteria for Success is set by the team conducting the MVP experiment. That minimum tangible performance indicator clears beyond any spec of doubt that the MVP experiment was a success and validated the assumptions, moving the idea from absolute uncertainty to fair certainty.