04 November 2022

The MVP and a different approach to work

Author: Luca Bianchi - International Part Time MBA student

There are some words and concepts that follow you during an entire study cycle. You start hearing something at the beginning, and then you gain a better comprehension of the meaning and of the different nuances. One of these, in my case, was “Minimum Viable Product”, a concept found in the business case from the Industrial Economics course and developed during the final phase of the Project Work for the MBA graduation.

The Minimum Viable Product (or MVP) is a development technique in which a new product is introduced in the market with features which are basic, but sufficiently interesting to get the attention of consumers. The final product is usually released in the market after several improving steps deriving from customer feedback.

It is a concept close to the prototype, a tangible product (or service) that reflects the basic features of the approved idea: the difference is that a prototype usually remains internally, helping all the departments to work on it and allowing the final construction of the good. The MVP is a totally external product, given to the market in order to get the largest amount of feedback.

In his famous book,  “The Lean Startup”, the definition given by Eric Ries is: A new product that allows a team to collect the maximum amount of validated learning about customers with the least effort. The MVP is the best way to test ideas and get from the market positive input, which is hard to predict ex-ante.

We can all agree that the launch of MVPs is perfect for start-ups with disruptive ideas. Founders prefer to launch a simple version of products (with bugs or defects) within a few months, reaching a smaller number of potential users, than to launch a perfect product years after the conception of the idea. The three main reasons why it is better to start with an MVP are:

  • the launching company can avoid a competitor or an incumbent marketing something similar before they do,
  • learning directly from the user,
  • starting to earn revenues earlier.

During several MBA lessons at POLIMI Graduate School of Management we touched on this concept. Digital transformation, operations, innovation and marketing management are some of the disciplines linked and strictly related to the launch of an MVP. By analysing and discussing business cases, we had the possibility to understand the root causes that lead decision makers to go for the marketing of a prototype instead of a sharp product. I found them to be an opportunity to deep dive into different industries and their main challenges.

The question that usually arises is: if there are so many advantages to launching an MVP, why is it usually only start-ups which profit from this development technique, while bigger companies and multinationals do not exploit it? The simplest answer concerns the branding. An established corporation would not risk its reputation by providing an incomplete product. Their prominent position obliges them to always provide customers with flawless solutions.

I think that there is another thing that deters some companies from trying this kind of technique: an internal resistance to frequent changes of direction during the construction phases of the output. Large firms, with a low turnover rate, are used to marketing the final product with all the characteristics having been internally discussed and approved. It could be that the final products incorporate some concepts derived from the market, but only via surveys to hypothetical buyer personas. Once decided, the building and setting-up processes have to proceed according to a well-defined map. Radical changes to the map or to characteristics of the products are usually rejected by working teams.

This is why young companies, with few resources, are able to do better than established ones and this is why large companies need to forge partnerships with companies with high agility. It is not (only) a matter of money or investment: the mindset and ability to quickly respond to market changes define successful companies with a growing and promising outlook.

Maybe from now on, all of us — beyond the company we work for — need to take a different approach to work by adopting an agile and modifiable way to propose and sell things, as well as a nimble attitude to frequently transforming what is already new, reflecting more on the future benefits than on the job already done.

For this, reading business cases could help to open our minds. It is an exercise that improves our ability to see similar patterns of issues applied to different industries. They do not provide us with a “one-size-fits-all” answer to everything, but they are a way of starting a discussion with peers and finding creative solutions to everyday problems. I think that this is one of the most important parts of the Master to be exploited.

04 November 2022

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