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In this article, let's discover about the landscape of start-ups, the current urgent demand for building an MVP and Eastplayers' philosophy about that.
With the health crisis and recession, many restaurants and other businesses have been hit hard. Some businesses, such as online retailers, have done well. Overall, the gross domestic product plunged in the second quarter of 2020 but bounced back strongly in the third quarter.
In the USA, the rate at which Americans are launching new businesses provides another gauge of economic health. In the recession a decade ago, the number of startup businesses fell substantially and never fully recovered. Indeed, the U.S. startup rate has trended down since the 1970s, which is a concern because new businesses are a major source of jobs, innovation, and competition.
As startups were falling, business shutdowns were rising. We don’t have accurate, up‐to‐date data on permanent shutdowns, but various indicators suggest they have risen in 2020. We know that shutdowns rose during the last recession and that some cities and industries have been hit hard this time.
The good news is that we appear to have had a big turnaround in startups. Apparently, from the third quarter of 2020, Americans are opening or planning to open large numbers of startups. According to the Census data, applications for online retailers have gone through the roof.
The apparent upward spike in entrepreneurship is impressive, as we did not see such a jump during or after the recession a decade ago. A share of the third quarter’s startup boom likely represents “entrepreneurship by necessity,” or people thrown out of jobs scrambling to find new sources of income. Others are likely seeing opportunities created by the health crisis, such as mask manufacturing. As one reporter noted, “because of the huge changes in economic behavior brought on by the pandemic, a lot of people have ideas for new businesses.”
Nguồn: thanhnien.vn
That’s the landscape of the giant. How about things in Vietnam - the well-known leading start-up hub of Southeast Asia in recent years?
Since 2017, Vietnam has emerged as a startup hub closely competing with regional leaders. Then came 2020, when the country recorded a US$400 million increase in investments, proving well that the nation could rival Indonesia as Southeast Asia’s growth market for tech investments. Although the first half of 2020 witnessed a 22% reduction in deals compared to the same period in 2019, owing mainly to the economic impact of Covid-19, fundraising by Vietnamese startups has shown signs of recovery in the second half of the year.
Experts reckon that there are numerous drivers of Vietnam’s emergence as a startup hub in Southeast Asia. These include revenue growth in digital sectors such as fintech and e-commerce, rising consumer spending, increasing interest from foreign investment funds – particularly Japanese, Singaporean, and South Korean VC funds – and targeted government support.
Even foreign investors have played a major role in funding Vietnamese startups. In February 2020 for instance, Affirma Capital invested US$34 million in Sieu Viet Group, which focuses on online recruitment. Japan’s SoftBank and Singapore’s GIC invested US$300 million in fintech VNPay. US-based 500 Startups aim to invest in 80 Vietnamese startups by 2021.
The Vietnamese government, to encourage entrepreneurship, has established a number of funds at state, provincial, and city levels to support startups. In addition, the government has also collaborated with countries and banks to develop funding and innovation programs, provide loans, technical training, and business mentoring.
That made the Vietnam startup ecosystem exhibit impressive development while keeping the pandemic under control.
Nguồn: binhnuocthongminh.vn
With the economic landscape stated, we guess that the flame of building your own product is stronger inside your body for now.
When turning your idea into a tangible mobile product, you may be tempted to pack it with countless features and functionalities so that it can cater to every need of your users. The more, the better, right? While that may apply to other product types, apps don’t work like that. For mobile products, more features don’t equal higher value. An MVP is the perfect example of this. You can develop an initial version of your app that lacks all the bells and whistles but still focuses on the key features that offer value to your users.
As we already stated, MVP stands for Minimum Viable Product, and it is a strategically basic version of your app that only includes its fundamental components and features. An MVP will directly target the core needs of your end-user and have just the main requirements while leaving out any extra features. Building an MVP helps you save money, time and lower your risks. However, it also allows developers to simplify the development process and collect valuable feedback from users with the least effort. This last aspect is one of the reasons why building an MVP is so important.
You can spend months researching your market to death, you can follow best design and development practices, and you can spend millions on developing your app, but none of that will give you accurate, usable data. The best course of action is to test a tangible product in an actual market. You can release your MVP to a small group of targeted users and gather feedback, or you can launch it directly into the market. This way, you can try it on your real users to see if it solves the problems it’s supposed to and if it has the potential to succeed long-term.
Additionally, building an MVP is especially beneficial if your app offers something new or groundbreaking with little to no market. In this scenario, an MVP will surely help you test the waters and check if your idea is accepted and takes off before investing too much in it.
It’s important to note that building an MVP does NOT mean releasing an unplanned, ugly, and cheap nonfunctional mobile product. Instead, it means releasing a usable and lightweight app that solves your users’ problems while giving you the tools to make incremental updates and iterations to design and features, all based on honest user feedback. This way, building an MVP allows you to legitimize your idea within your market and expand from there as you learn. However, while you will probably have to make changes along the way, the core value proposition should stay the same.
Studies show that 90% of startups fail. From this sky-high percentage, about 42% fail due to misreading market demand and 29% due to funding problems. Here’s where the MVP comes to save the day; by validating if the app satisfies users’ needs and if it gets traction. Now, we are not saying building an MVP is a sure way to success, but it will undoubtedly counterbalance some of the forces that can drag your startup into the void of these alarming statistics. This can be priceless to help you guarantee some success before you spend a whole lot of money on marketing.
See, when your first product is minimal and has just the right amount of features, you can initially save big money, which you can inject into other more pressing aspects of your business. When you release your MVP to the market, you can incrementally inject capital into your app, and your development team can implement iterations based on real-user feedback. This way, you can avoid misreading market demand and adapt to it on the go. You’ll also be more spry and responsive to the needs of your users, which will make them bond better with your product.
This process of adaptation provided by the MVP can also help your development team gauge if users are interested in the updates they’re giving through the app. As a result, they can remove or add the necessary features according to actual user requirements and needs instead of playing an expensive and useless guessing game. On that same note, building an MVP gives your development team the readiness to react quickly, anticipate, and adjust to your market’s circumstances and actions. This can be crucial to give your product a favorable advantage over your competitors.
We must add: theoretically, you don’t need an MVP to launch your app. You can go all-in from the get-go if you choose to. But remember: if you risk all your resources on building a mobile product and it fails, your losses will be infinitely more significant than if you were to ease into the market with an MVP.
- Saves You Time and Reduces Development Costs:
As we already learned earlier, funding problems are one of the main reasons why startups fail. Making smart monetary decisions is crucial to ensure your startup will have a steady flow of cash. Here’s where building an MVP can be highly beneficial for your company. When you go all-in from the get-go and develop a sophisticated product, you’ll be waiting for too long before releasing your app, and you’ll likely risk spending well beyond your budget. Splurging money on something whose unpredictability is so high might not be a good idea, especially for startups who often have limited resources. You see, a mobile product can take an average of 4 to 9 months to develop, depending on the complexity and structure of the app. This time frame is tied to varying development costs, but global data shows that most quality apps can start at $100,000 and can go as high as $1.000.000. Sure, you’ll get an outstanding final product that you can release to your market, but how much your app costs doesn’t guarantee acceptance. Just as with a low-cost app: either your users will like it or they won’t. If they like it, great, but if they don’t, the time and money you spent on developing it go right down the drain.
On the contrary, when you initially choose to build an MVP, you’ll likely be paying anywhere from $10,000 to $50,000, and your development team will not take more than 2 to 4 months building it. See the difference? Foregoing any unnecessary features and implementations will reduce your initial costs immensely and will shorten your time-to-market by more than 50%. This massive reduction in prices directly results from the speed at which innovative development teams, can build and release MVP products compared to full-featured applications.
Additionally, with an MVP, you’ll receive instant user feedback by using KPIs, analytics and store reviews. You’ll learn if your app targets the proper needs and solving the correct problems, and you can plan accordingly. This way, you’ll know the outcome of your app before spending too much on it, and you can make the necessary investments as you go, injecting capital only on the required features. This approach will significantly enhance the user experience, raise your app’s retention rates, and ultimately boost your startup’s growth.
- Helps You Deal with Competitors and Achieve Market Relevance:
As you probably already know, the modern app market is very crowded. Coming up with a new idea for an app or developing an existing concept with an innovative approach is getting more complicated every day. There are currently 9 million different apps available in app stores worldwide; saying that the competition is fierce is an understatement. At this point, the market leaders are all set, but things are getting trickier for startups releasing their new apps. Users tend to download new apps out of curiosity, and if they don’t find any value in them, they delete and move on to the next. Hence, the importance of an MVP.
Building an MVP instead of a full-feature app will give you the chance to test your app before committing to anything too big and test the waters to see if your users respond. This benefit gives you a significant advantage over your competitors because you’re enriching your app according to the market’s demands. This way, you’re targeting specific needs, and you’re continuously building a more polished and valuable mobile product.
Also, because the growth of your product is gradual thanks to your MVP, your development team can use newer technologies as they become available. As a result, they can update your product by integrating emerging technologies and fresh features, thus helping your product stay relevant in the very competitive app market. Granted, your competitors may also use MVPs. Still, if your development team stays reactive, your app can easily stand out by delivering better and more unique features and value as your users’ demands increase.
- Gives You Better Access to Funding From Investors:
Studies show that in 2021, one in four startups cannot receive the funding they need, limiting their growth and, in many cases, leads to failure. For this reason, you must avoid falling into that 25% and take all the necessary steps to prepare yourself when you’re ready to start looking for investors. One of the most useful, impressive, and informative tools to leverage investor buy-in is the MVP.
The key to receiving the funding you need is building confidence in your product and highlighting its value and ability to solve a real problem. Building an MVP is an effective method to get these points across because it materializes an abstract concept and allows your potential investors to see your idea live. It will also show them that you have a solid app based on actual market research that demonstrates the validity of your product.
Furthermore, since an MVP isn’t an abstract idea but a fully functioning product, you can show investors your app in action and provide them with a physical product they can see and use. This way, they’ll get solid evidence that you know what you’re doing instead of guessing and improvising. If they see you’ve already launched your app and have a decent user base, they’ll get encouraged because they can invest without having to wait several months to see the return of their investment.
- You can Test Your Business Concepts and Verify Market Demand:
This benefit is one of the most relevant of building an MVP. Testing your concepts by releasing a lean app rather than a full-blown product gives you the power to verify that your mobile product resonates with your users. Your development team gathers all the feedback from these users and analyzes it to change your product’s direction according to their findings. If your idea doesn’t resonate or adds value, you can mold it and adapt better to market demand. This way, you don’t have to commit to a static concept and risk all your assets on an untested idea.
Building an MVP also allows your development team to tailor your app’s features and functionality to suit your users better. Skipping an MVP and going with a feature-heavy product will make it harder to update and change. Developers will likely need to rebuild your entire product to adapt to your market’s needs. Doing this will not only cost you too much money, but you’ll waste time releasing your product and give your competitors an unwanted advantage over you.
Some of the biggest companies in the digital world began their journeys by launching an MVP. They grew by gradually refining it and adding features upon receiving honest user feedback. This approach allowed them to remain financially sound and grow slowly into the giants that they are today.
Initially, Instagram’s MVP was centered on photo sharing and filters only. Users took pictures, applied one of the few available filters, and finally added them to an album on their device. At that time, the market was flooded with photo editing apps, making it hard to stand out. However, thanks to the data gathered from that initial MVP, they slowly and gradually started adding the features that gave them their unique value proposition. They started adding video options and allowed users to edit, upload, and share their pictures using geolocation, hashtags, countless filters, and even broadcasting live. Thanks to the insights gathered during their MVP stage, they became one of the leading social networks.
The most popular social network started as an internal college connection network called Thefacebook. Mark Zuckerberg’s idea for Facebook’s MVP enabled connections between students from the same class or college by letting them post messages to boards and send friend requests. The idea kicked in full force, and soon other colleges were using Facebook. The gathered data from those users allowed Facebook to gradually start adding the features that eventually lead to its worldwide success.
Airbnb
AirBed&Breakfast started as a simple MVP to provide low-cost accommodation to the people who were visiting San Francisco for a design conference. Airbnb’s founders realized that hotels in San Francisco were sky-high expensive, identified this as a problem, and offered a solution. They launched a simple website with a few photos of their apartment and immediately got three guests. Today, the startup has morphed into a hospitality giant with millions of users worldwide and countless accommodation options to serve every need and budget.
Spotify
Spotify’s founders identified a problem when music lovers wanted to stream music online or on their devices. They started by launching an MVP, Spotify AB, that helped music lovers stream songs online. Their beta testers were influential music bloggers from Sweden who ended up loving the product, gave feedback, and spread the word about Spotify. Gradually, they added more features like song sharing and playlist creation and expanded their market to become the success they are today.
Understanding this huge demand and the crucial role of MVPs on the market in the “new normal", both domestic and overseas, Eastplayers - as a leading software consulting and development company, who wants to build up successful, impactful and sustainable world-class digitized business - is striving for turning start-ups' vision into big success in reality through the very first brick - MVP.
With this collaboration, Eastplayers aims to bear the great burden faced by start-ups from the early stage. Daring to become a long-term strategic partner, we position ourselves not just as technology experts, but also as a product roadmap developer and an insightful business professional. Considering ourselves as members of your team, we thirst after success with smart investment exactly like you do.
Obviously, there are plenty of services in the market ready to give you solutions. However, we are so confident to walk our own route towards your business. The philosophies base on 3 main mindsets:
Firstly, we choose to listen carefully from the very raw materials, such as product ideas, problems, assumptions about the market or roughly expected outcomes. We then analyze every little detail before jumping into plans, mutual alignment and execution for your MVP. Every step would be visualized so that everyone can surely be on the same boat towards the aiming vision.
Secondly, we pick suitable human resources from our richly experienced, dedicated and highly flexible talent pool to join in the MVP crafting process. Young and ambitious, our developers, designers, business analysts and QA-QCs are never tired of learning new stacks and breaking any barriers in any industry. With a sharp mindset and competitively quick actions, we believe we would vastly contribute to your success.
Thirdly, we tailor our approach based on the very specific demands of each business, from project management style, timeline, features focus, delivery method to even pricing offer, from even this MVP stage. This is due to our very understanding of the uniqueness of each product in different fields. With full belief in our approach against one-size-fits-all, we would give your business just what you need and want. Ultimately, you would maximize your investment , especially when you are a start-up being on a tight budget at the starting point.
One of our examples applying this approach successfully is Tribee. You can see the full details in here.
All in all, your success, from an MVP, is our great honour.
Eastplayers hope that we have provided more information on our philosophy of how we build an MVP for start-up. Eastplayers has always strived for building fast and cutting-edge yet insightful technology for successful, impactful and sustainable businesses of our business partners.
You can initiate your start-up with us rom now.
Thank you for reading and hope you have a nice day.
Reference source:
https://www.cato.org/blog/business-startups-soar
https://www.foonkiemonkey.co.uk/why-should-you-build-an-mvp-for-your-startup
https://techwireasia.com/2021/05/why-vietnam-is-the-leading-startup-hub-of-southeast-asia
