Focus on Minimum Marketable Product for Startup Success

A Minimum Marketable Product is a version of the product with minimum marketable feature or feature that can offer value for your customer and generate revenue for a business.

The term MMP, or Minimum Marketable Product was first coined by Sean Ellis in 2010 while working to build a user research platform, Qualaroo for the market. Sean was frustrated by the fact that there were numerous startups that offered no value to a paying customer through their products and hence were failing miserably.

Why Startups need to think beyond MVPs?

The long term success rate of startups roughly lies between 10% to 20%. So there's a 80% to 90% chance of a startup to fail within the first five years of their operation. Let's see some key factors that lead to failure in most startups.

Lack of product-market fit:

Essentially a product has to address the needs of its target customers to be considered as a good product market fit. But the concept of a good product market fit just doesn't stop at fulfilling customer demands. The product should solve customer's problems in a user friendly way, should be marketed to the right kind of customers — the right demographic and psychographic —, and should be priced right.

Run out of money:

The last point of a product-market fit, the part about the pricing is one of the most important factors determining the success or failure of a startup in the initial stages of the business. Here's why?

A startup is a business in its initial phase of growth. They have operational costs — they have to pay for product development, for raw materials in case of tangible goods, have to pay human resources, marketing, the list goes on.

The business would run out of money if they don't make enough revenue or don't raise enough funding from investors. If the product isn't making revenue in the beginning, it could be signaling a fact that there's something terribly wrong with the revenue model. Worse, it may be solving a problem, but the price of solving the problems outweighs the product benefits.

Competition:

Startups may face fierce competition from established or new companies, making it difficult for them to win customers and gain a good portion of the market share. Maybe their product is not different enough to convince a customer to move to their solution. It also could be due to branding and problems with their customer experience.

Management or Execution Problems:

Sometimes, the solution a product offers could be a great market-fit, but the problems may lie within the organization delivering it. Lack of expertise and experience among the management, or poor skills of the team could lead to poor decision making and potential conflicts among members.

Even if the management are strong, failure to execute according to plan can lead to a number of problems: to product delays, poor product quality, inefficient operations, cost overruns, and bad customer service.

Now that we're aware of the reasons for a startups' failures, let's see how an MMP can help us navigate most of the factors, if not all.

From the problems listed above, minimum marketable product can help you deal with problems related to: product market fit, cash flow problems, and market competition. In fact we could well argue that the execution part of the problems can be identified at this stage of your product development.

How is MMP is different from MVP?

An MVP, or a Minimum Viable Product refers to a product with just enough features to satisfy the needs of early customers who would provide feedback for future development of the product. The term MVP was coined in 2001 by Frank Robinson, a venture capitalist and former software developer. It gained popularity with the publication of Eric Ries' 'The Lean Startup' in 2011.

Minimum Viable Product focuses on the aspect of developing your product with bare features and testing them with a group of people. The sole purpose of an MVP is to test your product and get feedback to improve on it. So you develop your product iteratively saving money and resources at a very nascent stage of your business.

Remember, the focus on the product and the solutions and not the marketability of it.

The Minimum Marketable Product on the other hand emphasizes on building marketable products, which with focus of your product being a good market fit. This covers crucial aspects of a successful product mix such as: branding, marketing, revenue and competitiveness.

Difference between MVP and MMP

I'll take two examples to further illustrate the difference: AirBnB and DropBox.

In 2007, the founders of Airbnb, wanted to raise money to make rent in San Francisco, and decided to rent mattresses in their apartment to interested conferences attendees who were there in the city for a relatively short period and were having difficulty finding accommodation at the time. On understanding the viability of their solution , they launched their site Airbedandbreakfast.com officially launched on August 11, 2008, which was later changed to Airbnb in 2009. Here, customers could book temporary accommodation through their platform, generating revenue for the company.

Drew Houston , the founder for Dropbox did not even create a fully functional product till he was sure it'd sell. He created a landing page with a video explaining the product, with a subscription to a waiting list for interested customers. The non functional site generated enough hype and interest for potential customers, and investors helping Houston to raise money for the actual working product, an MMP.

Either founders wouldn't have tasted success if their MMP had gone wrong. Let me clarify an important point here. The idea behind this post is not to criticize the concept of a MVP. But to see it as a stepping stone to building an MMP. The idea is to open your eyes to see an important fact in clear light: A successful MVP does not guarantee a successful MMP. A successful MMP does assure a great degree of success to startups.

Roadmap To build a MMP

There are several successful factors that help build a successful MMP. Here are few most important ones.

Define your core value proposition

Clearly define what your product does and what value it provides to your customers. Keep it simple, easy to understand and remember. For instance, Airbnb is a service that helps you rent short term and long term accommodation in places across the world.

Identify your target audience

It's crucial to identify who you're building the product for early on in the process. This would help you to build the product around the needs of your focused target customers and not a wide market.

Prioritize features

Focus on the most minimum marketable feature or features. If you feel overwhelmed by the number of the features you plan on releasing, chances are your customers will feel the same. Use a feature prioritization matrix to focus on the ones that need to be developed initially helping you to build the product faster check its market feasibility.

Brand it right

Don't overlook this crucial aspect as it reflect the quality of the product you're releasing to the market. Your product may be a good fit, but getting the branding wrong could lead wrong audiences to product, drive potential ones away. Build the right personas to understand your target customers really well.

Price it right

Getting the pricing right is of utmost importance to your product and business success. Evaluate the value proposition, and your competition to arrive at the right price point. You have to generate revenue and profits in the long run to call it a success.

Build and launch your MMP quickly

The sooner you launch your product, the sooner you identify the outcome. Plus, the sooner you start getting customer feedback. You could quicken the process by using off the shelf solutions and launch to a group of beta testers before introducing it the market.

Collect feedback and iterate

Customer feedback is crucial to measure your product success and to gain inputs to improve on the product. Get customer feedback through forms, interviews, and monitoring social media and review site, and analyze your product usage data. Collect all feedback, renew your development plans, and iterate on your product and add new features. Remember to go through the process after each feature or version release.

Conclusion

A MVP, a Minimum Viable Product is just a stepping stone to and MMP, a Minimum Marketable Product. The measure of a startups true success lies not just in the success of an MVP but after the launch of on MMP.

Agile Soft Systems focuses on building successful MMPs for startups with a focus on customer experience. Our 360 Design Workshop for Startups will help you evaluate the features you must focus on for your MMP, and our expertise in modern application development will help you launch immaculate products in less time.

Reach out to book a consultation with our expert team.