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Decoding MVP - What It Really Means For Your Startup

Dear Ambitious Founders,

In the bustling startup ecosystem of India, certain terms get thrown around so frequently that their original meaning becomes diluted. None perhaps more so than "MVP" (Minimum Viable Product). Today, we're diving deep into what MVP truly means, how it's been misinterpreted, and how understanding it correctly can dramatically improve your startup's journey to product-market fit.

Scene: A Co-Working Space in HSR Layout, Bengaluru

The air conditioning hums softly as three founders gather around a table strewn with empty chai cups and half-eaten vada pav. Arjun, a first-time founder working on a food delivery app for tier-3 cities, looks frustrated.

Arjun: "I've spent the last three months building our MVP, and our developer says we need another two months before launch. My runway is shrinking daily."

Divya: "Wait, what exactly are you building as your MVP?"

Arjun: "Everything! User profiles, restaurant dashboards, delivery partner tracking, payment processing, reviews, ratings... we need these features to compete with Swiggy and Zomato!"

Rajan, a serial entrepreneur on his fourth startup, nearly spits out his chai.

Rajan: "That's not an MVP, my friend. That's a full-blown product. No wonder you're running out of runway."

Arjun: "But everyone says you need an MVP..."

Divya: "I think you're misunderstanding what MVP actually means."

The Evolution of MVP: From Robinson to Ries to Confusion

three eras of MVP

The term "Minimum Viable Product" has a fascinating history that explains much of today's confusion.

The Robinson Era (2001)

Frank Robinson initially coined "MVP" in 2001 while running a software development company. He noticed a troubling trend: teams were celebrating the addition of hundreds of features, treating feature count as a badge of honor.

Robinson observed that more features:

• Made products take longer to build

• Decreased usability

• Significantly increased risk

His solution was the "minimum viable product" – the right-sized product that was:

• Just large enough to drive adoption, satisfaction, and sales

• Not so large as to become bloated and risky

In essence, it was the smallest version of a product that delivered maximum ROI while minimizing risk.

The Lean Startup Era (2011)

A decade later, Eric Ries popularized MVP in his groundbreaking book "The Lean Startup." By then, the software landscape had transformed from boxed products to internet-delivered services.

Ries redefined MVP as: "the version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least amount of effort."

The emphasis shifted toward speed of learning, introducing the now-famous Build-Measure-Learn loop:

1. Build something quickly

2. Measure how customers interact with it

3. Learn from those measurements

4. Repeat with improved versions

The Era of Confusion (2012-Present)

Following the success of Drew Houston's Dropbox story—where a simple demo video garnered 75,000 email signups before the product was built—the definition became increasingly diluted.

Suddenly, anything that could generate customer learning was labeled an "MVP":

• Landing pages

• Wireframes

• Mockups

• Prototypes

• Surveys

This is where confusion set in.

A Real-World Indian Example: The Flipkart Phone-a-Book Service

Let's consider how Flipkart, now one of India's largest e-commerce platforms, started in 2007.

Rajan: "Arjun, do you know how Flipkart began? Sachin and Binny Bansal didn't build a comprehensive e-commerce platform on day one."

Arjun: "They started with just books, right?"

Rajan: "Even simpler. Their true MVP was essentially a website where you could browse and order books, but their backend operations were manual. When someone ordered a book, they would physically go to a bookstore, purchase it, and ship it to the customer."

Divya: "That's the essence of an MVP – solving the core problem for customers (access to books) with minimal technical complexity, while validating the key business hypothesis: will Indians buy books online?"

This approach allowed Flipkart to:

1. Test market demand with minimal technology investment

2. Build customer trust in online shopping when it was still new in India

3. Learn about customer preferences, pain points, and behaviors

4. Gradually add automation and features as the business model proved viable

Redefining MVP for Clarity

To clear the confusion, let's establish more precise definitions:

Offer (Pre-MVP)

An offer is the smallest solution that promises value to users and customers. Its purpose is to de-risk demand for your MVP before building it.

Examples in the Indian context include:

• A landing page for a potential D2C Ayurvedic skincare brand to gauge interest

• A WhatsApp group providing manual financial advice before building a robo-advisor app

• A Google Form collecting preferences for potential home-cooked meal subscription service

Minimum Valuable Product (True MVP)

The Minimum Valuable Product is the smallest solution that creates, delivers, and captures monetizable value from your users and customers.

The three critical aspects are:

1. Creates value through a unique value proposition

2. Delivers value through your solution

3. Captures value through a revenue model

For Arjun's food delivery app targeting tier-3 cities, a proper MVP might look like:

Divya: "Instead of building all those features, why not start with just WhatsApp ordering from 5-10 popular restaurants in one city? Customers can browse a PDF menu, message their order, pay via UPI, and you handle delivery logistics manually with 2-3 delivery partners you've hired directly."

Arjun: "But that's so... basic."

Rajan: "Exactly! It's 'minimum' but still 'valuable' because it solves the core problem: getting food delivered from restaurants that don't otherwise deliver. You can validate if people in tier-3 cities actually want food delivery before building a complex platform."

The Triple Constraint: Desirability, Viability, Feasibility

Another way to think about your MVP is through these three critical dimensions:

1. Desirability: Do customers want it? (User problem/need)

2. Viability: Can it make money? (Business model)

3. Feasibility: Can you build and deliver it? (Technical/operational capability)

A true MVP must address all three, even if at a minimal level.

Data Point: MVP Success Factors

According to the "India Venture Capital Report 2022" by Bain & Company, capital efficiency is a critical success factor for Indian startups, with the most successful ventures demonstrating:

• Higher capital efficiency in early experiments, spending 40% less on initial product development than their unsuccessful counterparts

• Faster time-to-market, with successful startups launching initial products in 4-6 months versus 9-12 months for those that ultimately failed

The NASSCOM-Zinnov report "Indian Tech Start-up Ecosystem: Year of The Titans" (2021) found that:

• 44% of failed Indian startups cited "ran out of cash/failed to raise new capital" as a primary reason for failure

• Startups that pivoted at least once based on market feedback had a 33% higher chance of securing follow-on funding

Supporting these findings, a 2022 IBM Institute study on digital transformation in Indian businesses revealed that organizations taking an iterative, MVP-based approach to digital products were 2.5x more likely to successfully complete their transformation initiatives than those pursuing comprehensive solutions from the outset.

Practical Application: MVP Design Framework

Back at the co-working space, Rajan sketches a framework on his notebook:

Rajan: "Here's how I think about designing an MVP:"

1. Identify your core value proposition

   • What is the one problem you're solving that matters most?

   • For Arjun: Convenient food delivery in places without existing services

2. Determine your riskiest assumption

   • What could most likely cause your business to fail?

   • For Arjun: Will people in tier-3 cities use and pay for food delivery?

3. Design the simplest solution to test that assumption

   • What's the most straightforward way to deliver your core value?

   • For Arjun: WhatsApp-based ordering + manual fulfillment

4. Establish minimum success criteria

   • What metrics would validate your assumption?

   • For Arjun: 100 orders in the first month with >50% returning customers

5. Build only what's needed to launch that solution

   • Ruthlessly eliminate everything else

   • For Arjun: No app development, just WhatsApp, partnerships, and delivery staff

Case Study: Urban Company's Journey

Divya: "Look at Urban Company (formerly UrbanClap). They started in 2014 focusing only on home services in Delhi NCR. Their first MVP wasn't a sophisticated platform—it was a simple website where users could request services, and the team would manually connect them with service providers."

Arjun: "But now they have this sophisticated app with tracking, ratings, standardized pricing..."

Divya: "Exactly! They added those features gradually after validating the core value proposition: connecting Indian households with verified service professionals. Today they're in 40+ cities with 30,000+ service partners, but they didn't build that on day one."

Urban Company's Evolution: The Power of Starting Small

According to Urban Company's founder Abhiraj Bhal in a 2021 interview with YourStory:

MVP (2014):

• Initial focus solely on home services in Delhi

• Featured only a basic website with manual matching of service providers

• Key learning objective: Testing whether Indians would trust booking services online

Version 2:

• Expanded offering to include beauty services based on initial customer demand

• Implemented ratings and reviews to build trust

• Primary question being answered: Which service categories generate highest demand and repeat usage?

Version 3:

• Geographic expansion to three major cities (Delhi NCR, Mumbai, Bangalore)

• Introduced service standardization and quality protocols

• Critical hypothesis: Determining if their operational model could scale across diverse markets

Today:

• Presence in 40+ cities across India and international markets

• Comprehensive platform spanning multiple service verticals

• Robust systems for training, quality control, and service delivery

• Focus on continuous optimization and market penetration

Common MVP Mistakes by Indian Founders

1. "Jugaad" Gone Wrong: Implementing temporary workarounds that can't scale

2. Analysis Paralysis: Excessive market research without building anything

3. Feature Bloat: Adding "just one more feature" before launch

4. Perfectionism: Delaying launch until everything is "perfect"

5. Technology Infatuation: Building sophisticated tech when simple solutions would suffice

Concluding the Conversation

As the evening draws to a close, Arjun looks thoughtful.

Arjun: "I think I've been approaching this all wrong. I should scrap half of what we're building and launch something simple next week."

Rajan: "Now you're thinking like a true entrepreneur. Remember, an MVP isn't about building a poor-quality product—it's about building just enough to start learning from real customers."

Divya: "And once you have real customers and real feedback, your roadmap will probably change anyway. Better to find that out having spent ₹5 lakhs rather than ₹50 lakhs."

Arjun: "Thanks, guys. I think I just saved my startup."

Your MVP Action Plan

1. Audit your current development plan: Are you building more than necessary?

2. Identify your core value proposition: What's the one problem you're solving?

3. Design your true MVP: What's the smallest product that delivers real value?

4. Set learning goals: What specific hypotheses are you testing?

5. Launch faster: Cut your planned launch time in half by ruthlessly prioritizing

Remember, the goal of an MVP isn't perfection—it's learning. Build something small enough to launch quickly but valuable enough that people would miss it if it were gone.

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Keep Building, The Build3 Team

Building with Build3 is a biweekly newsletter helping Indian entrepreneurs build better startups. Subscribe for more insights on fundraising, product development, and scaling your business.

Disclaimer: This newsletter is for educational purposes only and should not be considered as investment or legal advice. Always consult with qualified professionals before making funding decisions.