In this article, we will talk about what an MVP is, what place the MVP occupies in the stages of business development, and how to create MVP marketplace correctly. There are also business and marketplace MVP vision plans.
What is an MVP?
The MVP concept belongs to SyncDev CEO Frank Robinson. He was trying to find a balancу between the quality of a product and business start. This is how the concept of MVP has appeared. It was later popularized by entrepreneurs Steve Blank and Eric Ries.
MVP stands for minimum viable product. It is a product with a minimum number of features. However, it is worth mentioning that such a product is already ready for use. The minimum viable product has all business-customer stages of the final product but they are limited in scope.
The first line of pictures shows that MVPs are not parts of a product which are created at different stages of development. They are not completely different products as in the second line of pictures. Here is a kick scooter, then a common scooter, a car, and finally the truck. The original purpose of this product was the transportation of a person. However, as a result, we got a truck whose main purpose is to transport goods. Different purposes of the product will attract different target audiences. The third option depicts the correct approach to MVP, since at the first stage the machine could perform the functions for which it was intended. The idea of creating an MVP is that we do not create parts and do not change the ultimate goal of the product.
The concept of MVP is:
- A new product
- As simple as possible
- The least effort
- A fast launch
- Relatively cheap
- Purpose is to test idea and find audience
What does marketplace MVP look like?
MVP can be considered as a ready-to-use marketplace from the frontend side but with manual managing at the backend. For example, you can create a marketplace frontend on a no-code platform with no backend and automation. You or your managers process orders manually: payment, shipping, etc. If the idea is successful, you can switch to advanced services and softwares with fully functional backend and automated processes. This format is a great option to test the marketplace MVP.
What is a marketplace in eCommerce?
Marketplace is a form of online business. It is an Internet platform where buyers and sellers interact with each other. Buyers, as well as sellers, can be individuals or legal persons. A marketplace differs from a regular website in the number of sellers. In the traditional sense of business, we have one seller and several buyers. However, a new link appears in the concept of a marketplace—the intermediary who is usually called an administrator. An administrator is an owner of a marketplace. There are many sellers and many buyers on a marketplace, whose relations are regulated by an administrator.
What is the difference between MMF, MMR, MMP and MVP?
These abbreviations mean different stages of development of the business. The stages may be not sereal, some steps may be omitted or repeated. There are a lot of them, but they are not difficult to understand:
- RAT—Riskiest Assumption Test—theoretical learning about your business idea.
- MVP—Minimum Viable Product—a schematic and minimalistic prototype of a real business.
- MMF—Minimum Marketable Feature—a minimum number of features that brings value to the customers. This is any value which you consider as a necessary one. This is very close to MMP and MMR.
- MMP—Minimum Marketable Product—a minimum number of features which may be valuable for the first regular customers. It has more specific values than on the MMF stage.
- MMR—Minimum Marketable Release— all changes and new additional valuable features. This stage includes updates and releases.
- MAP or MLP—Minimum Awesome/Lovable Product—development of a product to make it the most beloved and demanded by your customers.
- MB—Minimum Business Increment—balancing value-revenue, scaling a business and getting investments to get more revenue.
When and why should you test MVP?
To understand why the MVP is important, you need to understand its position in the business creation hierarchy. There are several steps to starting a business and marketplace MVP testing is one of them.
Step 1 RAT
The first step is the creation of an idea or business concept.
To create a business that will become profitable, you need to study the market. Statistics, publications in scientific and business journals, surveys of the target audience—all these will help you to find a brilliant idea. On this stage you should examine not only your business model but also a target audience. Determining the target audience is crucial. The target audience is people who will become your potential customer. it is necessary to take into account their preferences regarding your product. This will help you answer the question of how a product should look in order to be attractive and desirable.
Step 2 MVP
An important part of creating a business is MVP testing.
Most businesses close at the start-up stage. If you decide to launch a marketplace MVP is an indispensable tool since it helps to reduce risks. As soon as you have decided on the idea and chosen a business model, you start testing MVP. If we are talking about an online business, you need to create a website and run ads targeted at several segments of your target audience. Ads can be run through different traffic channels to find the most successful ones. At this stage, many business ideas appear to be irrelevant. This is fine. If one idea did not succeed, then you should go back to the first point and test some other ideas. During the testing phase, you should not invest too much money because this product should attract people with its concept. If this does not happen, then the idea is not as brilliant as it might seem. When you launch the marketplace MVP pay after launch option can greatly reduce risks. It means that a company has a free version with limits and does not require to start with paid subscription or have a 30-days trial period.
Step 3 MMF+
Starting a business and maintaining its work.
It is very important to continue working at the same level after successful launching. In order not to lose the result done at the first and second stages, you need to decide on a software and the right marketing strategy. In terms of marketplace software MVP is not difficult to choose but it becomes a bit challenging when you are trying to find the one for a long term partnership. There is an article with reliable B2B softwares. Then you should find out what advertising tools your competitors use. Of course, you should not dwell on already familiar marketing methods. Each business is specific and advertising tools that differ from competitors may be suitable specifically for your business model, too. You can hire a specialist to help identify the so-called golden links for advertising and set up sales funnels.
MVP marketplace of today’s big player
When we talk about marketplaces, the first thing that comes to mind is Amazon. It is one of the largest global marketplaces in the world. However, Amazon has not always been such a big player in the market. Initially, it was a marketplace with books only. The books were sold in the United States. There is a screenshot below, which shows how the startup looked. At that stage different sellers could display their products on the marketplace, orders could be placed, and delivery was working. So, it is a nice example of a marketplace MVP.
Only after the position and image of the marketplace in the market stabilized, the range of goods began to increase, first CDs were added and then other products. Around that time Amazon began to expand the delivery territory, which significantly increased its revenue.
How to build MVP for an online marketplace?
There are several ways to test the minimum viable product. You can create a marketplace from scratch or turn to professional contractors. The second method is more efficient, fast and convenient for entrepreneurs. There are several types of software for creating marketplaces. It can be an on-premise or cloud solution.
Cloud solutions are great for startups because they have a lower price. Moreover, the cloud platform operates on a subscription basis, which means that the entrepreneur must pay a small cost once a month or once a year. However, in the long run, cloud marketplaces can be very expensive.
For a rapidly growing business, it is recommended to choose an on-premise platform with a one-time payment method. There are some advantages of testing a business idea on the self-hosted platform. You can test the idea of one marketplace, then if this idea was unsuccessful use the same platform to test a new one. In case your idea is successful, you will not need to change the provider and get used to the new one management environment as on-premise platforms have all possibilities for scaling and developing. You can explore a free demo version of a marketplace based on CS-Cart Multi-Vendor—an on-premise platform.
What is a marketplace MVP?
MVP is a minimum viable—product with the minimum features needed to organize all the business processes. In terms of a marketplace it is a platform which includes basic possibilities of placing products, ordering, and shipping.
What is the MVP concept?
MVP is a ready-to-work product or platform with a number of essential functions and features which are enough to provide sell-buy relationships. It is a tool which allows for checking whether your idea is relevant and reduces risks in future.
How do you build an MVP?
The main requirements to an MVP are simplicity, fast start, and relatively cheapness. In terms of MVP for an online marketplace , you can choose affordable software, create a platform, provide services and run ads to check whether your marketplace is in demand.
What are good examples of an MVP marketplace?
MVP marketplace examples are Amazon and Uber at the beginning of their development. They had only vitally needed functions for maintaining the work of their marketplaces.
In conclusion, we went through the stages and development of a marketplace, the business and marketplace MVP vision plans, marketplace software MVP solutions and some other essential points. For sure, it requires a lot to start your business but today there are a lot of methods to reduce risks and be successful.