As a business owner, perhaps you’ve heard the term minimum viable offer tossed around, but have been afraid to ask what it means and how it can be used for your company. In this article, we’ll explore what exactly a minimum viable offer is and how it can benefit your start-up.
What Is A Minimum Viable Offer?
Simply put, a minimum viable offer (MVO, also known as a “minimum viable product,” or a MVP) is the minimum amount of benefits necessary to make a sale. Another definition states that a MVO is the version of a new product that creates the maximum amount of customer feedback and learning about the potential target market for the least amount of resources and effort. In other words, it is the cheapest prototype that customers are willing to buy.
The purpose of a minimum viable offer is to minimize risk for your project by reducing the amount of initial investment and discovering in the most efficient way possible what works and what doesn’t.
The best way to look at a MVO is to see it as a process and not as a fixed product. What you offer specifically in your MVO will change depending on the approach you take and the feedback you receive from the marketplace. Using the bare minimum features and functionality to engage your target market, your MVO will change from each successive test you have to incorporate suggestions, including your release strategy. As you receive feedback, you can customize the MVO as well as make notes for future features and modifications. It depends on what outcome you wish and the resources you have at hand. The added benefit, of course, is that you can generate revenue while still developing a product or service.
Before releasing any MVO, your company should make critical assumptions about how the product or service will be received. Make note of these assumptions and see if they are confirmed or denied by your trials in the market place. Are certain features cumbersome or unnecessary? Are you offering enough value for the price you’re charging?
Benefits of a Minimum Viable Offer
The benefits of a MVO are that it can focus your business away from non-essential tasks and steer it towards the shortest path between now and taking orders on your potential orders. Because there’s less features, there’s also less bugs and things that can go wrong in the development phase that can delay launch and cost more in the long-term.
Considering most start-ups are bootstrapped and run on a shoestring budget, MVO’s are also a strategy to gain traction in the marketplace. Bridging the gap between what your company is willing and able to provide versus what consumers want is vital to sustain your business.
While using a MVO are good for companies that wish to run on their own capital, it also helps establish a “proof of concept” that you can use as due diligence to attract investors. (ADD LINK TO “Making Your Business More Attractive to Investors”) Don’t confuse proof-of-concept as your MVO, as a proof of concept isn’t the completed solution: your MVO is the complete solution.
A Hypothetical Example
Suppose your start-up develops a brand of T-shirts that are designed for cyclists in mind. After the development phase, you decide to set up a simple WordPress-based web page, offering free T-shirts with your company’s decal on the back. A few T-shirts are created and distributed, but your customers complain that shirts only come in black, which creates overheating issues, and the vinyl decal sticks to their skin when under direct sunlight. However, despite the decal, your customers are overjoyed at the ability for your T-shirts to offer the ability to wick away sweat.
Back to the drawing board, you take the customers feedback to heart, make the shirts in a different color now knowing that black is not a viable option and that you’ll have to find an alternative to vinyl for your company logo.
With the improved design, other cyclists remark how great your T-shirt design is, but now ask for a set of matching cycling shorts and they inquire about shirts for their children in smaller size. Knowing that you now have a product that your target market, the cyclists, are interested in, you shelve the cycling shorts and child-sized shirts for future, and concentrate on marketing your product. Your minimum viable offer has been established.
As you can see, a minimum viable offer can be invaluable for your start-up to thrive. Setting up the bare minimums while keeping your focus on bringing your product to the marketplace in the most efficient manner will bring needed revenue and interest from investors.