3 Product-Market Fit

A minimum viable product (MVP) is a prototype of a product with only the core features necessary to validate the product's value proposition. MVPs have become a crucial part of startups' development process as they help entrepreneurs test their ideas in the market with minimum investment.

Entrepreneurship can be a risky endeavor, and startups need to be careful about how they spend their resources. Building a full-fledged product without any testing can lead to a significant investment of time and money without any guarantee of success. This is where MVPs come in!

The benefits of MVPs in startups are many, and in this article, we'll explore why startups need an MVP.

1) Cost-effective way to test the market

Startups often have limited resources, which means they need to make the most of what they have. Building an MVP is a cost-effective way to test the market before investing in …

TEV or Economic Value to a customer (EVC) is a measure of how much value an individual customer, or customer segment, gets from using a company’s products or services

The higher EVC is to a customer, the more likely they will pay a higher price for a product/service

EVC = Tangible value the product provides + Intangible value the product provides

• Functional (or utilitarian) needs. I buy a Sam Adams beer to quench my thirst.

• Social needs. I buy a Sam Adams beer to fit in with the people at my office holiday party.

• Ego-expressive (or symbolic) need. I buy a Sam Adams beer to make me look upscale and intelligent.

Marketing and sales drive revenue, not the other way:

• You'll need to know your Cost of Customer Acquisition, Traffic conversion rate, to predict revenue (not the other way round)

• Sales per agent per month --> Sales forecast

1% increase in price, brings 11.1% increase in profit.

1% reduction in variable cost, brings about 7.8% improvement in profit

1% increase in sales volume, increase 3.3% in profit

1% reduction in fixed cost, improves 2.3% in profit.

... according to research across hundreds of listed corporates.