When Should You Stop Making Developing the MVP and Start Building the Actual Product?

I created a short video series answering this exact question that you can view for free here called The Entrepeneur’s Journey.  An MVP's goals list should provide all the data to answer that question (example below for AirBnB).  Your first job is creating that list. Long before you start building a product.

The purpose of an MVP is to get real-world customer feedback.  However, you will need to run the financials to balance what the budget can be to build it.  And to market test it too. Technical founders often greatly underestimate the cost and time needed for marketing.  It can even be more than the product build.

Your MVP goal is simple: Prove the customer will buy and like the product at a particular price point.

And that you can acquire those customers cost effectively given the margins.

The next version could be a big step, or even many incremental releases depending on the feedback, technology and financial scenarios. Ideally you will also have quantified the cost of customer acquisition, marketing and sales.

The short answer is when you have fully validated the target (niche) market need for the product, the business model and more. Basically, you have proven your business model can work.   Prior to building your MVP all you can do is market research, competitive intelligence and getting input from prospects.  This is never the same as actual customer behavior.  And does not quantify marketing and sales costs.  All of this should happen in the Business Design Process (before you start building anything). This is shown in the left yellow oval below. Easy to say, but hard to do well. Hence, about 42% of startups launch a product/service that people do not want and over 80% fail.

Teams often greatly underestimate the time required for these steps when done well.  However, when done well you will have almost certain success, versus the 80% or higher failure rate of startups.  At a minimum this will take 2–3 months full-time work.  Some many spend years working part-time improving their business model, target market and MVP design before building the product.  The more time invested here, instead of jumping in to build, the greater your chances of success.

Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.

Call (619) SCALE06 or email info@AirTightMgt.com for a complementary strategic consultation.