Why Minimum Viable Products Fail

Vikas Agarwal

MVP Development, Product Management

In today’s digital world, MVPs (Minimum Viable Products and it’s development process) are so important that they spell the difference between a successful startup and a failed one. Many of the popular tech companies who were once startups succeeded because of a very good minimum viable product. Companies such as Dropbox, Uber, Twitter, and even Zappos, had a chance in the product market because their minimum viable product was top-notch.

In this article, we will examine why many startups have failed to replicate the success stories of these popular tech companies and create a successful MVP. In other words, we will discuss the reasons why MVPs fail.

Good Idea, Bad People

One of the leading causes of a failed MVP is the bad combination of a good idea and bad people. Ideas are very important for the success of a startup. In fact, the very essence of most startups is the revolutionary idea that has the potential of solving problems and changing the way people lived. However, good and groundbreaking ideas are not sufficient for a successful startup or MVP.

Good ideas need to be implemented by good and competent people. The conversion of an idea, which is intangible, to a minimum viable product needs to be led, carried out, and also supervised by good and competent people. Therefore, in a situation where the good idea is handed over to bad and incompetent people to handle, one can expect a failed MVP, and by extension, a failed startup, regardless of how good the idea was.

An example of a startup that had a failed MVP due to this cause, Good Idea, Bad People, is Beepi. The idea behind Beepi was impressive. It works even. The startup was to create a platform for the exchange of used cars. At the time e-commerce was taking the world by storm, Beepi was a great idea. The startup raised about $60 million in Series B funding. This shows how workable the startup’s idea was.

However, Beepi failed and had to close its doors in 2017. The reasons for the failure were two. The first one, the company was too ambitious and wanted to grow too fast. This is not a bad thing in itself, but it gave room for the second error which was that a lot of spending done was unrealistic. The bad people factor comes in here. At a point, the company spent about $7 million per month on salaries alone, much of that money went to inflated salaries and unnecessary expenses.

False Start

This is another problem that kills off startups and their MVPs. As the term denotes starting before time as used in athletics and other sports, man startups “start’ before their time. The first step or process in building a sustainable startup is getting to the problem-solution fit. This means, ensuring that the startup idea solves a problem faced by consumers. As basic as this sounds, it may be surprising to know that a lot of startups neglect it and skip the process of developing a product (MVP). This product is bound to fail, because there is no assurance that the product solves any problem, and even if it does, there is no saying its efficiency and durability.

One of the startups that failed based on this reason is Triangulate led by a software engineer, Sunil Nagaraj. Triangulate was a proposed dating app with a great idea and a great team. However, the zeal and eagerness to build clouded the founder and his team’s judgment and they rushed to create a product without testing its viability with users.

Unclear Problem Definition

As mentioned in the point made above, it is difficult for any startup or MVP to succeed without effectively going through the problem-solution fit. However, many startups also encounter a problem with this stage, despite going through it.

One of the common problems that startups face in this stage is the poor definition of the problem the startup is trying to solve. Startups need to accurately and adequately define the problems they are trying to solve. This is because the startup can only get a perfect MVP born out of an idealized solution when the problem definition is done right.

There are no two ways to go about it. Startups need to clearly define the problem and understand the problems it is trying to solve. This is why research is a very important part of the startup process. You need to get the whole picture about a problem, and not just some side of the problem, the startup, and its resulting MVP is to succeed. You don’t want to create a solution for a problem and later discover that there is another dimension to the problem, a dimension that was not factored in before.

This was one of the problems faced by Nagaraj’s Triangulate startup.

The Solution Development Process went wrong

Having understood the importance of adequately defining the problem and researching the viability of the solution to solve the problem, the next step is for the startup to develop an adequate solution for the problem. However, we find that many startups also face a problem at this point, and the failure to resolve these problems results in the failure of the MVP built from the solution developed.

Failing to iterate and develop different solution concepts is dangerous to the success of an MVP. You cannot create a perfect solution without going through the motions and the process of creating multiple versions of the solution and deciding the one that fits perfectly. This process should go on over and over again, evolving into a high fidelity prototype with each iteration until the final design that looks like the final product is realized.

Solution Validation in a Hurry

After getting the solution development process right, the next step is solution validation. And at this point, what the startup should focus on is testing the acceptance of the finalized solution by the users. And instead of the solution development process that happens in-house with one or few members of the team, this validation process takes place outside the startup, as it puts the prototype in the hands of real users and allows them to test the product.

One of the mistakes that startups make at this point is trying to rush the solution validation phase. This is dangerous to the success of the eventual MVP and by extension, the success of the startup. This makes sense because why would you rush the process of ascertaining that the solution you built for users is accepted by users?

Building for Investors rather than Consumers

Another trouble that many startups seem to have fallen into is the tendency and urge to want to impress investors. Again, this is not a bad thing in itself. After all, investors are betting their resources on the success of the startup and the product it is trying to build. However, many startup founders get carried away with the pressure of satisfying investors that they start fine-tuning their products to appeal to the investors rather than consumers.

The problem with this mistake is that while you may end up winning investors on your side, you may not find the acceptance of consumers which is indeed the most important. The investor is putting in resources for a product that the consumers would like and use. When this doesn’t happen, the startup may fail and the investors may have to back out.

Conclusion & Possible Remedies

Many startups have failed based on numerous reasons. However, most often than not, many of these startups do not fail because of a bad idea or poor funding. There are other intricate reasons as espoused by this article.

From each of the reasons mentioned above, it is easy to see that many of these reasons stem from the tendency of the startups to skip one or some of the important steps in the creation of a viable product. Therefore, the first solution or remedy to failed MVPs and startups is ensuring that all of the important steps involved in the process of building a solution are strictly followed. This ensures that you don’t only create a viable product, it also ensures that you have enough time to go through the testing and re-testing phase.

Another indication from the reason explained in the article is the tendency to want to please or impress investors at an early stage. And to this, a possible solution is to bootstrap. By providing the funding needed for the solution by yourself, you get to focus on creating a viable solution acceptable to consumers. This should be your goal at the early stage of the startup.

However, it is important to mention that following all of these steps and recommendations doesn’t mean that the startup would not face any problems. There is no smooth sailing in the startup world, and this is where persistence comes in. One of the common traits present in almost all successful startups is the persistence of the founders and their teams.

Vikas Agarwal

Vikas Agarwal is the Founder of GrowExx, a Digital Product Development Company specializing in Product Engineering, Data Engineering, Business Intelligence, Web and Mobile Applications. His expertise lies in Technology Innovation, Product Management, Building & nurturing strong and self-managed high-performing Agile teams.