Developing a software product comes with some challenges – defining the scope of the project given time and budgetary constraints is one of the most prominent.
One way to approach this challenge is to initiate the project with a Minimum Viable Product (MVP). The MVP concept revolves around delivering a minimal set of features that are functional for initial users. All future development is further based on the users’ feedback. However, this approach may give the impression that the agency is limiting the client's proposed features to fit within the assigned time and budget. This is where the Maximum Value Product (MxVP) strategy comes into play.
In this article, you'll discover how the MxVP approach can help you make a strategic shift by prioritizing value over the amount of work.
Finishing is torture... There's always some newly seen flaw. But the little glimpses of beauty between the anxiety make it worth it. – Jacob Collins
The MVP concept is a development strategy that involves creating a basic version of a product. This version includes only essential features which will satisfy early customers and gather feedback for any future development. The MVP approach allows businesses to test their product assumptions in the market with minimal time and resources constraints. Once it’s validated in production, the product can then be developed further with new features and improvements.
This concept becomes clear when the company developing the product is also the one running it. In such cases, the company conducts its market research, validates the concept, and, within that process, develops the MVP in-house. Usually, this means the company has a comprehensive understanding of budgeting, and creating the MVP is seen as an internal investment rather than an external expense.
In short, the MVP concept works particularly well when the product vision is internally led and the product is developed in-house. But, what if the company decides to outsource an external agency to develop it?
If that’s the case, the company will present a set of requirements to the software agency, expecting the agency to develop the digital product within specified time and budget constraints. However, in such a situation, if the agency suggests the concept of a Minimum Viable Product (MVP), it can sometimes lead to misunderstandings. On one hand, as we already mentioned, it might seem like the agency is subtracting from the client's original idea by proposing an MVP. On the other hand, the oversaturated market may not be willing to use the product enough to provide sufficient data to validate it. Another drawback of the MVP concept is that it involves testing the product's value with real customers during production, often putting user experience improvements on hold for the future.
So, how can we ensure a mutual understanding of the project’s scope and gain more confidence in the product’s value even before it’s built?
In the next chapter we will consider changing the strategy towards one that can resonate with the client more clearly and offer meaningful insights into which features will provide the most value.
Maximum Value Product (MxVP) is a development strategy that involves creating a product with the maximum value possible within the given constraints of time, resources, and budget. This approach focuses on delivering a product that meets the customer's needs and provides the highest possible value to the end-users.
The concept of a Maximum Value Product proposes putting upfront efforts to find the most important problems the product should solve. Following that initial phase, the agency will sketch the conceptual solution, a prototype that solves these problems. Subsequently, together with the client, the agency will validate the concept, e.g., by conducting user testing on a prototype.
In short, the MxVP concept focuses on features that deliver optimal value to customers, ensuring careful shaping and the best possible user experience. It can offer several benefits, including managing client’s expectations and maximizing the agency's ability to deliver a solution within budget constraints.
In practice, implementing the MxVP approach can look something like this:
Applying the MxVP strategy gives the agency some leverage to tackle the most important challenges in the development process:
Even though software agencies usually charge their working hours or person-days, the true measure of a reputable agency lies in their dedication to the value they deliver. Rather than fixating on output and tasks, a distinguished software agency stands out by focusing on maximizing the outcome, and the actual value the product they build creates. At least that’s how we do it at COBE. One way to employ this technique is by using the Maximum Value Product approach.
In sum, the MxVP approach helps the clients and end users with the following:
Let us know your thoughts and experiences. What are your challenges in defining the software product scope? How do you address them? Feel free to reach out if a concept of Maximum Value Product resonates with you or you have any comments. 🙂