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While minimum viable product (MVP) is the new mantra for start-ups and lean product development processes, it’s a term that needs refining in the context of hardware-oriented product development. Successful commercialisation of smart devices needs a correspondingly smarter approach – one that minimises costs throughout the entire product development life-cycle.
Genesys is introducing a new business model by which customers can configure an MVP solution from our hardware and software library, with a significantly reduced up-front design fee in return for an ongoing royalty throughout the life of the product. This new approach dramatically eases the cash flow challenges facing start-ups and SMEs, enabling them to gain a foot on the MVP ladder without having to waste money on throw-away proofs-of-concept.
The idea of MVP is sound – minimise the effort required to ensure your product is totally aligned to the market, through frequent iterations in your product or service based on customer feedback. In the very early stages of concept development, the MVP product or service may, in fact, be smoke and mirrors – such as a crowdsourcing project taking pre-orders based on little more than 3D renderings of the device.
In a hardware-oriented product, the next MVP product is typically a single-board computer proof-of-concept (POC), such as those based on Raspberry Pi or Arduino. However, the lean start-up approach inevitably reaches a point where the next product iteration needs to be a commercially scalable solution with a custom printed circuit board (PCB) assembly.
At this point, reality begins to catch up as the entrepreneur absorbs the harsh reality of the MVP approach – that all their software and hardware designs to date must be discarded. The reason is that single-board solutions are not scalable commercially and all designers of embedded systems use industry-standard coding languages, usually with their own libraries.
The cost of moving from the POC to a commercially scalable system can be an insurmountable hurdle. Sources of funding are increasingly looking for investments where the technical development risks have been largely eliminated and the entrepreneur’s POC does not deliver that. So the entrepreneur has to start from scratch and is left wondering why they didn’t start with a commercial designer in the first place.
The MVP ethos is also problematic for small-to-medium-sized enterprises (SME), where the term is increasingly being used as an excuse for sloppy work or taking illegal shortcuts in regulatory compliance.
For example, the first victim of poorly executed MVP is often good documentation – from properly capturing user needs to adequate in-line commentary in the software. This can lead to debilitating costs later in the product’s evolution as software becomes increasingly difficult to debug and potentially failing regulatory compliance checks.
However, properly executed, the MVP approach can deliver significant benefits. The key lies in being intelligent about the road-mapping of likely features and beginning with the end in mind. Good practices like documentation should not be avoided. Rather, they should be adapted to the MVP methodology.
Similarly, there should be a risk management approach to minimising the feature set, one which identifies the most likely future requirements. The aim should be to develop a system architecture that can accommodate future requirements at minimal cost, while avoiding the risk of massive re-engineering of the system at every product iteration. Genesys calls this approach Maximum Viable Architecture, with benefits illustrated by the diagram below.
Genesys argues that there can be a sensible middle ground, between shoddy and gold-plated products, where a well-engineered product can be developed at a reasonable cost. This first product to market is thus reliable, fit-for-purpose and will gain all the MVP feedback benefit without risking irreparable brand damage.
The Genesys approach to MVP is encapsulated by our white-labelling process. This process involves creating a hardware stack from pre-existing PCB assemblies, with corresponding software modules, that deliver the minimum feature set required to test your market. The benefit of this approach is that most of the hardware and software is pre-tested and properly software-engineered, ready to take to market.
Theoretically, if there was a perfect match with our pre-existing solutions, the solution could be delivered for free with a royalty-only licencing agreement. In reality, there is always a least a small amount of custom software to integrate your unique combination of features and brand it to your business. Most of Genesys’ customers adopted a hybrid compromise between a pure white-label product and a fully bespoke solution.
This middle-ground approach takes advantage of a ground change in electronics development methodologies, wrought by the Internet of Things (IoT) technology explosion, where core functions of most smart products are being commoditised.
There can be a sensible middle ground, between shoddy and gold-plated products, where a well-engineered product can be developed at a reasonable cost
For example, virtually all smart products are connected via one of a small number of communication technologies such as Bluetooth or Wi-Fi. It does not make sense for start-up or SME to create their own connectivity solution when such features are readily available off-the-shelf.
The MVP approach for hardware should take into account the ability to mix and match common IoT features and technologies. It may not make sense to strangle the feature set when functionality is available essentially for free. For example, most on-chip temperature sensors also sense humidity at no extra cost.
The real challenge lies in integrating all the component parts cost-effectively and understanding what is easily integrated in the future. A small investment in creating a flexible architecture at the start of the project can enable a whole range of future features to be placed on a roadmap. The MVP can still be minimised by leaving expensive components off the first release and delaying software development until later iterations of the product.
There are MVP purists who would argue that road-mapping raises the risk of creating expensive deadwood. This argument is based on the premise that the entrepreneurs gut instincts can’t be trusted, that a business does not understand its market and that market researchers are dumb. A counter-argument is that a valid feature set for an initial product is easily validated through fast and efficient customer research, a thorough analysis of the competition to see what has or has not worked previously, and advice from experts in the targeted sector.
The other criticism of traditional product development is that it is slow to market and not agile enough. However, there is a point at which agile becomes fragile. The whole idea of MVP is that early adopters will be forgiving of missing features because they have bought into the vision for your business. However, they are unlikely to be forgiving of a bad user experience and negative word-of-mouth amplified by social media can kill a great idea.
MVP is failing to deliver on its promise of reducing the innovation failure rate
The real problem with MVP and lean start-up methodology, in general, is that it is failing to deliver on its promise of reducing the innovation failure rate. The failure rate for innovations is still reportedly in the order of 90%. There are a number of reasons for this failure which need to be highlighted and addressed by anyone involved in product development.
Firstly, people attempting to apply MVP to hardware-oriented products need to understand the differences from software-only business models. While it may be possible to go-to-market with shoestring products and services in some contexts, it is simply not possible for any hardware product powered by electricity (active).
At a bare minimum, active products require regulatory compliance for electrical safety and electromagnetic compatibility. Any product that goes to market must be properly engineered and compliant. We need to raise awareness that a minimum feature set does NOT mean minimum quality or minimised attention to regulatory requirements.
Similarly, we need to educate new entrepreneurs that MVP is not synonymous with cheap and cheerful. MVP is part of the lean start-up methodology because of the efficiency of the process, not due to any lack of funding.
Lastly, we need to educate people to be realistic about the turn around time in product iteration. Many startups naively think in terms of weeks or even days. In reality, any electronic design project will take months due to a range of factors from resource allocation, quality control, validation processes, compliance testing and the like.
To find out more about Genesys' approach to developing products download our whitepapers on Developing Smart Products and Developing Electronic Medical Devices.