Why Startups Are Better at Developing an MVP for Startups and How This Affects the Likelihood of Meeting KPIs Growth Before the Next Investment Round
Every startup knows what it is like to develop an MVP. Many startups strive to get their MVP done to present it to potential customers, investors and get as much feedback on the product or service so that the team can improve it during the following iterations. However, dozens of startups are failing even before they can approach the market and therefore it has become essential for startups to develop an MVP. This will have a major impact on advancing to the next investment round and receiving all the resources to develop the final product.
Who can be more experienced in building an MVP for a startup if not startups themselves? The great thing about building an MVP is that a startup can reach out for help and consult another one and accelerate the whole process. All startups are in the same boat trying to succeed and avoid early failure. In this case, companies that once were in that same position have gone through the same road and are proficient to develop an MVP for a startup in the first place! This will serve as a great foundation for future successes of the startup and will give the beginning company a great chance of receiving new investments in the next round.
What is Developing an MVP?
A minimum viable product (MVP) is a product that includes only its basic features and functions that allow a company to let it be used publicly. It is necessary to build an MVP in a short period, yet it should include all the essential features in that early stage. It is then released to users and stakeholders to receive relevant judgments on it and improve it until it reaches the final stage. This allows a startup to realize if their idea works, without having to spend the whole budget and use up all the resources.
The MVP’s Intentions
Developing an MVP has the intention to keep the balance between what a startup wants to offer to the public and what users desire. The MVP allows a startup to receive useful feedback from users, identify the flaws/strengths of the product and use that information in the following iterations. The whole idea behind the MVP is to start building some before building all! The minimum viable product is a sort of a tester that shows if a startup is developing something useful to people!
How (Ex-)Startups Help Other Startups?
Launching a startup is a brave thing to do and not everyone has the guts for that. A startup is like a venture or a company that mostly focuses on a service or product that the founder is seeking to put out in the market. Initially, startups don’t always have a fully-developed business model and are most eager for finding investors to finance their ideas. One of the main things that startups tend to focus on in the beginning is developing an MVP. It takes time and effort to develop an MVP good enough to release to the public and to pitch the minimum viable product to investors.
In this case, a great solution to developing an MVP quickly and with the least number of resources is to ask for help from an ex-startup or even an existing one. Ex-startup companies have gone through all the same processes of developing an MVP, pitching their ideas to investors, using sufficient resources, planning, seeking feedback, etc. All these have made ex-startups successful and most importantly experienced.
Our company, Ptolemay, is also an ex-startup that has over time grown into this great company that now develops mobile applications and consults startups in the IT field. We are a mobile development company that mainly focuses on helping startups develop an app for their product/service by using all of our past experiences and put a lot of effort into using those to help new startups resolve their problems.
What are KPI and Investment Round?
The Key Performance Indicator (KPI) is a metric that describes how successfully a company accomplishes the key business objectives. Startups use KPI to assess their effectiveness in reaching organizational goals. Every company chooses different metrics to track depending on their targets and industries. When a startup chooses the right ones, they set themselves goals for some time and the KPIs evaluate how successfully the startup has been achieving its key objectives.
When KPIs are correctly established, they serve as a clear and analytical snapshot of the startup for potential investors to understand the current state of that company. Startups are good at tracking and achieving significant growth in their KPIs and show off their remarkable success to investors in the next investment rounds.
They do not raise tons of money at the beginning of their launch. Startups have to go through multiple investment rounds to finance their ideas. The investment rounds include pre-seed (selling just the idea), seed round (mostly for research and product development), and rounds A, B, C, and more. The following investment rounds take place when startups have some factual evidence of success and investors assess how previous capitals were used for further development, as they will be investing tens of millions of dollars in these rounds. Once a startup begins to succeed and expand, each following investment round serves as a foundation for future advances.
How Does the Help from Startups Influence KPIs Growth and How It Will Help in Next Investment Rounds?
When a startup asks for help from an ex-startup it is the same as a child asking for help from his parents. Ex-startups are more experienced, they know how the industry works and they will be most effective in the help developing an MVP. This will allow startups to meet the industry and identify its key objectives. Ex-startups can consult beginning companies, help them set and track relevant KPIs and give a brief look at how to pitch their idea to investors. With that said, startups will gain enough appropriate experience and information to develop an MVP, establish and track correct KPIs and be ready for the next investment round.