Minimum Viable Product (MVP)
Although Eric Ries didn’t originate the term its meaning is now generally taken to mean Eric’s use of it. A minimum viable product is a development technique in which a new product or website is developed with sufficient features to satisfy early adopters. The final, complete set of features is only designed and developed after considering feedback from the product’s initial users. MVPs in the Lean-Startup are:
MVPs Are Not Universally Applicable
The question is, what do you do when:
While it must be acknowledged that the details of functionality are rarely known well in advance, whether something will be of value or not should be in established companies. In other words, there are times when innovation of new products/services must be explored, where the value is not known. But most of the time the value of an advancement should be reasonably well known.
Minimum Business Increment (MBI)
In the situations where the value of an enhancement or new product/service is reasonably know, the concept of an Minimum Business Increment (MBI) is more useful. It focuses on the realization of business value quickly. It is not a reason to deliver less, it is a reason to deliver sooner.
An MBI is the smallest piece of functionality that can be delivered that has value to the business in that it:
MBIs are created by first determining who your target audience is. This target audience may be external or internal. Then, decide on the scenarios for this market for the business objective in question. Focus on the minimum business increment for the scenarios in question – and that becomes your MBIs. Very often you will commit to a series of MBIs as the desired functional implementation you want to do for an epic. By building and delivering them incrementally you get both value and feedback quicker – providing you an opportunity to pivot. Note that this business value should be based on what represents value for the business and its customers
Net Objectives uses the concept of the MBI to be used in established companies. While conceptually similar to MVPs, they are more about the quick realization of business value than the discovery of what will be of value (although one must always be attending to this).
Value of MBIs
MBIs serve several purposes:
Examples of MBIs
It must be remembered that these are Minimum Business Increments. The value realized may be for the business, not a customer. This does not just include paying down technical debt or Lean-Agile Transformations. In product companies that are based on platforms, it could be improvements to the platforms.
“MBI thinking” means to attend, at all levels of the organization, to how we can realize value faster. Where MBIs are first defined this means what are the minimum chunks of business value that can be realized. But then, as the MBIs are decomposed into features and stories, the features’ and stories’ scope is limited to that of the MBI. This means we only build what we need to realize value.
This markedly contrasts with most Agile decomposition methods of starting with epics and then pulling the most important features out of the epics. While this does limit scope, the features are often built fully scoped, instead of limiting them to a more focused target audience or purpose.
MBI thinking can also help manage WIP.
Note: If you are a premium content member you can get an example of this at the MBI Thinking Example.
Using MVPs and MBIs Together
In a nutshell, we are suggesting to use MVPs when you are trying to discover if something is of value. MVPs are therefore used for innovation type products. MBIs, on the other hand, are increments of value to be realized. We should have a good sense of what this value is before even starting the MBI. If we don’t, we may want to start off with an MVP and then move to MBIs.
The bottom line of this difference should also be reflected in how MVPs and MBIs are funded. An MVP, by definition, should be funded for the value of discovery. After it is built the decision to continue, pivot or stop should be made. MBIs, however, need to be fully funded (remember an MBI is the minimum business increment) so this may not be much funding.
It’s also possible that an MVP is not intended for a full release but to a limited audience to determine its viability.
Another reason to make a distrinction between MVPs and MBIs is to avoid the use of overloading the terms where MVP sometimes mean the first one for discovery with other ones not being MVPs by definition but still using the term. Overloading or using terms that aren’t natural causes confusion. In addition, the words viable & product in MVP do not apply everywhere.
(Thanks to Steve Edwards for comments that led to this section).
To learn more
Watch Introduction to Minimum Business Increments (15 minute video).
Read More Insights on Epics vs. Minimum Business Increments, our short article The Business Case for Agility (PDF) or the more in depth chapter from our book Lean-Agile Software Development on the Business Case for Agility.
Release Planning in Seven Minutes: Pareto vs. Parkinsons (Video). How the big picture and focusing on what really matters overcomes challenges in release planning. Pareto wins over Parkinsons!