The SaaS founder’s guide to everything MVP

Summary
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‍The idea of MVP has evolved significantly over the past two decades since it was first introduced. At the heart of the MVP conversation is the customer. Successful MVP journeys involve multiple rounds of conversations, understanding requirements, and delivering impactful products. There are indicators that founders can rely on to see if they have reached MVP, and eventually PMF. 

The SaaS founder’s guide to everything MVP

The minimum viable product. A concept introduced only as recently as 2001, but one that has become the sort of Holy Grail that entrepreneurs want to find in the early stages of their business. 

And even as they work towards their MVP, business leaders often find that there is no tangible way to understand the concept. You just have to, to quote a cliche, learn on the job. The thing about MVP is that you may find a definition to follow, but as you build deeper and bigger, you’ll find it is a parameter that evolves constantly. With businesses now planning to be global from inception, things have become even more fuzzy.

We spoke to Rohit Agarwal, co-founder of Portkey.ai — which allows companies to develop, maintain and iterate over their generative AI apps and features faster — to understand how early-stage and first-time founders should approach MVP, and why it matters. 

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The MVP evolution
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The idea of MVP has evolved over the years. In a nutshell, this is how Rohit summarises it:

1. Build everything for a single customer: The initial idea of MVP was to build with one customer, see if things work, and offer services on top. Frank Robinson, who first talked about MVP, called it a “product with maximum RoI divided by risk”.
2. The Lean Startup: Then came Eric Reis’s book, The Lean Startup, which popularised it. The idea here was to build the most minimal thing so that testing and iterating could be done faster. 
3. Build novel: The idea of MVP evolved to say that in order to penetrate an existing market, companies should aim to build a novel feature. 

Portkey is Rohit’s second entrepreneurial outing. He had earlier co-founded Framebench, a real-time visual review application, which was acquired by Freshdesk. So his approach to MVP this time around was different. The way I did it this time was having a core thesis and testing it out.
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"The idea is to find out what the market really needs. That thesis becomes the core of your MVP." - Rohit. 
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Think of it as testing out the flavours and complexities of making a wedding cake by testing out everything with the smallest form factor: a cupcake. Perfect the combinations as you go along.

‍However, founders often warn against feature creep in the MVP stage. This is when customers keep asking for new features and you keep building. But how does one know which features or customer feedback are taking the MVP forward?
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Rohit has three main factors to make the decision:

1. Customer conversations 
2. The founder’s gut feel 
3. Data

Building the nuances 
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There is something more basic that founders often ask. How do they identify if they’ve reached their MVP?  

• The Jobs-to-be-done framework: Here, you identify an administrator or end user persona, and create the jobs they need to do. These jobs should be in line with the hypothesis the founder is trying to test. 
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  This is ‌done through a lot of customer interviews with a focus on understanding what they do, what they miss, and what are some of their problem statements. “The real problems may lie a little beneath the surface,” - Rohit.
  
  And then you pick the most valuable tasks out of those. “That is what you create an MVP around,” Rohit adds. 
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• Build a wireframe: Once they understand these basic nuances, founders should focus on creating wireframes. These are high-level visualisations of your product. Customers then give feedback on the wireframe. 
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  “Counterintuitively, I have never found that customers give you a lot of great feedback on wireframes. Because I feel they're not invested enough in the product,” says Rohit. 
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  The better idea is to go deeper into the conversation about understanding customers’ pain points and addressing those.‌ Ultimately, you have to build a product the customer will pay for.
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• ‍Have a builder’s mindset: For many founders, building a product is the first course of action. Rohit says it may not be a bad thing. He has a build-first mindset too. 
  
  Portkey, for example, integrates with multiple AI providers. Rohit knew that integrating with all of them from the beginning would take a long time. So, in an early beta test, the Portkey team put up logos of all ten AI providers they wanted to onboard. The interest to sign up for a specific provider guided the next build. “It helped because we at least found out what was really working. I think doing these small build ideas gives people a real sense of what they need,” he adds.

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Pilots: free or paid?
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A good test to know whether your MVP is working for the customers is if they get angry when the product doesn’t work or goes down for some time. “That is the mark where you know what people really value,” says Rohit. 

But an increasingly asked question is about how to roll out pilots at the MVP stage—free trials or paid pilots? For Rohit,  the decision depends on the business model strategy. 

• Market grab: If you have a market grab strategy, much like Dropbox, a free trial makes more sense. Customers can get a sense of the utility of your product, and you can eventually begin charging for upgrades. 
• Customer mindshare grab: For most SaaS businesses, it is most important to understand the mind of the customer. Rohit says charging even a small amount from the customer at the MVP stage ensures better feedback. “People are a lot more measured in the feedback they give because ultimately, this is something they will be paying for,” he explains. 
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The time and money question

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‍Every business is different. The needs it serves are different. But is there a time frame founders can set aside for reaching the MVP? Do founders need to earmark the funds they want to invest in finding the MVP?

There are no “ideal” timelines or monetary cutoffs, says Rohit. But MVP and PMF are undeniably linked to each other. For most SaaS businesses, the time to reach PMF is between 6 and 18 months. This means your MVP should have a shape within that time frame in terms of investment,

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“A firm’s pre-seed and seed investments should get you to that PMF stage and should start giving you significant flywheels.” - Rohit
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The best way to avoid a situation where you find yourself scrambling for funds before reaching your MVP, Rohit recommends having internal reviews at different frequencies: 

• Weekly reviews to understand micro directions.
• Monthly reviews to understand and review major decisions. 
• Quarterly review for a broader discussion with mentors, investors and angel investors. They help you see the big picture.

To sum it up, you have an MVP when you feel a pull from the market, and you find customers get impatient when you don’t ship new features fast. 
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“These are good signals for you to understand that you are providing value, and have created a dependency. Now you can expand either the market or the product, or both," he signs off.