Product Life cycle:

over the past few months, I’ve had discussions with various investors, entrepreneurs, and others active in startup ecosystems about startup stages, terminology, and definitions frequently used in our industry — terms like MVP, product/market fit, and more. After spending nearly two years investing and mentoring tech startups and developing tech ecosystems and startup communities, my experience suggests that people active in that space are frequently using these terms because they need some way to explain what stage they are at, but they are actually still getting it wrong.

Just this morning I came across an article by Lean Startup consultant Dan Olsen titled “A Playbook for Achieving Product Market Fit.” This article made me curious because it claims to offer a guideline to achieve product/market fit, which is a big deal these days. However, as it turns out the article is actually an aggregation of wrongly applied terms leading up to advice which mixes up things to really get to product/market fit.

Explaining some terms about the Product Life cycle :

POC(Proof Of Concept)

In software development, proof of concept is a technical exercise to demonstrate that your idea is operationally feasible. Your proof of concept (POC) will be used to garner support from internal stakeholders but will not be seen by potential customers.

The POC should use minimal time and resources, and should only verify one part within the whole system. Therefore, you might have multiple POCs to test different components of your complete solution.

An example of a POC is verifying that two technologies can talk to each other — such as a demonstration of using a mobile phone app to open a barrier. That’s it. Functionality, performance, usability, scalability, etc. are not considered within the scope of proof of concept.

In short, POC is to show that an idea can be done. It is a ‘yes’ or ‘no’ answer — if the answer is no, production will not move forward and you will go back to the drawing board. If your proof of concept is successful, you can get initial buy-in from internal stakeholders and secure financing to build prototypes. If you are a solo entrepreneur, a POC can be useful in raising initial seed-stage funding.

It is not uncommon for non-technical entrepreneurs to consult with freelance software engineers to build a proof of concept. Once the feasibility of your concept is verified, you are ready to build a prototype.

prototype

The first iteration of your product or service may be a prototype, which is developed in order to test hypotheses and gain invaluable feedback, but represents a non-viable product from a customer’s perspective. Startups and entrepreneurs may use the prototype to test for the existence of a problem, people often also call it a ‘Vanity MVP’.

MVP

A Minimum Viable Product (MVP) is not a product startups can decide to launch; rather, the market tells you when you’ve reached your MVP. This is the most common problem when it comes to terminology, because entrepreneurs as well as investors are often talking about ‘launching or creating a MVP’, which is simply wrong. MVP is the stage of product development entrepreneurs could get to through the build-measure-learn cycle of the Lean Startup Methodology. In contrast to a prototype, a MVP needs to be a viable product or service to customers, so must include enough to get people using it and extracting value from it.

PMF

Product/Market Fit is achieved if the startup has found a repeatable, scalable model that drives demand. It is the stage after you’ve hit the MVP, and can be described as tuning the engine of your business by developing, selling and marketing your product, as well as building out the team and operations. The goal of the MVP is to create customers, the difference with product/market fit is that it involves measurement, learning and fine tuning, including actionable metrics which are not available before a MVP has been reached.