Defining Your Value Proposition

Start Here: What Are You Actually Testing?

Before listing features, articulate what needs to be true for your business to work.

MVP vs Prototype vs Market-Ready: What You're Actually Building

Most founders confuse these. Here's what they actually mean.

Numbers here may vary. Building an MVP of step's counter app does not cost $50k. But MVP of Facebook cost more. It's based on hourly rates in Eastern Europe, not in US.

Prototype ($5K, 2-3 weeks)

What it is:

• Tests if the concept makes sense
• NOT sellable to customers
• Held together with duct tape and manual processes
• Used for user research and concept validation

Examples:

• Clickable Figma mockups that look real
• Wizard of Oz (you manually fulfill what looks automated)
• Landing page + email signup to test demand
• Manual concierge service before automation

What you can learn:

• Do people understand the concept?
• Would they pay for this?
• What features matter most?
• Is the UI/UX intuitive?

What you can't learn:

• Technical feasibility at scale
• Real user behavior over time
• Actual conversion rates

MVP ($20K-50K, 2-4 months)

It actually works. Not perfect, but functional.

Examples:

• Airbnb v1: Founders' apartment, personal camera photos, manual PayPal payments
• Instagram v1: Photo upload, filters, feed (no video, stories, DMs, comments initially)
• Dropbox v1: Basic sync, one folder, Windows only

What you can learn:

• Will people actually pay?
• Do they use it repeatedly?
• What's the real conversion funnel?
• What features drive retention?

What you sacrifice:

• Polish and beauty
• Edge cases and error handling
• Scalability beyond first 1000 users
• Features competitors have

Critical distinction: MVP has real customers paying real money. Prototype doesn't.

Market-Ready ($60K-150K, 4-8 months)

What it is:

• Competes directly with existing solutions
• Polished user experience
• Handles edge cases gracefully
• Ready for paid marketing at scale

Examples:

• Products you see on Product Hunt
• Apps that compete with established players
• SaaS tools marketing to enterprises

When you need this:

• After MVP proves product-market fit
• When you have revenue to invest
• When competing in crowded market
• When targeting skeptical buyers

Critical mistake: Most founders think they need Market-Ready for launch. They most often need MVP.

Decision Tree: What Should You Build?

Do you have paying customers already?

• Yes → Skip prototype, build MVP or Market-Ready
• No → Keep reading

Is your concept brand new (no competitors)?

• Yes → Start with Prototype (test if people understand it)
• No → Skip to MVP

Do you have $20K+ budget?

• Yes → Build MVP
• No → Build Prototype, get customers, raise money, then build MVP

Are you in a crowded market?

• Yes + Have $60K+ → Consider Market-Ready
• Yes + Have $20-50K → MVP with excellent UX in core features
• No → MVP is fine

Minimal MVP vs Full-Featured "MVP"

Minimal MVP Approach

What it includes:

• Only core features addressing massive pain points
• Functional but not beautiful design
• Basic onboarding
• Essential user data collection
• May exclude advanced analytics
• May exclude detailed purchase tracking

Goal: Spend minimal money to validate if anyone needs this product

Full-Featured "MVP" Approach

What it includes:

• Dozens of features
• Market-ready design and polish
• Ready to scale for tens of thousands of users
• Advanced features and integrations
• Sometimes even includes SLA requirements and data center specifications

Goal: Go all-in and build a great product before showing it to the market

Recommendation

Don't use the term "MVP" assuming it means cheaper or faster. Instead, clearly communicate your actual goals:

• "I want to spend a small amount to validate if users need this"
• "I want to build a polished, market-ready product from day one"

This prevents miscommunication and misaligned expectations.

The Two Scoping Paths

Path 1: Fast Validation MVP ($20K-40K, 2-3 months)

Choose this if:

• Testing product-market fit
• Need to validate demand quickly
• Want to run ads/marketing tests
• Have limited budget
• First-time founder or unproven market

Strategy: Reuse everything possible

Examples:

• Mobile app testing conversion through ads
• SaaS platform to validate with existing network
• Marketplace testing supply/demand dynamics

Trade-off: Less defensible, easier to copy

Why it works: Speed matters more than perfection when you're learning

Path 2: Platform/Differentiation MVP ($50K-80K+, 4-6+ months)

Choose this if:

• Building unique technology that IS your moat (defensible competitive advantage)
• Have resources and proven market

Strategy: Build custom where it matters

Examples:

• Recommendation algorithms
• Proprietary matching systems
• Unique data processing
• Novel UX patterns

Trade-off: Higher cost, longer timeline

Path Selection Scorecard

Score each question 1-5:

Total score:

• 5-15: Path 1 (Fast Validation)
• 16-20: Either path works, depends on goals
• 21-25: Path 2 (Differentiation) might be justified

Reality check: 80% of founders should choose Path 1.

Feature Cutting: From 14 Features to 3

Often founders want to build too many features in MVP. Here's how to cut ruthlessly.

The 3-Question Filter

Apply to every feature:

Question 1: Can users accomplish their core goal without this?

• Yes → Defer to post-MVP
• No → Continue to Q2

Question 2: Can we fake this manually for first 10-50 customers?

• Yes → Use Wizard of Oz approach*, defer building
• No → Continue to Q3

Question 3: Does this test a risky assumption?

• Yes → Build it
• No → Defer to post-MVP

*Wizard of Oz approach - users interact with what seems like a fully functional system, but parts (or all) of it are actually operated manually behind the scenes by humans.