First of all, my apologies for the jargon, but this is a way to get attention of those corporate types who I hope to sell to. The MVP here in question is the startup-wala MVP (minimum viable product) and not the sports-wala MVP (most valuable player). There is no ambiguity to USP.
So it’s an accepted mantra in the startup world that product development should follow the “agile model” rather than the “waterfall model” (borrowing from software engineering paradigms). It is recommended that you put out a “minimum viable product” (MVP) out early into the market and get continuous feedback as you continue to hone your product. This way, you don’t end up wasting too much time building stuff the market doesn’t want, and can pivot (change direction to another product/service) if necessary.
The question is how “minimum” the “minimum viable product” should be. Let’s say that your business isn’t something that creates a new market but something that improves upon an existing product or service. In other words, you are building a business around “a better way of doing X” (it doesn’t matter here what X is).
The temptation in this case is to copy X and release it as your minimum viable product. This is rather easy to do, since you can just reverse engineer X, and put out a product quickly. That’s the quickest way to get to the market.
The problem with this approach, however, is that your initial set of users who experience your MVP will fail to see what the big deal about your product is – while they might hear your promises that this is only a start and you intend to do X in a “new improved way”, the first version as they see it shows no indication of this promise.
Worse, when your product is branded as a “new improved X”, it automatically gets anchored in your users’ minds with respect to X. Irrespective of what your product looks or feels like, once you’ve branded as a “new improved X”, comparisons to X are inevitable. And when your MVP is not very different from X, people might lose interest.
On the other hand, if you need to build in your USP into your MVP, it results in a longer product development cycle. In such cases, if the market doesn’t really want your “new improved X”, a lot more effort would have been expended, leading to higher risk (of market not accepting product).
Yet, if your MVP is nothing like what your “real product” is, then you are not really getting feedback from the market on your “real product” – only feedback on your MVP. And the MVP should be something such that you can make use of any feedback you get on it in terms of superior product design.