What is an MVP for Startups and Businesses?

An MVP software development is a key strategy for startups because it allows them to introduce their product to the public, gain an audience, reduce costs, and attract investors.

So, what is MVP in software development, and why does it matter?

Startups face a high failure rate, with up to 90% not making it. About 10% of startups fail within their first year, and up to 70% don’t survive between their second and fifth years. The main reasons for these failures include:

• Misunderstood or under-researched market needs (about 40%)
• Running out of money (30%)
• Stronger competitors (20%)
• Problems with marketing, pricing, and design (10%)

In this article, we’ll explore what an MVP is and provide guidance on the entire MVP development process to give you a behind-the-scenes look.

As a software development team with multiple MVPs behind our backs and over $300 M+ in funding raised with the help of our MVP development services, we have some useful insights to share.

MVP for Startups (and in Software Development)

• What MVP is: MVP is the simplest working version of your product that includes just enough features to satisfy early adopters and collect feedback. This is a core Lean Startup practice used to validate a business idea quickly and on a budget.
• Why build an MVP: MVP software development helps mitigate common causes of startups failing, such as misreading market needs, running out of cash, or underestimating competitors.
• How it differs from PoC & Prototype: A PoC proves technical feasibility, a Prototype explores look/feel and flows. An MVP is a functional product with only must-have features released to real users.
• MVP functionality: Focus on core functionality, early feedback, quick iterations, market validation, and design with scalability in mind.
• How to build (high level):
  1. Define the problem & value proposition and research users.
  2. List potential features and prioritize (such as MoSCoW, Kano, Value-vs-Effort).
  3. Set the smallest viable scope.
  4. Launch, gather early feedback, and iterate.
• What success looks like at the MVP stage: Evidence of problem–solution fit via real user feedback and traction signals (activation, retention, willingness to pay), plus a clear roadmap for the next iteration. 

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What Is A Minimum Viable Product (MVP)?

In the context of startups, an MVP is the simplest version of a new product that includes only the essential features needed to satisfy early adopters and gather valuable feedback for future development.

The goal of MVP is to validate a product idea quickly and cost-effectively before investing significant resources in building a full-featured product.

Instead of perfecting a product in a vacuum for months or years, an MVP approach focuses on building an initial prototype designed to validate or invalidate your riskiest assumptions and collect the maximum amount of early feedback for valuable insights.

Creating an MVP app allows a business to identify the strong and weak points of its business model with the least effort and minimal financial losses.

It also allows a company to test the market and see if customers would be willing to pay for and are interested in their product.

Key Characteristics Of An MVP

There are specific characteristics that differentiate an MVP from a fully developed product. These include:

Core functionality

The MVP contains only the must-have features that address the main problem or need of the target audience.

Early User Feedback

The primary goal of an MVP is to test assumptions, gather user feedback as early as possible to validate market demand. A complete product, in its turn, focuses on scaling and user retention, as well as monetization.

Minimal Design

An MVP often has a basic, functional design to validate the idea, while a mature product typically has a polished, user-friendly interface.

Iterative Improvement

Based on early customer feedback, the product is refined and expanded in subsequent versions. That way, you can be sure that development is fully aligned with actual market needs.

Risk Reduction

Launching an MVP helps minimize the risk of building a product that the market does not want. This saves time and resources.

Limited Scalability

An MVP may not be optimized for large-scale usage, whereas a full product is built with scalability, performance, and security in mind.

Lower Development Cost & Time

Building an MVP requires fewer resources than a fully developed product, which undergoes extensive development, then rigorous testing, and ongoing optimization.

MVP Software Development Vs. PoC Vs. Prototype

Building a product often involves multiple stages, each with its own purpose and approach.

You need to understand the difference between Proof of Concept (PoC) vs Prototype vs MVP. Let’s see what each of them means.

An MVP is a fully working product with only the bare essentials. Its main goal is to validate the product idea with real users and test market demand.

For example, Spotify launched as an invite-only app with basic features like music streaming. MVP allowed them to get user feedback and add more features based on that feedback.

A PoC is a small project to test if a specific concept or technology can be implemented.

This is not for user release, but an internal validation tool. For example, a team developing a medical billing software might create a PoC to test the security and efficiency of their proposed method before committing to full production.

A prototype is an early version of the product to visualize and test the design and functionality.

There are many types of prototypes, from simple sketches to interactive digital models, but they are not fully working products. They help teams to explore design and user interactions.

At different stages of the product development, each one is important as it helps reduce risks and make sure the final product meets the user’s needs.

MVP, Proof Of Concept (PoC), And Prototype
Aspect	MVP	Proof of Concept	Prototype
Purpose	Validate product ideas and market demand with real users	Demonstrate the feasibility of a specific concept or technology	Visualize and test the design and user interactions
Scope	Core features necessary to solve the primary problem	Focused on proving a specific aspect of the project	Simulates look and feel, may not include full functionality
Audience	Early adopters and real users	Internal team and stakeholders	Internal team and selected users for feedback
Development stage	Early stages, post-concept validation	Pre-development, concept validation	Pre-development, design exploration
Functionality	Fully functional with essential features	Limited functionality, just enough to prove the feasibility	Varies, from non-functional mockups to interactive models
Outcome	User feedback for iteration and market validation	Decision on whether the concept is viable	Insights into design usability and functionality
Time and Cost	Moderate to high, depending on the complexity of core features	Low to moderate, focused on a specific aspect	Low to moderate, focused on user experience

Why Do You Need An MVP?

Is an MVP an essential stage of product development? As specialists in software development and business optimization, our answer is YES, it is.

Suppose a founder wants to launch a pet care app but is unsure which features pet owners value most. Instead of building a fully-featured app, the team creates an MVP with basic features like pet profiles, a calendar, and a vet search. Simple, yet functional product.

Then, they invite early users and ask them to check the platform and say what they think about it. User input is crucial at this early stage as it can help to move in the right direction in terms of features and usability. For example, users said they need social features like photo sharing. The startup then iterates, adding these features and refining the app based on both business objectives and real user needs.

A similar approach was taken by one of our clients. This is a B2C platform that connects pet owners with dog walkers. At the pre-seed stage, the client aimed to expand their user base and monetize the product. Instead of building everything at once, we focused on the most essential features.

Our team stepped in to develop a clean and functional MVP that included Google Maps integration to track dog walkers, a user-friendly calendar for scheduling walks, and a robust messaging system with image and video sharing.

These features allowed the client to test the market and gradually enhance the platform based on real feedback, just like the Lean Startup methodology suggests.

The Pros Of An MVP Development

An MVP is a relatively cheap and fast way to ensure you create a worthwhile product based on customer research and market testing. The secret to budget-saving is to focus on a particular pain. When you do this, you receive the following benefits:

Minimizes spending

Simple business logic means easy development, and the money you save can be put towards promoting your product.

Helps validate your idea

Before starting the development process, a company must undertake in-depth market research, but a successful MVP allows you to validate the strength of your product continually.

Increases the speed of adaptation

Fast changes are the most substantial point for any MVP development. They allow for quick adaptation and flexibility to make sure the product is something consumers both need and love.

An MVP also allows you to keep refining your product through constant feedback, helping you maintain your customers’ attention over time.

As Thomas Edison said, “I have not failed. I’ve just found 10,000 ways that won’t work.” It is the spirit of an MVP, if you ask me.

MVP Software Development Process

A study from Startup Genome highlights that startups that validate assumptions with MVPs are about 20% more likely to survive their first five years compared to those that do not use MVPs. So, how do you start building one? Here is how our team approaches MVP development (keep in mind this is a bit generic outline, as we tailor the process to the specific needs of our clients and the industry they operate in):

Step 1: Define The Problem

We start off MVP development by identifying the problem the product solves. It is a crucial step that, when neglected, can lead to business failure.

Before starting MVP software development, we are working with the client team to conduct market research and define a strong value proposition that includes three key elements:

1. A specific audience with a specific need.
2. How will your product address that need?
3. The benefits the audience will gain.

To achieve this, we gather insights through thorough research, which typically includes:

• Market research. Analyze the market size and trends and identify target customer demographics, preferences, and pain points.
• Customer interviews and surveys. Directly ask potential users about their challenges, needs, and opinions on existing solutions.
• Focus groups. Understand how real people interact with the product concept. Explore their user stories, needs, expectations, and first impressions. Gather honest feedback through discussions with a small, diverse group of potential customers.
• Online polls and social media engagement. We use these sources to gather feedback on public interest and trends related to your product idea.

Then, we move on to the target audience analysis.

Step 2. Identify Target Audience

My product is great for everyone! I target all people around the world!

This is something you will never hear when building an MVP, simply because you can’t target everyone.

That is why we narrow down the core audience, identifying their needs, problems, buying capabilities, interests, and other features.

All this data will help us create a product that people will more likely buy.

The result of this stage is a portrait of your average product consumer.

Step 3. Map Out Core Features

Before starting actual development, we identify the main features that will form the core of the client’s minimum viable product.

We create a list of essential features and prioritize them.

An MVP typically includes only the most necessary functions, as it serves as the backbone of your product. We clearly define these core features and make a list of additional features to be added later.

Think of MVP development like baking. First, you make a cupcake. This cupcake is your MVP — simple but complete and enjoyable on its own. Next, you bake a regular cake, adding more layers and decoration based on feedback from the cupcake. Finally, you create the wedding cake, a fully developed product with all the desired features and designs.

You test and improve each stage by starting small and building up. This way, the final product will meet everyone’s expectations.

To choose the most essential features, we brainstorm all the features that could potentially make your product better, then categorize them to understand which ones are truly essential. Here are a few frameworks that might be helpful:

• MoSCoW method: Classify features as Must-Have, Should-Have, Could-Have, and Won’t-Have (for now). Only Must-Have features should be included in the MVP.
• Kano model: Group features into Basic Needs (essential), Performance Needs (enhance experience), and Excitement Needs (delight users but not expected).
• Feature buckets: Sort features into Customer Requests, Metric Movers (impact key metrics), and Delighters (unexpected but appreciated).

What Should You Plan Before Coding Begins?

Gather the development team. One of the most important things at this stage lies in supporting each other and exchanging expertise. A strong team is also one of the main requirements for a venture capital fund.

To do so, you need to collect your business and technical requirements, then prioritize them before beginning the development process. Before making a hiring decision, explore the cost of hiring a software developer and what factors to consider.

As personal advice, do not assume an easy-looking plan will be easy to follow. Often, the more detail, the better to help keep disciplined and on track. Remember, an MVP is only the first step to building a successful app.

Step 4. Development And Design

During this stage of MVP development, the goal is to build and create the essential features identified earlier.

This starts with user interface design services. Designers create a simple and intuitive user interface that provides a good experience with just the necessary functionalities.

Developers then choose MVP tools and focus on implementing these core features so that they work well and meet the primary needs of the target audience.

It’s important to ensure the product is easy to use and navigate, so usability testing is conducted to spot any issues. This way, the MVP can evolve to better meet user needs while staying focused on its core purpose.

Whether you’re a startup or a seasoned pro, this guide on MVP design will save you time and money.

Step 5. Collect User Feedback And Iterate

Once all the essential elements of the product are developed and tested, it is time to launch it to the selected number of users.

For example, you can label features as ‘beta’ on your screens and encourage user feedback through visible mechanisms like a feedback button. Besides in-app surveys, you can also gather feedback on social media and via direct emails.

It is recommended that users use free-form surveys, in which they can share which features they dislike and suggest ones they want instead. Responding to this feedback builds trust and loyalty among early adopters.

Analytics tools are also helpful. They track user behavior and engagement, providing insights into how users interact with your MVP and guiding its development.

What’s The Average Cost Of Developing An MVP?

Now that we’ve looked at MVP software development, let’s talk about the cost and time it takes to build an MVP.

The cost of developing an MVP can vary significantly based on the project complexity, location of the development team, and features required.

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Factors Influencing MVP Software Development Cost

1. Features complexity. Simple MVPs cost less, while complex ones with advanced functionalities increase the budget.
2. Development team location. Hiring a team in a region with lower living costs, such as Eastern Europe or Asia, can be more cost-effective. To learn more about top IT outsourcing destinations, check out this article, where we outline the 10 best countries to outsource software development.
3. Design and user interface. Investing in a well-designed, user-friendly interface is crucial for user engagement and can affect the overall cost.
4. Development time. The duration of the development process directly impacts the cost. Efficient project management helps keep timelines and costs in check.
5. Technology stack. The choice of tech stack can influence the cost, especially if specialized skills are required.
6. Additional services. Project management, lean startup methodology, quality assurance, and post-launch support also contribute to the overall cost.

Check out the full MVP development pricing breakdown. We also include a QA engineer, UI/UX designer, and project manager in our estimations.

They support steady day-to-day work and ensure quality throughout the product development lifecycle. In this way, our team and the client are able to communicate effectively.

Typically, the project duration from the product discovery phase to release is about three to six months, considering one back-end and one front-end developer.

Common Challenges Of MVP in Software Development

The core purpose of an MVP development for startups is validated learning, not perfection. The biggest challenge I see is a mindset shift: from building a complete product to running a disciplined experiment. Here are some other common challenges we face in startup MVP development:

Challenge Category	Specific Challenge	Description & Common Causes
Scope & strategy	Feature creep (“Just one more feature…”)	Continuously adding features beyond the core value proposition. Often happens due to stakeholder pressure or fear of competition. This bloats the MVP and delays launch.
	Unclear or misaligned vision	The team, stakeholders, and product managers have different interpretations of what the MVP should be and what success looks like.
Technical execution	Over-engineering the solution	When the team builds a scalable, “future-proof” architecture for a product that hasn’t yet been validated. This wastes time and resources.
	Neglecting non-functional requirements	Ignoring performance, security, or usability to ship faster. Then, you end up with a product that is too slow and frustrating to use.
	Technical debt	Taking shortcuts to meet deadlines. This leads to a codebase that is difficult to maintain and scale later.
User & market focus	Building for everyone (No target user)	The company ends up with a product that doesn’t deeply resonate with any specific user segment.
	Insufficient customer feedback & validation	Launching the MVP but not having a process to collect and act on user feedback. This literally defeats the primary purpose of the MVP.
Team & process	Poor team communication & collaboration	Silos between developers, designers, and product managers lead to misunderstandings, rework, and delays.
	Misinterpretation of “Minimum”	The development team builds something too minimal that isn’t “viable,” or stakeholders expect a fully-featured product.
Business & resources	Running out of resources (Time/Budget)	Underestimating the effort required leads to a rushed or even cancelled MVP before any learning can occur.
	Lack of a go-to-market plan	Assuming “if we build it, they will come.”

These are widespread pitfalls that many startups deal with during MVP for software development. Unfortunately, there is no one-size-fits-all solution for those challenges, and you need a reliable tech partner to deal with them.

What Comes After An MVP?

After developing and releasing a minimum viable product, the next key step is to move toward creating a Minimum Marketable Product (MMP), sometimes also called a Minimum Marketable Release (MMR).

MVP focuses on validating the core idea and testing product-market fit with early adopters. The MMP, in its turn, aims to prepare the product for a broader market with higher expectations. This involves improving quality, adding essential features, ensuring readiness for wider adoption, and tracking key success metrics.

So, here are the next steps that come after MVP development:

Track Key Metrics

It’s very important to choose the correct metrics of measurement since there is no standard. This approach depends on your business model. For example, the SaaS product of an MVP is based on the following metrics:

• The lifetime value of a customer.
• Cost of acquisition of a customer.
• Churn rate.

Tracking key marketing objectives like customer retention and churn rate is essential. Keep in mind that the wrong choice of metrics could lead you to follow the wrong vector of development.

Use the data and user feedback collected during the MVP phase to assess whether the product solves real customer problems and if users are willing to pay for it.

If the MVP is not viable, you may need to pivot or return to concept development. If viable, proceed to enhance the product.

Develop the Minimum Marketable Product (MMP)

The MMP includes more refined features and a better user experience to appeal to a larger market beyond early adopters. It is more polished, stable, and ready to generate revenue. This stage bridges the gap between a barebones MVP and a fully scaled product.

Based on user insights, prioritize which features will add the most value and improve the product. This involves balancing new feature development with improving existing functionality and fixing issues.

Build a Product Roadmap for Growth

Plan the strategic development of the product, including scaling infrastructure, expanding features, and adapting to market trends. This roadmap guides the transition from MMP to a full-scale product.

After the MMP, focus on scaling the product for a wider audience, ensuring it can handle increased demand, and continuously adapting to evolving user needs and market conditions.

Next Steps

A minimum viable product software development is an ideal starting point for any aspiring entrepreneur. There is no need to add the maximum amount of features from the very beginning. Instead, it is better to conduct market research, explore various user stories, and create an initial version of a product that people really need. This approach is actionable for both non-technical and tech companies.

Here are three reasons to make an MVP your first move when launching a startup:

• Test assumptions with real users to gain invaluable early feedback, especially as a first-timer. Quickly validate if your vision truly resonates before going all in.
• Enable smart money management. Score proof-of-concept without overspending upfront. Pivoting based on an inexpensive MVP can steer you away from wasting precious capital.
• Simplicity and laser focus delight users. Solve one pressing problem extremely well. Complexity can come later once initial traction is achieved.

While an MVP sets you on the right trajectory, remember it’s only step one.

Carefully plan budgets and milestones over time. Launching an MVP marks the start of the journey, not the destination.

Eager to start bringing your big ideas to life? 

Contact our team to explore how our MVP development and product discovery services can guide you in launching your breakthrough digital venture.