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What Is a Minimum Viable Product (MVP)?

Dawid Pacholczyk 3622ceab56

23/02/2022 |

9 min read

Dawid Pacholczyk

Take a look at any research study, and you'll see that roughly 10% of startups fail within one year from the founding. Why is that? Startups go down mostly because what they do doesn't really meet market needs. 

Doing some in-depth market research and starting product development with a Minimum Viable Product (MVP) is the best way to mitigate that risk. Successful startups use MVPs to gather feedback from potential customers early on, understand their unique selling proposition, and find product-market fit faster. 

But what exactly is an MVP and how do you develop it? What role does it play in reaching your business objectives? What are the most common pitfalls of the MVP development technique? 

Keep on reading this guide to learn everything you need to know about building a Minimum Viable Product – from its benefits and challenges to costs and development approaches.


Table of contents: 

  1. What is an MVP (Minimum Viable Product)?
  2. What is the difference between MVP and Proof of Concept (POC)?
  3. Minimum Viable Product: benefits and examples
  4. The future of MVP and software development

What is an MVP (Minimum Viable Product)?

The Minimum Viable Product is a concept from Eric Ries's seminal Lean Startup that has inspired hundreds, if not thousands, of startups around the world with its lean startup methodology. The book underscores the impact of learning during the development of a new product. 

An MVP is a product with limited functionality but enough value for the user, allowing the team to collect the maximum amount of validated learning about customers with the least effort possible.

What exactly does it mean? It's about understanding whether customers are actually willing to pay to use your product. 

The key premise behind the idea of a Minimum Viable Product is that you develop an actual product. It doesn't have to be more than a landing page or a service that appears to be automated but is actually manual behind the scenes. 

The idea is to offer something to customers and then observe how they behave when using a product or service. How are they reacting to it? Does the product help them solve an existing problem? Such insights are much more valuable than simply asking people what they would do or how they would react.

What's the goal of an MVP?

The purpose of an MVP is to enable you to test, refine, and launch products quickly to gain traction as soon as possible. To achieve that, an MVP needs to be small-scale, relatively simple, with a limited number of features and developed quickly. 

Selecting the features for an MVP carefully pays off. Remember that it needs to be a workable product that gives users a glimpse of the experience they would get with the full version. It can't be just a frame or sketch. 

That's why Minimum Viable Products need to include the core functionalities that bring value. Sure, it can be simple. But each feature you select should be reliable, usable, well-designed, and functional.

Why is building an MVP worth your time? 

The primary value of a Minimum Viable Product is that it allows you to build an early version of your product that already addresses your customers' needs. 

And at the same time, it reduces the risk involved in product development. The MVP development process allows you to understand the minimum requirements for your user base. Once you identify them, you can build and release a no-frills version of your product to get feedback and then refine it. 

This is the best example of continuous improvement and agility. An agile and minimal viable product not only leads to improving your product but also streamlines your team's workflow, saving you lots of money on future software development and maintenance.

Some of the most common reasons why companies use this approach to build their iterative process are: 

  • ability to get the product to market as quickly as possible,
  • validating a business idea with real customers before committing to full product development with a massive budget,
  • understanding what type of product or feature resonates best with customers.

What is the difference between MVP and Proof of Concept (POC)? 

At this point, let's emphasize once more that a Minimum Viable Product is not a prototype or a Proof of Concept

  • A prototype works like a draft version of the product to demonstrate its visual form and certain elements of MVP functionality. But at the end of the development process, prototypes are usually discarded or end up as part of the final product.
  • A Proof of Concept, on the other hand, it's more of an experiment that is usually carried out internally. It offers you a realistic glimpse into the potential of the project so you can understand its technical feasibility.

Companies often use POC to verify technical concepts behind different technology solutions like integrations, scalability, or availability.

Minimum Viable Product: benefits and examples

Examples of startups that started with an MVP

1. Dropbox

It's hard to believe that a money-related challenge inspired the file sharing and cloud storage company. Dropbox founders required funds to get started, but investors didn't understand the solution because trying it out wasn't an option. It was just too innovative. 

One of the founders created a video MVP that explained what Dropbox could do – and it worked wonders! 

2. Uber

Today a global leader in ridesharing and delivery services, Uber started out with the idea of ordering a taxi without a call center. The team built an MVP app that connected users to drivers by using GPS coordinates for pickup locations. 

The initial app only included a single feature, but it was so successful that Uber got its market validation and moved forward, becoming a real tech giant. 

3. Instagram

Instagram's MVP only allowed people to share square photos with a limited range of filters. Initially, the app was only released on iOS to reduce the development costs. It still worked, and Instagram's expansion over the past few years shows that starting with an MVP is a smart choice.

Key benefits of a Minimum Viable Product

1. Reducing development costs

An MVP allows you to verify the viability and desirability of your product before investing in a full-fledged version with all the key features and frills (like attractive graphic design). 

It also helps you optimize the time and costs that go into the agile development stage by helping you pinpoint problems early on before they snowball into massive issues that are expensive to solve.

2. Gaining traction on the market

A Minimum Viable Product also attracts early adopters who are willing to test out the product's first version. The product's initial users might become real evangelists who will share your product with their networks in the future. 

3. Finding product-market fit

An MVP offers you solid market proof and often leads to winning the first customers. It's a great thing to show potential investors – it demonstrates the potential of your product. Bringing a fully tested and validated product idea to the table will convince investors that supporting your business is a good idea.

4. Getting user feedback

You can quickly deliver value to end-users and collect important feedback thanks to an MVP, spending minimal upfront development costs. Releasing an MVP to the public is a smart move because you get to hear what customers think about it and quickly remove any features that aren't necessary to spend extra resources on them down the line. 

5. Testing early on for easier product development

Customer feedback opens the doors to discovering insights about customers' behavior or your market. That's how MVP development helps you to avoid making mistakes early. By catching any issues or misalignments early on, you can fix them faster.

You can also collect insights gained during the testing phase to plan future development stages more accurately. 

6. Developing a vision for your startup

MVPs also come in handy for developing a product vision that allows growth and expansion of the user base. An MVP gives you the option to pivot early, shift your focus, and change the core features of your app - only spending money on things it really needs to succeed. 

Common pitfalls of MVP development

1. Building an MVP without fully understanding its meaning

This lack of understanding often stems from putting the emphasis on the "minimal" part of the MVP. Teams may deliver the smallest amount of functionality as fast as possible without considering product viability. An MVP needs just enough functionality for it to be a viable source of learning. Some teams confuse an MVP with a minimum marketable feature or minimum marketable product.

2. Unclear goal for MVP development

Teams may become too focused on delivering an initial version of the product without considering how it's going to help them understand customer needs better. The risk is that the product delivered doesn't have sufficient features to satisfy early adopters and give you an accurate assessment of whether customers are really going to use it or not. 

3. Failing to implement feedback

Another mistake teams often make is getting feedback on the MVP and failing to make any further changes. This goes regardless of the kind of feedback they get. Sometimes they focus too much on the UI or high-quality clean code, forgetting about the primary purpose of the MVP.

4. Polishing MVP too much

An MVP needs just the core features and no frills. Adding anything else than the core functionalities will distract early users from doing what they're supposed to – smoothly following the product's path to complete a task. Measuring the potential success of your product in this scenario is more difficult.

5. Picking the wrong MVP testing method

Teams can choose from several MVP testing methodologies, and that choice should be dictated by the business model, audience, and product. You don't want to end up with software development going in the wrong direction and lose money.

The future of MVP and software development

Building a Minimum Viable Product is a smart move proven by the success of many companies that started out with a very simple concept. After testing it with the first users, these tech giants got plenty of valuable feedback and improved their products to get where they are today. 

The value of MVP to product development is undeniable. Investing in a digital product without checking its viability first is a mistake that leads to a startup's downfall. 

Are you planning to build an MVP? If so, get in touch with us. Our experts can support you at every step of the process – we have plenty of experience in assisting startups with MVP development, using best industry practices and years of experience gained across various sectors.

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Dawid Pacholczyk 3622ceab56

Dawid Pacholczyk

Consulting Manager at Codete with over 15 years of experience in the IT sector and a strong technical background. Seasoned in working with multinational companies. Ph.D. student and lecturer at Polish-Japanese Academy of IT, focused on software architecture, software development and management.

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