What Does MVP Mean in Software Development & Why Do You Need It?

Anna Hmara
Anna Hmara
Senior Technical Writer
Andrey Onopriyenko
Andrey Onopriyenko
Chief Technology Officer

In the modern world, it is hard to meet someone who has not heard of Instagram. But this popular social network might not exist if its developers had not released an MVP on the market in due time. This step allowed them to create a concept for a successful product because the MVP in software development is irreplaceable.

The initial app was on the verge of failure, but the analysis of the application's activity made it possible to determine what users wanted the most. That is how this top-rated social network arose. This article will talk about what a minimum viable product is and why it's so crucial to a startup's success.

Table of contents

    What is a Minimum Viable Product (MVP)?

    A minimum viable product (MVP) is an approach used to develop a new product with minimum functionality required to meet the target audience’s needs. It is used to collect feedback from users and assess the market's demand for a business idea.

    The concept of MVP is to create a simple yet complete product that will interest customers. It is used to monitor customer behavior to build further development strategies. MVP is a cheap and effective way to comprehensively assess market demand. — Andrey Onoprienko, CTO, KeyUA

    A minimum viable product or MVP is a unique product that minimizes the return on risk for both the customer and the service provider. The concept gained particular popularity in 2009 after the release of the book "Lean Startup" written by Eric Rees, which talked about quickly testing ideas and choosing the right business model.

    minimum viable product definition

    So, what is an MVP in software development? It is a web, mobile, or desktop application with a simple set of functions aimed at getting maximum feedback from the target audience. Its main goal is to test the market and understand what users need and what functionality is redundant. It is a light version of the software, not a crude product made up in a hurry.

    Did you know that a full-stack developer is an excellent choice for building a top-notch MVP?

    Hire developers

    Why Should I Build a Minimum Viable Product?

    CBInsights collected 20 main reasons why startups fail. At 42%, inconsistency with the market needs, including a lack of understanding of the target audience, took the top spot. This is something that can be avoided by building a minimum viable product.

    Source: CB Insights

    In software development, MVP is a way to assess market needs with minimal investment. If a key idea does not work correctly or does not meet users’ needs, there is no point in building additional functionality. 

    Importance of MVP development:

    • Building an MVP for startups is cost-effective. You spend money only on creating the basic functionality, avoiding budget overrun.
    • Get feedback from customers. You can better understand what users really need, which means that you get the opportunity to create a genuinely in-demand product.
    • Find an effective monetization strategy. The idea of how your product will generate revenue must be realized even before the software is built. MVP is an excellent opportunity to make a strategic decision.
    • Testing ideas. You can find out which direction of development will be the most optimal.
    • Get to know your target audience better. This way, you can build a base of potential customers and find early adopters of your product.

    Building an MVP is an opportunity to competently distribute the budget and create exactly the product that will be of interest to the target audience. An MVP lets you unleash the company's potential even in the early stages of product development. — Andrey Onoprienko, CTO, KeyUA

    MVP vs. POC vs. Prototype

    mvp vs poc vs prototype

    Quite often, people confuse proof of concept (POC), prototype, and MVP concept. However, the difference between them is colossal. An MVP is not a prototype or POC. 

    A proof of concept is the implementation of the fundamental part of the system for the internal needs of a company. It will not be launched on the market since its main task is to test whether the theory can be implemented in practice. A proof of concept is created in no time, so the project’s usability is largely ignored.

    A prototype is an interactive model of the final product that reflects information about design or navigation received from stakeholders. This makes the development process more fruitful and cost-effective. If the POC demonstrates that the concept can be implemented, the prototype shows how it can be done. In general, it gives an idea of the design and layout of the application. 

    As we said, the minimum viable product for software development is a simple version of a web, desktop, or mobile application. But the prototype largely affects its creation. These models work together to hit the market and deliver successful products.

    Learn more about the difference between MVP, PoC, and prototype and how they can be implemented.

    4 Basic Types of an MVP

    When it comes to MVP in software development, there are 4 main types. At the same time, during product building, you can combine various types depending on the needs of the business.

    • Wizard of OZ MVP. This type is suitable if you plan to create an advanced product using complex technologies. For example, let's take an AI-powered data processing application. The creation of such a product is an expensive and time-consuming process. When building an MVP in a startup, you create only the basic functionality without using AI and process all the data manually. But clients should not know about it. They must think that all processes are automated. Example: Zappos, the largest online shoe store.
    • Concierge MVP. This type is characterized by the fact that you lead users all the way through their interaction with the product, and unlike the WoZ MVP, they know about it. This implementation method allows you to find out about users' problem areas and find effective ways to solve them. Example: Rent the Runway designer clothes rental service.
    • Piecemeal MVP. This type allows you to create a product based on third-party tools and using minimal resources. For example, if you want to build an e-commerce platform with this type of MVP, you do not need to create a website. Instead, you can use an off-the-shelf e-commerce platform (like Shopify) to test out the basic functionality. Example: Groupon, an e-commerce marketplace connecting subscribers with local merchants by offering activities, travel, goods, and services in 15 countries.
    • Landing Page MVP. This is a text or video presentation of your product that demonstrates your main business idea to the target audience. This type is necessary to estimate your concept with minimal cost and investigate whether potential users are interested in your product. Example: Buffer, a snoozed posting service for social networks.

    Determine which concept of MVP is right for your business by learning more about the types of minimum viable products.

    Some Examples of Successful MVPs

    examples of really good MVPs

    You've definitely heard of one of the platforms listed below. But did you know that initially, it was defined as MVP software?

    • Airbnb. The platform was founded in 2008 by Brian Chesky and Joe Gebbia, and a year after the release, the company received an investment of $7 million from the business incubator. Now, Airbnb offers accommodation in 191 countries around the world.
    • Etsy. The idea for Etsy's creation belongs to Rob Kalin. Initially, he tested an MVP on eBay, and in 2005 the original version of the product was released. The primary target audience is people selling handmade masterpieces. Now there are more than 54 million active users on the platform.
    • Spotify. The streaming platform's MVP was tested in 2007 on a group of Windows users. The concept proved to be very successful, and in 2008 four giant labels provided the startup with the rental rights to their music for $5 million. Now more than 87 million people use Spotify.

    How to Build an MVP?

    stages of mvp development

    Establishing an MVP in business involves several well-thought-out steps. Otherwise, there is a risk of wasting resources and getting a completely useless product. The following are the main MVP development steps:

    1. Market Research

    Even if it seems to you that you have a million-dollar idea, it must meet the needs of the market. To do this, you need to designate your target audience, find out what exactly is attractive to them, and conduct an analysis of competitors. Feel free to do surveys among potential customers. This will help to determine the further business concept more clearly.

    2. Define the Product Idea

    Based on the market research done, you have to highlight the main idea of your product and its value for a potential user. This information should form the basis of development.

    3. Draw Up a Feature List

    The next step is to create a list of functionality that your product should have. Then, prioritize it. From the MVP definition, remember that it should be a simple product, so you only have to define those basic functions.

    4. Development

    And now it's time to bring the concept to life with the help of programming languages. The MVP for a startup must be a quality product to attract as many users as possible. So choose a development team responsibly.

    For a top-notch product creation, it is essential to understand each step of app development clearly. Find out more about how to build your own MVP.

    How to Test Your MVP?

    Testing your project involves bringing it to the market to gauge user reactions. You will need to collect feedback from customers about your product features, including design, usability, intuitive functionality, product value, etc.

    The MVP for software development belongs to the lean startup methodology, and it is based on the product building – measurement – feedback learning cycle. Receiving feedback is followed by the refinement of successful features and retesting. If it is successful, you can create a multifunctional product to attract more customers.

    MVP testing is an important step that allows you to determine the fate of the product.

    How Much Does It Cost to Build an MVP?

    Without knowing the project’s specification, focus, and scope of tasks, it is impossible to determine the development cost. Several significant factors influence the estimation, namely:

    • Project Specification. The more basic functionality you have to create, the higher the cost will be since most developers charge hourly rates.
    • Type of cooperation. Usually, outsourcing companies are more cost-effective than in-house development, although they both provide quality services.
    • Hourly rate. Outsourcing prices vary depending on the country. Developers from Great Britain charge $50-70 per hour, while the hourly rate of programmers from Ukraine is $25-40. That being said, great developers can easily be found in both countries.
    • Type of product. The project budget is also influenced by whether you want a web, mobile, or desktop application. Mobile development usually costs more.

    Learn more about how to estimate your project by reading about MVP development costs.


    About 90% of startups fail. So what is the secret to the 10%? Forbes outlined the criteria for successful projects:

    They have a product that meets a need, they don’t ignore anything, they grow fast, and they recover from the hard-knock startup life.

    Creating a minimum viable product allows you to evaluate how useful and valuable your idea is and whether it meets market needs. We know this from 13 years of experience in the high-quality delivery of MVPs.

    Cover all aspects of MVP stages partnering with industry professionals.

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