How to Build a Minimum Viable Product (MVP)

Often, when companies create new products or services, they spend months perfecting them only to eventually find that customers are not so interested. Instead, they could start with a "good enough" version of their offering, known as a minimum viable product (MVP), to quickly gather feedback, refine the product, and avoid overinvesting in untested ideas. Such an approach could let them make fast product improvements or give it up with minimal spending. 

In this blog post, we'll look at this approach in detail and offer a guide on how to build a successful MVP.

What is a minimum viable product (MVP)?

An MVP is a product that has only core but sufficient functions to make the idea behind it work. It is more than just a prototype; an MVP is something you can already sell. It can also be regarded as a development technique that enables developers to create better products with minimal initial investment based on customer feedback. In other words, MVP is the most basic product version that can be released to test a business idea, analyze users' feedback, adapt quickly, and create a full product version based on the insights.

One of the most useful insights into how to build an MVP comes from Henrik Kniberg, a well-known Agile and Lean coach. He uses the famous "skateboard car" metaphor to explain the concept of developing an MVP. According to his analogy, you should start with the most basic, functional version of a product, even if it's rudimentary. As development progresses, more features are added, but the core idea is that each stage of the product should deliver value to the user and allow for feedback. Kniberg emphasizes the importance of identifying the simplest product version that can be put into users' hands to gather real feedback. It fits with the MVP approach of starting small, testing with users, and improving based on their feedback.

Real-world MVP examples 

There exist numerous successful companies that serve as a proof of the usefulness of MVP product development. Each of them focused on testing core ideas with minimal resources and gathering real-world feedback to take the next steps. 

For instance,  Airbnb's story began when two roommates in San Francisco decided to rent out their apartment during a busy design conference. They created a simple website with photos of their space and offered air mattresses and breakfast, hence the name "Air Bed & Breakfast." It helped them gauge interest and validate the idea of a short-term rental platform without a large investment. This small start eventually grew into Airbnb, now a global short-term rentals platform with a market cap of $84.10 billion. 

Similarly, Spotify, a streaming platform, was launched as a desktop-only beta version with limited features to test interest in a music streaming service. Instead of building a complex music streaming platform immediately, the founders focused on a minimal viable product. This early version tested if they could deliver music instantly without lag and confirmed user interest. Feedback from early users helped the team refine the product before scaling globally. Today, Spotify is a global music streaming leader, with a market cap of almost $80 billion and with 620+ million users.

Zappos, now a major online shoe retailer, started with a basic website with pictures of shoes from local stores to test the idea that people would be willing to buy shoes online without trying them on first. Without holding any inventory, the founder would buy the shoes and ship them only after the customers made a purchase. This early model is similar to today's dropshipping. Such MVP approach is known as 'Flintstoning', i.e., your product or service may seem polished and fully functional, but beneath your car, you're actually doing most of the work manually. In July 2009, Amazon acquired Zappos in an all-stock deal worth around $1.2 billion. Zappos.com's estimated annual revenue is currently $592.4M per year. 

Sometimes, you can test your assumptions without even building a product. In this way  Dropbox's founder created a simple demo video showing how the product would work, instead of creating a fully-functioning DropBox software version for users to try and investing a ton of resources into development. This MVP approach tested interest before investing in development, gathering thousands of early users. Despite the simplicity of the video, it sparked a surge of interest, showing there was significant demand for Dropbox's solution even before it was developed.

The benefits of an MVP

The benefits of an MVP go beyond saving money and speeding up time to market. It's about smart development focusing on the customer, with each version getting closer to what users really want. Here are the several benefits of building an MVP:

Test business idea

MVP is an easy way to test your business idea. With MVP, you can demonstrate your idea rather than talk about it for hours. By focusing on building core features, MVP helps test the market's response to the product and user needs, so you can refine your idea not based on assumptions but based on real users' feedback. This early validation of the product idea helps startup companies ensure that they are developing a product that will be in demand. Besides, if your first users find value in your idea, your chances of getting investment will become much higher.

Early product insights

MVP is an ideal tool for adjusting the product based on user feedback. By focusing on a limited set of core features, MVP allows you to understand customer needs and preferences, guiding the priorities of your product roadmap. If these features are well received, you can introduce new features tailored to user preferences. The iterative process ensures that the final product resonates well with the target audience without the additional costs of developing a comprehensive software solution and increases the likelihood of success.

Minimize capital investment

Developing an MVP is obviously less expensive than launching a fully developed final product. So, when developing MVP, startups can significantly reduce initial costs by releasing a simplified version of their product and mitigate financial risks. Once MVP gathers positive feedback, companies can focus on incremental development and allocating resources effectively.

Secure investor funding

If you are a startup looking to raise funding for your app, presenting a well-designed MVP is often the deciding factor in attracting investor interest and raising venture capital funding. Showing a functional MVP helps potential investors visualize your business idea and its potential, which makes it much easier to secure startup funding. 

Reducing time to market

The MVP product development process is much faster than a full-scale development process, so you can get your product to market much faster. By launching a functional version of your product with only the basic features in a shorter time frame, you can start attracting customers and gaining market presence early. This quick time to market can be critical to gaining a competitive advantage and generating revenue sooner.

How to build and test an MVP

Building and testing an MVP requires a clear understanding of both your product vision and the market. Here's a guide on how to build a successful MVP step by step:

Step 1. Define the Problem and Solution

Before you get busy with building an MVP, it's critical to identify the exact problem you're trying to solve and the specific solution your product offers to that problem. Start with conducting research, surveys, or interviews to pinpoint problems potential users face and their needs. Then, define how your MVP will address this problem effectively and provide a concise value proposition to help users understand your product's purpose. Once the problems and pain points, along with their solutions, are clearly defined, you can proceed to develop the MVP version of your future product. 

Step 2. Analyze competitors

Even if your idea feels unique, competitors are likely out there. Start by researching your top three rivals—check out their history, products, value propositions, market position, and profitability to see what works for them. Look at how they present themselves on websites, in reports, and through ads for ideas on your own approach. Explore news, reviews, and ratings to get a broader view of the industry. Then, focus on what makes your product stand out and refine your value proposition to highlight why it's the best choice for your target customers.

Step 3. Identify Your Target Audience

When building an MVP, focus on a specific group of early adopters rather than a broad audience. Creating a user persona can help you understand who your target customers are and how to shape your MVP to meet their needs. To define your audience, analyze details like age, gender, social status, location, lifestyle, and income, along with professional details like job title and work challenges. Determine problems they are trying to solve, their preferences, and even the devices they prefer to use. Take into account factors that may influence their purchasing decisions and product use. By gathering this information, you can prioritize relevant features, avoid feature creep, and design a product that meets the expectations of users who will likely provide valuable feedback. Depending on the size of your business, you may need to develop multiple buyer personas. 

Step 4: Engage in planning

Create a budget to allocate resources wisely, covering development, design, marketing, research, and operational costs. A clear budget helps keep spending on track while reaching your MVP's goals. Set a realistic timeline for your MVP—usually a few weeks to a few months. This deadline keeps development focused on core features and ensures a quick transition to gathering feedback and refining.

Step 5: Define the must-have MVP features 

At this stage, you must define the functionality of the MVP, or in other words, identify the core features your product can't do without, as well as the 'nice to have' features to save for later iterations. You can try achieving it by mapping out the journey users will take.

The goal is to keep your MVP simple yet functional to test your predictions about your business model. It's easy to get tempted to add extra features, but every unnecessary addition wastes time and resources if customers aren't interested. Keep your MVP simple, focusing only on core features that early users will find valuable enough to pay for. 

Step 6. Create your MVP

You have a great idea; you've defined tasks, goals, and features scope, and then it's time to develop the MVP and test it. It's important to understand that an MVP doesn't have to be complex or heavily engineered. It could be as simple as a landing page, a prototype, or even a demo video. The purpose is to test your business hypothesis with minimal effort and resources. Choose an MVP format that suits your needs. For example, you could set up a basic website with a user interface while manually handling backend tasks, as Zappos did in its early days. Start with a straightforward version that meets user needs, focusing on function over polish and aesthetics.

Step 7. Get feedback from early adopters

Once your MVP is live, have your team test it for a few days to catch any initial issues. If all goes well, invite your first users to try it and gather as much feedback as possible. User feedback can confirm you're on the right track or show you when you're off course.  Track how often they use the product, what features they engage with, and their overall satisfaction. Surveys or direct conversations can reveal what users liked, didn't like, and what they felt was missing.Their insights are invaluable for improving the MVP and helping you evolve it into a product that resonates with users. Use this feedback to refine your MVP in quick, iterative cycles until it meets your market's needs. Don't be discouraged by critical feedback, as it is also valuable!  Even if you have to abandon your idea, using an MVP saves more time and money in contrast to launching a fully-featured product and leaves the resources to discover what truly matters to your users. 

Step 8. Decide the next Steps: scale, adjust, or abandon

After collecting and analyzing users' feedback, choose your next move. If your MVP proves successful, you can expand its features, increase development resources, and plan for a broader market launch. If the MVP meets user expectations but requires minor improvements, continue refining it based on feedback. It may involve enhancing features and possibly adding new functionalities that align with user needs. If feedback indicates that the core product isn't solving the problem, consider revising your approach. Sometimes, it may even be wise to abandon the idea. This decision, though difficult, saves resources and time that can be redirected to more viable projects, bringing you closer to success. 

Bottom Line: 

Building an MVP is a smart and efficient way to launch new software. This process involves gathering user feedback, improving your product based on what you learn, and avoiding the risk of investing too much in ideas that might not work. Your product will evolve as you check, learn, and measure its performance. Finding a good IT vendor can make this process much easier. A reliable IT vendor will help with the discovery phase by figuring out your competitors, defining the features for your MVP, designing the concept, setting timelines, and estimating costs. Then, they'll build the MVP format that suits your needs. Before the official release, they'll ensure your MVP is user-friendly, functional, and offers real value to your audience. Finally, they'll help launch the MVP to a small group of early adopters or beta testers, monitoring the launch to quickly address any problems.