Minimum Viable Product development for startups – the ultimate guide

Are you a startup owner looking to build the next innovative product?

If so, you'll want to pay close attention to this ultimate guide on Minimum Viable Product – aka building an MVP for startups.

Why? Because building an MVP is the most efficient way to validate your business hypotheses, reduce the risk of failure, and conserve your resources.

According to a report by Exploding Topics, 20% of startups fail within their first year and 45% fail within their fifth year. That's a staggering statistic highlighting the importance of taking a strategic approach to building a successful business.

In this article, we'll explore the ins and outs of MVP development for startups. We'll cover the benefits of building an MVP, the different types of MVPs, how to build an MVP that delivers value to your customers, and more!

Whether you're a first-time entrepreneur or a seasoned pro, this ultimate guide on MVP development will provide you with the knowledge and tools you need.

So let's dive in!

What is MVP development?

Before we dive deeper into the subject, let's start by answering a common question: what is MVP startup?

MVP in a startup is building a product with just enough features to satisfy early customers and gather feedback for further development.

As the name suggests, it is the minimum version of an actual product that can be released to the market, allowing startups to validate their assumptions and minimize the risk of building a product that nobody wants.

MVP development for startups is a popular approach in the Lean Startup methodology, which emphasizes the importance of experimentation, customer feedback, and iteration. It is also cost-effective for startups to test their ideas without investing significant resources upfront.

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MVP for startups – why is it important?

MVP development is important for startups because it helps validate their business ideas before investing time, money, and resources to build a full-fledged product. Startups that skip the MVP stage risk making a product nobody wants or needs, leading to wasted resources and failed ventures.

By creating an MVP, startups can test their product hypothesis, gather feedback from early adopters, and refine their ideas based on target market demand. This approach helps to reduce the risk of failure and increase the chances of success. 

While we have briefly explained the importance, let's look at the benefits of MVP development to understand why it's crucial to have it!

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The benefits of the MVP development

MVP development offers several benefits to startups, especially those who are working with limited resources. Here are some of the key advantages:

1. Cost-effective

One of the most significant benefits of startup MVP development is that it lowers development costs. Startups often have limited resources, and building a full-fledged product can be expensive.

By building an MVP, startups can test their product hypothesis and gather feedback from users without investing significant resources.

With an MVP, startups can start small and iterate on their product based on customer feedback. This approach can save startups a lot of money in the long run, as they can avoid investing in features that do not add value to the customer.

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2. Faster time-to-market

Another benefit of MVP development is that it enables startups to bring their product to market faster. Traditional product development can take a long time, as startups often spend months or even years developing a product before launching it.

In contrast, MVP development enables startups to launch their product in a matter of weeks or months. By focusing on the core features that deliver the most value to the customer, startups can develop a minimal product that can be launched quickly.

This approach reduces time-to-market and enables startups to gather feedback from early adopters and refine their products based on market demand.

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3. Validation of assumptions

MVP development enables startups to validate their product assumptions early in development.

When building a full-fledged product, startups often make assumptions about customer needs and preferences. However, these assumptions are often based on guesswork and may not reflect the reality of the market.

By building an MVP, startups can test their assumptions and gather feedback from users. This feedback can help startups refine their product based on actual customer needs and preferences.

For example, a startup that develops a social media platform may assume that potential users want a wide range of features, such as photo filters and stickers. However, by building an MVP with only basic features, such as profile creation and messaging, the startup can test whether users value these features before investing in additional features.

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4. Reduced risk of failure

Finally, MVP development can help reduce the risk of failure for startups. According to a survey by CB Insights, the number one reason why startups fail is due to a lack of market need. In other words, startups develop products that do not address real users' needs.

MVP development can help mitigate this risk by enabling startups to test their product hypothesis early in development.

This approach can help startups avoid investing in features that do not add value to the potential clients and focus on developing a product that meets real customer needs. As a result, startups can increase their chances of achieving business goals and reduce the risk of failure.

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How to build a Minimum Viable Product (MVP)?

To build MVP startup, it's best to start with a discovery stage to ensure a structured approach that helps develop a product that meets customer needs and solves a problem. The common steps are generally followed:

1. Product definition

Defining your future product with the help of a value proposition canvas helps set the direction and expectations for the rest of the MVP development process. Start by clearly explaining the problem your product solves, identifying the target audience, and outlining the features and benefits. Remember to consider cost-effectiveness and scalability, and don't hesitate to seek expert advice from a custom software development company.

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2. Technology definition

To define the technology for your MVP, prioritize fast development and scalability while seeking expert advice to balance technology capabilities with user experience. Choose cloud services like AWS or Azure to minimize costs and improve scalability. Select programming languages and frameworks like React or no code solutions like Webflow, that are easily adaptable for future iterations. Integrate third-party APIs to reduce development time and add core functionality. Finally, ensure your technology choices align with your target audience's preferences and expectations for a successful MVP.

3. Project planning

When planning a future development project, start by clearly defining primary goals, business objectives, timelines, budgets, and required resources. Break down tasks into smaller, manageable components and identify dependencies between them. Assign roles and responsibilities to team members and ensure everyone is on the same page. Use project management tools like Asana or Trello to track progress and identify potential risks. Be flexible and adaptable to change development stages when necessary, and communicate with team members regularly to ensure the project stays on track.

Here is a list of discovery phase deliverables from our team's checklist that you can use as a reference guide:

Once the discovery stage is complete, you can start designing, developing, and testing your prototype. Here are the next steps:

4. Design an MVP prototype

Start with wireframes and mockups, focusing on essential features and aiming for simplicity. Use consistent branding and typography. Prioritize mobile responsiveness and accessibility. Avoid over-designing and feature creep. Conduct user testing and incorporate feedback. Iterate as needed, and remember the goal is to deliver a functional MVP, not a perfect product.

5. Develop an MVP prototype

When developing an MVP, it's important to keep in mind that simplicity is key. Start with a basic architecture that can be easily scaled as your product grows and be ready for future enhancement. Make sure to use version control to track changes and ensure that the product is built with security in mind. Building a stable and reliable product with clean, well-documented code is crucial to the success of your MVP. Continuously testing your product concept is also important to ensure that it functions properly and is free of bugs.

6. Test the MVP prototype

The prototype should be tested with early adopters to gather feedback on the product's usability, minimum features, and core functionality. This is a crucial step because it will help you analyze how the final MVP turns out, identify any errors in design or functionality, and see the idea in action before launch to ensure the best quality.

7. Refine the MVP

Based on the feedback gathered from early adopters, the MVP should be refined and improved. This step involves identifying the most valuable features, prioritizing them, and iterating on the product solution based on customer feedback.

8. Launch the MVP

Once the MVP has been refined and improved based on real customer experience, it is ready to launch. It should be accompanied by a marketing campaign to generate buzz and attract early adopters.

Last but not least – gathering feedback

After launching the MVP, startups should continue to gather feedback from early adopters to identify any areas for improvement and iterate on the product based on customer needs. Oftentimes, a successful MVP leads to a successful final product, and if it's built with user feedback in mind, it's unstoppable!

The types of MVP development for startup

When it comes to MVP in a startups, you have a few options to choose from. From the broad categories of low-fidelity MVPs and high-fidelity MVPs, there are 9 types you can develop based on your type of product and what you need. 

Developing low-fidelity MVPs are low-cost and provide basic results for a deeper understanding of customer needs. High-fidelity MVPs require more resources but provide more in-depth results, determining customer willingness to pay for the solution and collecting feedback for further development.

Here are some of the most common types of MVPs that startups can develop:

1. The Fake Door MVP

The "Fake Door" is a low-fidelity MVP that measures interest in a product or feature without actual implementation. A landing page with a call-to-action button leads to a message that the functionality is "under construction."

This helps to quickly prove or disprove an product idea, prevent the delivery of unwanted features, and reduce the risk of developing an unsuccessful product. However, it can decrease credibility and potentially distort results as users may interact with the "fake door" out of curiosity.

2. Email Campaign MVP

The Email campaign MVP is an affordable and quick way to test new ideas with an existing email list of potential customers. It enables direct interaction with a specific audience, but low conversion rates may impact results.

This low-fidelity option is incredibly cheaper than other types, but it also brings the least value to your MVP launch. It is best used in combination with other approaches like a landing page MVP.

3. Marketing MVP

This low-fidelity approach helps determine which product or service aspects are most appealing and provides flexibility for targeting specific demographics. You can use all social media platforms for marketing, partner with influencers, and test user interest in your product.

However, substantial investments are necessary for comprehensive ad campaigns. This is why, while this method is ideal for testing ideas and learning about the target market, it may not provide extensive exposure if you don't have a bigger budget.

4. Landing page MVP

Landing page MVP development for tech startup is similar to the "Fake Door" approach. However, the difference is that you don't fake a user-response. Instead, you introduce the product concept to site visitors and provide them with a choice of potential options.

It's also a low-fidelity type to offer unique value propositions and collect email addresses for marketing needs. Multiple landing pages can be created to test messaging strategies, but it may not provide a conversion factor and has limited data collection if visitors don't take action.

5. Concierge MVP

A Concierge MVP is a high-fidelity product that imitates a multifunctional software solution while a human fulfills its primary functions, allowing the startup to validate the product's effectiveness and popularity before it's fully developed.

This MVP provides accurate user behavior data dealing with real customers and all final product features. It enables the startup to raise capital before full automation, saves time, and provides quick results. However, relying on human competency for service quality may be a drawback, and finding reliable operators can be challenging. 

6. Wizard of Oz MVP

The Wizard of Oz MVP is similar to a Concierge MVP as it appears fully functional, but many features are manually processed. However, in this case, the beta testers don't know about it.

This type is helpful for testing complex ideas, and its benefits include cost-effectiveness, rapid iterations, and unique user insights. However, drawbacks include inconsistencies in user interactions due to the human factor and the need for detailed behavior instructions.

7. Single feature MVP

A single-feature MVP is a traditional high-fidelity approach that tests how users will accept a specific feature. It's perfect for small businesses entering a market with big competitors or for testing a part of an existing solution.

Although it provides faster development and easier explanation, it has lower user engagement and a narrower target audience. However, less engagement for the MVP indicates that users are not ready to pay for add-ons or the product is not attractive.

8. Piecemeal MVP

Piecemeal MVP is the most cost-effective high-fidelity type of presenting a product to customers using already available tools and solutions.

It allows faster time-to-market and reduced expenses compared to developing a custom product from scratch. However, finding existing solutions that seamlessly cooperate when implementing multiple features can be challenging. Additionally, using third-party solutions may not always be the most technological or quickest way to deliver results to customers.

9. Prototype MVP

Prototype startup MVP development involves building a functional product or service prototype to test its viability. This is the most popular approach, enabling startups to test the product hypothesis and gather feedback from early adopters.

The advantage of a prototype MVP is that it enables startups to test their product hypothesis with a more functional product that is also well-received by users. However, this approach can be more expensive and time-consuming than other MVP types.

A prototype MVP is the best choice for complex projects with bigger visions for the future.

Want to find out how to launch a highly functional and affordable MVP for your product?

Begin your discovery phase with the COAX experts and find out exactly what you need for success!

Why do startups need to invest in the MVP stage?

Each type of MVP has its own advantages and disadvantages, and startups should choose the type that best suits their needs. By leveraging the right type of MVP, startups can test their product hypothesis and gather feedback from early adopters without investing significant resources upfront.

Since MVPs have only core features, they require less time, money, and resources to develop compared to a full-fledged product. This approach helps startups conserve their resources and reduce costs, allowing them to focus on building a successful business.

Startup MVP examples – the success stories of two giants

While there have been several MVPs that took the digital industry by storm, AirBnB and Twitter are two of the most successful startup MVP that are still dominating their niche.

Let's examine their MVP stories:

1. Airbnb

Airbnb is a popular online marketplace that connects travelers with locals who offer to lodge. The company was founded in 2008 by Brian Chesky and Joe Gebbia, who was struggling to pay rent in San Francisco.

They decided to rent out air mattresses in their living room to conference attendees and eventually realized that this idea had the potential to become a successful business.

AirBnB's MVP startups approach involved testing their product hypothesis with a simple website that listed available rooms in their apartment for rent. They took photos of the apartment and created a website that showcased the available space. They also provided breakfast and a tour of the city as part of the package. 

The founders tested their MVP by attending a design conference in San Francisco, where they targeted attendees who could not find hotel rooms due to the high demand. They managed to rent out three air mattresses in their apartment and realized that there was a demand for their product.

By renting out air mattresses in their living room, they validated the demand for their service and gathered feedback from early adopters. This feedback helped them refine their business model and expand their offerings. Today, Airbnb is valued at over $100 billion and has over 7 million listings worldwide.

2. Twitter

Twitter is a popular social media platform that allows users to share short messages or "tweets." The platform was launched in 2006 by Jack Dorsey, Biz Stone, and Evan Williams.

Initially, the founders envisioned Twitter as a tool for internal communication within their podcasting company, Odeo. However, they soon realized that Twitter had the potential to become a standalone product.

Twitter's MVP approach involved testing their product hypothesis with a simple website that allowed users to send and receive short messages. The founders built the site in two weeks, and it was originally called "twttr." They launched the site internally at Odeo and invited a small group of friends to test it out.

The feedback they received from these early adopters was positive, and they decided to expand their user base by inviting more people to try out the service. They also introduced new features, such as the ability to reply to tweets and send direct messages.

By launching a simple website and inviting a small group of users to test it out, they were able to validate the demand for their service and gather feedback from early adopters. Today, Twitter has over 330 million active users worldwide and is valued at over $50 billion.

Final Thoughts

In conclusion, the MVP stage is critical for startups to build successful businesses. However, working with a dedicated team of experts who can bring your vision to life is an important part of making your project a success!

COAX Software offers MVP development services that can help you bring your idea to life. Our experienced team of developers can work with you to design, build, and launch an MVP that meets your specific needs and requirements.

With our MVP development solutions, you can expect a cost-effective and streamlined approach to building your product. We can help you validate your assumptions, reduce risk, and bring your functional product to market faster.

Want to discover more about MVPs and our process? Book a Free Consultation with our experts!

Frequently Asked Questions about the MVP

What is MVP in startup?

MVP stands for Minimum Viable Product, which is a basic version of a product that is developed to test the market and validate assumptions. It is the simplest version of a product that can be built with the core features that solve a specific problem for the target audience.

Why is MVP for startups important?

MVP is crucial for startups because it helps them to validate their assumptions, test the market, and reduce the risk of failure. It allows startups to gather feedback from early adopters and make necessary changes before investing more time and money in building a complete product. MVP development also helps startups to bring their products to market faster and at a lower cost.

How much does building MVP for startups cost?

The cost of MVPs can vary depending on various factors, such as the complexity of the product, the technology stack used, the development team's location, and more. However, the cost of building an MVP is generally much lower than building a complete product. On average, MVP in a startups can cost anywhere from $10,000 to $50,000 or more, depending on the specific requirements.

How to choose an MVP development company?

Choosing a MVP startup software development company can be challenging, but there are several factors to consider when making a decision. Look for a company with experience in building MVPs, a proven track record of success, and a team of skilled developers. Consider the company's communication skills, pricing, and project management methodologies. Additionally, look for a company that is open to collaboration and can work closely with you to understand your specific needs and requirements.