When reading the news about software projects and services, you can often encounter the concept of MVP. To achieve success with minimal risks and costs in an environment where 92% of launched startups are closed, each project should start with the launch of a minimum viable product. In this article, we will analyze the concept, types, and importance of MVPs for startups and business in general.

What MVP Is and Why You Need One

MVP (Minimum Viable Product) is the earliest version of the product, which has only the functions necessary to sufficiently convey its fundamental values to the audience and test them on its first users.

The key point in the idea of MVP is that the company produces a real product, which is then delivered to the market. It can be a one-page website or appear to be a fully automated service that is actually performed manually. Many software development companies offer MVP development for startups with affordable rates, so it’s not necessary to look for developers on your own. After the MVP is launched, developers observe the behavior of the people using the service for the first time. Based on the information obtained during the experiment, the team continues, corrects, or cancels work on the product.

MVP has all the basic functions necessary to implement the idea and retain its first followers. Such a product must be of sufficient value to users.

When an entrepreneur launches a startup, they can only guess whether consumers will appreciate their idea, or whether they will even use the products for their intended purpose. The entrepreneur assumes that customers have a need that has to be satisfied, and the product does exactly that. To find out for sure, it is necessary to present the MVP to customers and collect the maximum amount of confirmed information about their impression of the product.

However, getting feedback from customers is not the only benefit of implementing an MVP in a business strategy. Beta testing on customers provides direct and indirect financial benefits:

  • Beta testing serves as an opportunity to convince investors to allocate a large budget for the completion of development;
  • Early release of the product to the market provides the opportunity to make a profit before the completion of the development process;
  • It helps save costs on market analysis and CA.

It’s better to start developing an MVP at the initial stages of product development. The idea can be cool only in your head, but not in practice. So why immediately invest a lot of money in development when there is an option with low costs and an accurate verification? After the release of an MVP, you will determine the demand and understand whether the project’s development is going in the right direction or not.

But the coolest thing about MVP is collecting valuable information from its very first users. Their reaction is the most powerful indicator of the correct implementation of the project. Use the collected data to plan further updates and determine priority goals: which functions to implement first, for example.

Why MVP Is So Important For Business Success

Startups offer a product or service to meet certain needs of the target audience. The higher the significance of the problem for the customer, the more valuable the proposed solution. The implementation of MVP allows you to determine to what extent the product meets the expectations and needs of the customer at the initial stages of business development. At the same time, the company’s management and investors receive the data necessary to make a decision about the future of the startup.

According to statistics, 9 out of 10 startups fail. In part, the failures are associated with the release of useless or untimely goods. Recall, for example, the legendary history of sugar sticker bags. Their inventor wanted to make life easier for customers. He assumed that the cafe’s visitors would be able to break the bags in the middle and pour out the contents without dropping a crumb. However, the cafe’s customers continued to tear off the corner of the bag out of habit. Brilliant at first glance, the idea turned out to be completely useless in practice. And although the stickers later gained popularity due to the convenience of transportation, they did not bring any profit to their inventor.

MVP helps to establish the necessary functionality of the product and effectively spend production resources based on the goals set at the start of development.

By creating an MVP, the team can understand the customers’ interest in the product, without spending too much time and effort on polishing the idea to perfection. The sooner the creators receive feedback from customers, the less effort and costs will be spent on a failure idea. An MVP gives a more reliable result than surveys of the target audience and allows you to observe the real interaction of the user and the program. This means that in the process of the product’s creation, developers will already understand the potential payback.

This concept is based on the lean startup philosophy and implies an iterative process of building a measurement-learning cycle to fully meet the needs of the market. Starting with a minimum viable product, the team focuses on the core functions and value of the proposed idea, clearly understanding the most important tasks and implementing them as a priority. For example, in the case of software development, programmers switch to optimizing the user interface only after the release of a minimum viable product.

An MVP alleviates the fear of “unfinished construction” and gives a clear direction for development. In addition, the presence of a functioning product motivates the development team and reduces the concern of product managers about insufficient functionality.

MVP And PoC: What’s The Difference?

An MVP should not be confused with a proof of concept (PoC). The latter can be interpreted in different ways depending on the industry.

First of all, a proof of concept is not an early version of the product. In software development, a PoC describes the processes aimed at finding out whether a software concept is technically viable. The team can also choose this approach in order to determine the required amount of work and the best development technologies, identify possible technical problems and find solutions to them.

Drew Houston, the founder of Dropbox, made an explanatory video about how Dropbox should work. About 75,000 people signed up for it on the first night. A similar method can be implemented with the help of a blog in which you share ideas about the product you plan to develop with the audience. Although some attribute proof of concept correctness to an MVP, we tend to classify this interpretation separately as PoC.

The terms MVP and PoC are interrelated, but not interchangeable. A proof of concept correctness, implemented in an optimal way, becomes a minimum viable product.

Types And Advantages of MVP

There are many different approaches to creating a minimum viable product, but in practice, only a couple are used frequently. So let’s talk about the most popular ones.

The Wizard of Oz (sometimes called Flintstone’s MVP)

Both names of this type of minimum viable product symbolize its principle of operation. Just as Fred Flintstone created the illusion that he had a real car, and the Wizard of Oz used tricks to pretend to be a giant green head, fairy, fireball, or monster, this type of MVP only seems to be fully functional. In reality, a startup does all the work manually, instead of using software. There is no basic software at all, but there is a product concept that requires verification.

Nick Swinmurn, the founder of Zappos, has proven that this strategy works. At the very beginning, he didn’t spend a dollar on buying shoes and renting a warehouse. He posted photos of the shoes on the website. As soon as customers started ordering shoes, he went to the store, bought the right pair, and sent them to the client. After realizing that the project is viable, he updated the functionality of the site.

Concierge MVP

Entrepreneurs who choose the concierge MVP approach also provide practical services. But in this case, the client knows that a real person is behind the service provided. Wealthfront, a financial planning and investment service, started with a concierge MVP. Wealthfront employees communicated directly with clients who needed help with money management.

An important difference between the concierge MVP and the Wizard of Oz type is that it is aimed at generating ideas about the future of the product, providing services and communicating with the client.

Disparate MVP

The idea of a disparate MVP is to convey the value of using existing tools instead of creating a unique solution. The prototype only looks like a complex product. You can use simple software, put everything together and add the necessary functionality after receiving feedback.

Groupon is a great example of a disparate MVP. Its founder Andrew Mason launched a WordPress site where he manually posted images of food every day. He generated proposals as PDF documents using AppleScript and emailed them via Apple Mail. So he confirmed the hypothesis of Groupon.

A product with one parameter

An MVP can be real software with a minimal set of basic functions required for verification. With their help, you will be able to narrow down the target group, get feedback and analyze it, and focus on testing.

So, what are the advantages of an MVP?

A minimum viable product allows you to:

  • confirm the viability of the idea and test hypotheses about the product using real data;
  • identify trends that can be used in the development of the full version of the product;
  • reduce the risk of major financial losses in the event of a failed product release;
  • reduce the cost of development by prioritizing important and identifying unclaimed functions;
  • speed up error detection and internal product testing;
  • build a user base before a full-scale launch;
  • occupy a market niche and attract investors ahead of competitors.


A minimum viable product plays the role of an airbag — it makes it possible to predict the commercial and technical potential of the product, as well as its implementation. An MVP allows you to make technical and business decisions based on facts, not assumptions. Therefore, testing a concept or product on the market is the main goal of creating an MVP.