What is a Minimum Viable Product (MVP)? A Guide for Businesses

In 2023, Facebook served 3 billion users, Uber was valued at $132 billion, and Amazon earned $554 billion.

What do they have in common?

They all started as minimum viable products (MVPs).

An MVP is a litmus test for viability — a barometer in a world where 42% of startups fail to read the market. It lets you validate your concept with real users so you don’t pour your heart (and money) into a full-fledged product that nobody wants.

Planning to build one? Here’s a guide to developing a lean and mean MVP that secures investor confidence and delivers user value.

MVP Meaning: What is a minimum viable product in business?

A minimum viable product, or MVP, is a streamlined version of an app or software designed to attract early adopters and gather actionable feedback.

It’s stripped down to the essentials but is robust enough to handle real-world usage and prove its potential for product-market fit.

More than a prototype, an MVP app is a strategic tool with just enough features to engage users and test key assumptions. From this initial release, you can glean insights to shape your product’s future, refining and enhancing as you go.

With a focused MVP, you can gauge your software’s marketability without the expense of full-scale development. It lets you move swiftly and learn fast, so you don’t sink resources into features that miss the mark.

MVP origins

Frank Robinson coined the term minimum viable product in 2001 after observing that developers focus too much on non-essential features and not enough on core value.

It became standard jargon in 2011 when Eric Ries used it in The Lean Startup — a book that recommends building an MVP, measuring its performance, and learning from this data to create a sticky product. The term has since evolved from a simple validation tool to a core practice for building customer-centric solutions.

Here at Cheesecake Labs, we take MVPs even further. Instead of minimum viable products, we deliver minimum valuable products that solve real problems and improve the user’s life.

Our MVP development approach is efficient but comprehensive. With prudent planning, carefully selected tech stacks, and lean methodologies, we can build MVPs that provide practical value and gather useful insights — all while fitting a client’s budget and timeline.

What is the purpose of an MVP, and why is it important?

An MVP serves several crucial functions in the development process. Here are some of its main purposes and goals.

Validate your idea early

An MVP lets you test your product idea when it counts the most: right at the start. With this front-loading approach, you can nimbly build something people want to use, increasing your chances of long-term success.

Dropbox is a great example of this. Did you know this file-hosting service started with a three-minute video demonstrating its file-syncing solution? This barebones MVP helped them validate their idea and secure funding before building the actual software.

Learn more about your customers

An MVP can reveal what your target users truly need, want, and expect — which might be completely different from your assumptions.

Many successful ventures shifted gears based on early MVP insights.

One of them is Instagram. It was initially launched as a location-based check-in app called Burbn (yes, after the American whiskey). But when user feedback revealed a stronger interest in photo-sharing, it pivoted to the ‘Gram as we know it today!

Release a product quickly

Need to enter the market fast? An MVP can give you a head start.

It was exactly this approach that propelled Twitter (now X) into the $44 billion stratosphere.

Concerned that their podcast platform Odeo couldn’t compete with Apple, Twitter’s founders looked for a new niche and found potential in microblogging. They launched an MVP in just 3 months — the rest is history.

Smart resource management

By keeping your expenses minimal during early-stage development, an MVP sets you up for sustainable growth.

Airbnb is a classic example of a low-budget MVP that conquered the world. It’s now a well-funded company, but it wasn’t always that way. Its founders — who at that time were struggling to pay their San Francisco rent — bootstrapped a no-frills website listing their spare room. This MVP allowed them to validate their home-sharing concept without hefty investments.

Deliver immediate value

Even with limited features, a good MVP offers real value to customers.

Take a look at Spotify. It started as a barebones MVP focused on something everyone likes: free music. Even though it had limited features, the app immediately engaged early users, boosted demand, and eventually paved the way for a successful subscription model.

5 Examples of successful MVPs

Aside from the companies we’ve already mentioned, here are five other MVPs that made it big:

Amazon

Did you know that this retail giant began as a simple online bookstore? This basic yet effective MVP proved a crucial point: people were ready to buy books online (a radical concept back in 1995). From this, the company expanded to become a one-stop shop for almost anything.

Facebook

Now a household name and cultural phenomenon, Facebook started as an online directory whose sole purpose was to connect Harvard students. (Here’s how it looked back then.) As its popularity soared, the platform expanded to other colleges, then high schools, and eventually to users worldwide.

Uber

This multinational ride-hailing app was once a stripped-down MVP with a single function: booking rides. Devoid of now-familiar features like fare estimates and in-app tracking, it focused on gathering feedback from drivers and passengers. Uber used this information to improve and grow its monthly active user base to 131 million.

TikTok

Now a social media sensation, TikTok started as Musical.ly, a much smaller 15-second video-sharing platform. ByteDance saw its potential and bought it for $1 billion, eventually rebranding it as TikTok.

Foursquare

This local search-and-discovery platform initially entered the market as a social network that lets users check in at various locations and share their whereabouts with friends. Although it didn’t quite succeed, Foursquare used its MVP learnings to transform into a data-driven geolocation app with over 100 million users.

Benefits and disadvantages of MVPs

An MVP shortens the path from concept to market by trimming the bloat associated with full-scale development. Here are some of its benefits:

Clarifies your vision – An MVP transforms your idea into something tangible. This makes it easier for your target audience and potential investors to grasp and support your concept.
Focuses on core functionality – By zooming in on the essential features, an MVP streamlines development and prevents the dreaded feature creep, which has caused many problems even for established companies. (Remember the disaster that was Facebook Beacon?)
Establishes early customer relationships – Launching an MVP allows you to build relationships with your customers from the outset. This early engagement can foster a sense of community and loyalty around your product.
Lets you release faster – Because it’s faster to build than a fully fleshed-out product, MVPs can reduce your time to market. This is crucial in niches where timing can be the difference between success and obscurity.
Helps you better understand customer needs – An MVP establishes a feedback loop so you can tune your engine based on user preferences and behaviors.
Helps you stay responsive to a fast-moving market – With an MVP’s inherent flexibility, you can quickly adapt to market changes, like new regulations or disruptive shifts you couldn’t have predicted.
Poses fewer risks – Starting with the bare minimum reduces your exposure to financial and technical risks. It leaves room for your product to evolve based on actual market needs.

All this said, MVPs also have their share of disadvantages. Here are two to watch out for:

Trouble identifying core functionalities – Deciding which features to include in your MVP app can be challenging, especially if your concept is ambitious and multifaceted. Too many might slow down development and inflate costs, while too few may fail to address user needs. To avoid this, do your market research before starting and prioritize features based on the results.
Scalability concerns – Some startups overlook long-term scalability in a rush to launch an MVP. Don’t make this mistake. If your technology stack can’t support future growth, you might need a complete overhaul later. Be sure to work with an MVP development company that uses scalable architecture right from the start.

MVP vs. POC vs. Prototype — how to tell the difference

Not sure if you should use a proof of concept (PoC), a prototype, or a Minimum Viable Product (MVP)? All three have their place in iterative development and are crucial for learning and validation. Let’s look at how they’re different and when each is useful.

piece of cake, cupcake and whole cake illustrating prototype, mvp and product differences

A prototype has limited functionality and focuses squarely on testing a product’s usability. They’re mainly targeted at internal teams, stakeholders, and potential users during the early design and development stages.
An MVP has a different goal — to find product-market fit and refine the idea based on real-world use. It has full functionality and is intended for early adopters, potential customers, and investors.
Unlike prototypes and MVPs, a proof of concept (PoC) doesn’t require functionality — it simply illustrates the viability of an idea. It’s aimed at stakeholders, investors, and potential partners.

MVP vs. PoC vs. Prototype comparison table

	MVP	PoC	Prototype
Meaning	Minimum Viable Product	Proof of concept	Prototype
Target audience	Early adopters and early users	Stakeholders and investors	Early users, stakeholders, and developers
Purpose	A functional product that delivers value to users and validates the product’s viability.	A small-scale demonstration to verify the feasibility of an idea.	A representation of a product (like sketches or wireframes) for testing designs, getting feedback, and presenting to stakeholders.

How much does it cost to build an MVP?

When building an MVP, expect to spend between $100,000 and $300,000 for a commercial-ready product. However, that price can change depending on several key factors:

Your app’s complexity – Bells and whistles like AI, high-end graphics, and unique functionalities can drive up development costs. Complex backend integrations can also add to your expenses, especially if they require multiple third-party services.
Developer talent and skills – Hiring top-notch, specialized talent costs more upfront, but they can accelerate development and improve your MVP’s quality.
Development model – Do you plan to use in-house development, outsourcing, or nearshoring? Each model has its cost implications.

Outsourcing and nearshoring are often more cost-effective than building an in-house team. They give you access to world-class developers without long-term commitments or additional overheads. But if you want to keep all work and decision-making in-house but need extra help, staff augmentation may be the right fit.

Want to learn more about software development costs? Check out this post: How much does it cost to build a mobile app?

How to build an MVP

There are several main steps and best practices you should follow during MVP software development.

However, creating a minimum viable product isn’t always a straight line. Depending on what you’re building, you might go back and forth between these steps and spend more time on some versus others.

MVP development process

Here are the main steps in the MVP development process to act as a general guide.

1. Analyze your business needs

What problem are you trying to solve? Identify the specific pain point you want your MVP to address. Describe your target user’s characteristics, too. What are their behaviors, needs, and preferences?

2. Define your product’s core features and functionality

What features will directly address the pain point you identified in Step 1? Break complex features into manageable parts and plan for potential iterations. By prioritizing scalability, you give your MVP room to grow and adapt to changing needs.

3. Start designing

Develop a user flow and wireframe interface. Map out the key steps users need to take to achieve their goals within the MVP, then create a low-fidelity mockup of the screens and UI elements. Once completed, share the wireframes with potential users, ask for early feedback, and iterate based on their input.

4. Choose your tech stack

Does it make sense to use pre-built components and libraries to expedite development? If you’re building a mobile app, should you use native development or cross-platform solutions? Consider factors like your team’s expertise and development timeline when choosing languages, frameworks, and tools.

5. Design the MVP’s UX and UI

Focus on building intuitive navigation and clear calls to action. Follow mobile app design best practices for consistency and accessibility. This means maintaining a consistent visual language — including colors, typography, layout, icons, and interaction patterns — to create a sense of familiarity and reduce cognitive load for users.

Don’t leave anyone out. Abide by Web Content Accessibility Guidelines so that people with visual impairments, motor impairments, and cognitive differences can use your MVP.

Finally, conduct usability testing. Gather feedback from potential users to identify and address any usability issues.

6. Build the back end

At this stage, you’re ready to build your server-side infrastructure — the database, APIs, and back-end logic that power the MVP’s functionality. Choose technologies and architectures that can handle future growth. Encrypt sensitive information and follow security protocols throughout the process.

7. Build the front end

Implement the UI elements and interactive features based on the design mockups. Integrate the UI with the server-side logic to connect the front and back end and enable data exchange and functionality.

Once this is done, test and refine everything. Check for responsiveness and visual consistency across devices and browsers.

8. Run tests

Functional and regression tests can help you identify and fix bugs before launch. Conduct beta testing with a limited group of users to gather real-world usage data and feedback. You can then iterate and address any issues based on your results.

9. Launch

It’s finally time to send your MVP out into the world. Spread the word with a targeted marketing strategy and monitor user engagement and feedback.

And remember, this is just the beginning. Be ready to adapt based on what you learn!

MVP development best practices

Follow these MVP best practices to keep your development running smoothly.

Collect user feedback and use it to implement changes

Regularly run surveys, talk to users, and beta test your way to understanding what they really think.

Keep in mind that not all feedback is created equal. Tackle the big stuff first — the things that shape the user experience.

Keep track of key metrics

What matters to your MVP? Conversion rates? Session duration? Average revenue per user? Pick a handful of key metrics that align with your goals and keep a steady eye on them. Observe trends over time to spot new interaction patterns, peaks, and troughs in engagement or areas where users are dropping off.

Focus on essential features

Identify the must-have features that solve your core problem and resist the temptation to add more. A streamlined MVP is easier to manage and perfect.

Keep things simple (but still valuable)

Don’t strip your MVP down to the point of losing essential features or compromising user experience. After all, simple doesn’t mean crude.

Invest time in designing a clean, easy-to-navigate UI. Focus on clarity. Streamline processes and eliminate unnecessary steps to improve user experience. Use concise language to communicate your MVP’s value proposition and functionality.

Don’t be afraid to change course

Be open to what users say, even if it highlights weaknesses in your product. It’s okay to adjust your sails and change direction if needed.

Keep iterating

Success isn’t always linear. Building a successful app is about constant improvement, so continue looking for ways to improve your product. Rinse and repeat until you achieve your desired outcomes!

Cheesecake Labs: Your MVP development company

Looking to turn an idea into a viable, value-packed MVP? Let’s work together to build something awesome!

Cheesecake Labs offers MVP development services from Startups to Leading Fortune 500 Companies. Over the past decade, we’ve delivered solutions across different industries — including an IoT MVP for Thaw and a web MVP for Singularity University.

Whether you need full product delivery or staff augmentation, we can adapt our MVP development process to your specific requirements. You can count on our team’s technical skills and deep understanding of market demands.

If you’re looking to begin developing your MVP and need a reliable, experienced team to work with, get in touch, and let’s chat about your ideas!

About the author.

Marcelo Gracietti

Jumped drillships to join great friends on their amazing mission, exploring his developer/entrepreneur skills. Loves traveling and can cook a lasagna better than his grandmother.