MVP Development Guide for Business: Benefits, Types, Setup & Cost

20 January 2020 • 11 min read
MVP Development Guide for Business:  Benefits, Types, Setup & Cost
Andrii Horiachko
Written by Andrii Horiachko
Co-Founder and CTO at Softermii

The reason that many businesses and startups fail is that their ideas for products aren’t imperfect, but don’t entirely meet what customers are looking for. Sometimes it needs just a little rework on the product that it pulls ahead of the competition. Thus, the question arises on how to know in advance whether your future product will pull the market or how to make such a product that grabs the market.

That is where the concept of MVP development comes in. It can be helpful for startups, and for established businesses as well.

MVP, in this context, stands for a minimum viable product. It is a particular kind of development technique. MVP software develops sufficient features so that early adaptors are satisfied. The complete feature set is only designed and developed once feedback from the product’s initial users has been considered after the first version release.

Ensuring a product’s viability is probably the most vital aspect of the MVP development process. What a product does is more crucial than how it does it. That’s something that this technique always keeps foremost in mind.


Who Invented the MVP Development Technique?

The term “MVP” itself was first mentioned by Frank Robinson. However, it was two other well-known names in product design, Eric Ries and Steve Blank, who brought it into the public eye to a considerable degree and translates the idea of MVP development as smart learning on your product to improve its performance.


Why MVP Development is Important, and Its Benefits

You might think that MVP is not worth investments if you are planning to launch the full functionality of your product. Or you might be 100% sure that your idea will fit the users’ needs and distinguishes absolutely from the competitors. But almost 90% of all new startups fail under the newest SmallBiz Trends research. So, let’s cover the most widespread reasons on why this happens:

common startups fails

Source: CBInsights

Just keep in mind that most of these major reasons for failures can be resolved with building MVP before you release the entire functional product. And that thanks to the MVP benefits for business, that are:

  • Cost-effectiveness

    It is undoubtedly the most significant advantage of a minimum viable product. That is because you’re not sinking a great deal of money into the idea before you have any real knowledge of how the public is going to react to it

  • Viable product

    The MVP method ensures that the product is going to be viable once it hits the market. It is a way of being sure beyond a reasonable doubt that users are going to find it appealing.

  • Test your product on real market conditions

    The MVP method gives you the opportunity to enter the real market and field-test your research data. You can observe how your potential customers react to your product’s concept in practice. You can also learn whether the product’s features will truly solve an existing problem that your target user has. In marketing, this is sometimes called a “pain point.”

  • Minimum time to market release

    This is another reason that this method has caught on so much in the modern business world. If you are executing this technique correctly, you can get your product out there in a much shorter time. The development process is streamlined because you’re incorporating feedback each step of the way.

  • Early feedback

    That helps you to zero in on the necessary product improvements that your potential users might find objectionable. Part of MVP is listening to the complaints and suggestions of your customers. By doing so, you’re getting a jumpstart on evolving your product according to their expectations.

  • Possible investments

    After you incorporate an MVP program as part of your product development cycle, your business will receive valuable investments in the future of your product. You can even add further investors once the product comes to the market if some minor changes or additions are necessary. You won’t need to undergo the process of wholesale change that might have been required if you hadn’t undergone MVP development.

  • Building reputation & trust for your company

    Reputation building certainly plays a part as well. By using a highly-functional MVP program, you’ll be able to attract new investors that otherwise might have taken considerably longer to hear about you and what your company has to offer. It will not be as difficult to sell the capabilities and potential of each of your new products, because you will already have experienced significant successes.


How Does the MVP Process Work

Let’s give an example of an MVP product in action.

We’ll say that you’re developing a final product that takes an average of 6 to 8 months with a budget of $200,000.

You decided to develop the MVP version of your product with fewer functionalities. But the development process may take only 1 month or 6 weeks with a budget of $10,000 to $15,000.

As a result, you get that final product that’s market-ready.

Then you get the consumer feedback. Users of the product will either like it or they won’t. If it turns out that your product doesn’t appeal to them, though, then that time and money spent on development will have been wasted.

The MVP method tries to eliminate this possibility from ever happening.

It allows you to speed up the product’s launch because user testing is taking place before the finished product ever makes it to market. Once the essential features are in place, you get a round of feedback, and this continues as you go. Since you are inputting real feedback on the concept as you further develop the original notion, you’re looking at less money being spent, and usually less time as well.


Are MVPs Only for Startups?

Next, let’s discuss the common misconception that MVP programming only works with startups and fledgling companies. Nothing is further from the truth, though. The truth is that MVP is a great option for all: starting from startup to large corporations.

Whenever you are developing new products or new features for an existing product, you should always have a viable MVP program in place. This could start by releasing a basic version of a new product developed for selected groups of users to test. Like in case our team built MVP for Vidme to release and test in a short time the idea of a simple video sharing service.

MVP Types

There are several types of MVP set up for different purposes. You might have an MVP Android product that’s particularly cost-effective, or you might be designing one for iOS. Let’s discuss a few of the more popular ones.



Piecemeal is an MVP model in which the product is made from multiple sources. For example, an aggregator like Groupon would be considered a piecemeal MVP setup. Groupon takes deals from various sources and adds them to its platform. It works as an affiliate program and earns a small commission whenever someone purchases. All the deals are already available in other places besides Groupon, which means Groupon itself has not created any new deals of its own but gathered them in one place.

The other example is the Airbnb MVP model, where there was no smart website or mobile apps at all. Their website just allowed the options to choose dates, locations, prices, and the apartments.

Airbnb MVP model

Source: Waybackmachine

In this version, they focused on only one target audience tech conference attendees in one location. After having tested that, they got that the idea is truly successful

Therefore, this MVP model works well for startups that want to hit the ground running with a minimal budget.


Wizard of Oz

The Wizard of Oz MVP is devoted to test a large number of hypotheses on the product solution manually, find the best match and quickly adapt their product. This model shows that the startup has a feasible business model, even if their method of producing the products is unauthentic. The thought with this sort of system is that automation can be added later.

That means that your software needs look like real products, but you handle all your solutions functions manually.

A great example is Zappos. When they had launched the MVP, they had set up their website and performed all the other services like shipping manually until they saw the whole business model successful results.

zappos mvp


Concierge MVP

The Concierge MVP model is much like the Wizard of Oz setup but is purposed to test the product solution and generate more ideas on its improvement. However, where Wizard of Oz hides the work that is taking place behind the scenes, that is not the case with Concierge MVP.

The successful development of the Concierge MVP is the example of Food on the Table setup. The team behind the startup does not have an app or a web interface on the first stage. Instead, they got the idea of food delivery app development and decided to interview the first few testers. They ask them their “food preferences.” Then, they provide them a monthly list of recipes and grocery lists for a small subscription.


How to Construct an MVP Setup

MVP could be considered a product prototyping model. The most viable product often comes out of this system. Quite a bit of preparation is required if you’re going to try it for the first time. Let’s examine the usual MVP development process so that you have some understanding of the basics.

Image on MVP steps to add


Define Your Idea

In the early going, you should have a clear idea in your mind concerning the primary values you want your product to have. MVP product development is all about introducing those values to people to get their honest reactions. You must outline them, and then develop a viable MVP based on them.

The question you should be trying to answer at this stage is what needs the product fulfills or what problem it solves. This goes back to the “pain point” concept we mentioned earlier.


Research Your Market and Competitors

Before you plunge into the work by budgeting for it and creating prototypes, first you should be making sure that the public will be interested in your product. You could conduct surveys at this stage. The more information you have collected, the better your chances of success will be.

Tip: This is the point where you must ask yourself about the target audience. What are their problems and needs you might solve?

Here is a quick video to tells you about 5 easy ways to do market research.


Think About Design Process and User Flow

Next, you need to establish your product design process and user flow that comes from the first functionality you need to build in your product. In other words, think about how the client will use the app, assuming that is what you created. How will they launch it?

You’ll then go through the steps of how the user will interact with it, ending with the final step, which presumably will be purchase, delivery, etc. MVP technology is always going to be geared toward success in this area.

Thinking about user flow is critical. It allows you not to miss anything, and it ensures that your customer is fully satisfied. Identify your users and the actions they’ll need to take in order to reach a satisfactory conclusion, which would be them converting.

Tip: The question here should be how well designed your UX is, and how intuitive does it feel?


List the Project Features and Prioritize Them

At this stage, you will sit down and list all the features that you want to see in your product. Now, since you are developing an MVP, take a look at the list again and distinguish all the features that are not of primary importance. The concept of the MVP system means you should have the right number of product features to test, but none that are extraneous. That means that the finer design points and any add-ons can wait.

Next, categorize all the remaining features. Some will be must-haves. Others will be nice to have, but they won’t be absolutely necessary. A third category will be ones that you can discard. Once you’ve added all of the elements and features for each stage, you can draw a downward vertical arrow going from high priority at the top of the column to low priority at the bottom.

Once you’ve prioritized all the features, you can define their scope for the initial version of the product and move on to the building of the MVP.

Tip: You should answer the question of what one main action user needs to take and what features to build in your product to allow the user to complete this action.

If you want to see what your future product will look like.


Build Your MVP

Once you have determined the key features and learned about pressing market needs, you can first create an MVP prototype with which you will start to gather feedback. Whether or not you will choose to hire an MVP company or use your own people is something you will have to determine.

Anyway, remember, the prototype should not be of poor quality: it should still satisfy the user, even if certain elements are being held back.

The product should be easy to use. It should be visually appealing, and it should satisfy the main “pain point” that justifies its existence.

Tip: Here you need to answer whether your product resolves user main needs and whether or not it is scalable. If it isn’t, then you’ll need to go back to the drawing board.


Analyze and Repeat

After launching your MVP and giving it a trial run, you’ll need to analyze everything. And this is the main step of the MVP development, which is learning of the customers’ needs, feedback and risks evaluations of launching the entire product. So, it’s critical to understand the main purpose of MVP as Jeff Skinner explains in a brief video for the London Business School interview.

That includes initial user responses and then collecting additional feedback from your potential customers as to the effectiveness of the product itself. You might ask them whether they would be inclined to buy that product over one of your competitors, or what else they would like to see from it when it hits the market.

Collecting feedback for MVP app development can be divided into these categories:

  • Alpha Testing: this is sometimes called a “friends and family” release. Generally, you give an alpha build of your product only to a limited focus group consisting of friends and relatives.
  • Beta Testing: this is when the beta of product is going out to test the market. The beta testing period varies, but it usually takes 1–2 weeks to get sufficient feedback and results of your product performance. Based on that, you may decide what web tech stack is better to choose for your full version of the software or consider implementing some design changes in later versions.
  • A/B Testing of features or design elements.

But, unfortunately, all these things make no sense if nobody will know about your product and you will not get any opinions or results on its running. Of course, if your product is entirely original to the market and useful for customers, the word of mouth will do this job for you. So, comes in help this list of things to do to make the user be aware of your product, use it and leave your feedback on it:

  • Performance Marketing: this would be paid online and social advertising so that your users get to know about your product before it is in wide release.
  • Fundraising Sites: this is also a good option to not only show your product for users but to present it before the investors.
  • Explainer Video: might deliver great exposure for your product as video marketing is growing. In such a type of content, you can explain your product for users, engage them with motion graphics in your video and ask for their feedback on your solution. And the legendary example of this MVP marketing type is, of course, Dropbox explanatory video.

  • Preorder Pages: in other words, landing page presenting your product might also be a great marketing tool to introduce your product while offering some discount for the final project might be a good rewarding for asking users’ opinions.

At this point, feedback from the users is your key to success. It will help you determine which features to add next, which ones to eliminate, and whether your product has a reasonable chance of becoming popular. The question you want to be answered at this stage is whether you collected all the feedback necessary for full-cycle product development.


Tips for MVP Development

  • When dealing with MVP engineering keep in mind that your product should showcase its basic purpose and functionality.
  • Simultaneously time spent on development should be minimal.
  • The final version should not deprive your product of its unique selling points.

The more times you run through the particular MVP mobile app development process that works for your business, the better at it your team should become. As you go through it a few times, it will become more streamlined. Let’s say you’re a company that comes out with new websites, apps, or physical products frequently. In that instance, it shouldn’t take you long at all to become proficient at MVP web development, provided you have the individuals on staff that you need.


Costs of MVP Development

If you’re doing MVP web design, for instance, then the cost is going to vary dramatically depending on several factors.

For instance, the average price for MVP development if you hire freelancers can be as little as $4,000 for spearheading such an initiative, while they might want as much as $15,000 in some cases. If you go with a development company, they may ask for $20,000 for the project or as much as $30,000, depending on the scope of the work.

That might seem like a lot until you stop to consider that without the MVP process, the development lifecycle can cost you considerably more than that. One of the most significant factors that you will need to consider at some point is whether it is more cost-effective to assemble your own team and have them in-house or to outsource MVP development to other companies. Regardless of your decision, MVP is a truly robust tool to create like a beta version of your product, collect all valuable data and deliver the cutting-edge product in the final release to the market and customers.

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