Launching a successful product takes time and effort. But that doesn't mean you have to spend years perfecting something in a vacuum. MVP development helps you get the product into the hands of end customers in a shorter time, collect feedback, and iterate based on the real needs of your target audience.
As a software product development company with 14+ years in the market, we know a thing or two about the MVP development process and its inherent challenges. And we’re sharing our battle-tested tips, approaches, and best practices for MVP development in this article.
Key takeaways
- A minimum viable product (MVP) is an early product version that incorporates only essential features, allowing you to test your core idea with real users.
- The costs of building an MVP vary by project and are calculated based on the product's complexity, the number of features included, the tech stack, and other factors.
- Thorough planning is key for MVP development because it maximizes validated learning about customer needs, competitive features, and industry benchmarks.
What is a minimum viable product?
MVP, short for a minimum viable product, is the first, pared-back version of your app built to test whether the product idea can solve the exact problem the customer is faced with. It's that simple.
The concept of a minimal viable product originates from the lean startup methodology that focuses on validated learning and scalability-first development. Instead of spending months (or even years) building a feature-packed product that may not meet market needs, you focus on creating the smallest version that still clearly demonstrates your core value proposition.
What an MVP is not:
- An MVP is not just a product with features cut in half.
- An MVP is not a way to get your product out there as fast as possible (it doesn’t have to be a product at all!)
- And it’s not something you set and forget.
An MVP is a process that you repeat over and over again. At the core of the MVP development stage lies the idea of creating a product with only the essential features that should be enough to make that product functional and start gathering user feedback. Later, when early customers try the product, the product owner collects user feedback to make further integrations based on the needs of the target audience.
Based on feedback analysis, you can make an informed decision about the product's future: either scale up with the client's needs in mind or shut the project down at an early stage if the product doesn't appeal to its target audience.
MVP software development vs. PoC vs. prototype
Contrary to popular belief, a minimum viable product is not always a great starting point. In some cases, startups need another approach to reach their goals.
Proof of concept or PoC aims to verify that your idea is feasible in terms of technical implementation. A PoC is usually intended for internal use. Along with technical feasibility, startups can leverage a PoC to determine if a project is worth time, money, and resource investment.
A prototype is a visual, clickable representation of a product concept that demonstrates the user interface and interactions within the product. Prototypes provide a tangible way for startups to test user interaction, spot usability issues, and get early feedback from potential users. Startups can also use prototypes as a way to visually represent the idea and its potential to investors at an early stage.
An MVP is a releasable version of your product, complete with a must-have set of features that helps you gauge market response and see whether your target audience is willing to pay for it.
In short:
- Start with a PoC if you're unsure if the underlying technology can support your idea or need to identify the financial viability of your product.
- Build a prototype to refine the user experience and design of your MVP.
- Develop an MVP to validate your product concept with real users and gather valuable feedback to iterate and improve.
Benefits of building an MVP
Why launch a product with core features when you can offer target users a comprehensive bundle of functionality from the very beginning? Well, there are many reasons why startups and established brands build an MVP or minimum viable product first, including:
Idea validation
In a post-mortem of more than 100 startups, CB Insights discovered that the lack of market interest was the number one reason behind startup failure. A minimum viable product plays a crucial role in market testing, helping you achieve product-market fit by acting as a bridge between your initial concept and a successful product that clicks with your target audience.
Also, an MVP helps you identify potential issues early on and avoid costly mistakes further down the line.
Lower costs
Each additional feature contributes to more time and money for development. It's always better to prioritize features, implement the core ones, and enrich the MVP with additional functionality later to cut the initial development costs and reach the ROI earlier. With MVP development, you can build the simplest product version using the least amount of resources and get valuable feedback from early adopters.
Faster time to market
Full-fledged applications require a lot of time to develop. Relying on small MVP launches, where a product is tested and refined in a real market setting, helps your product hit the market faster and bring meaningful changes to the end users.
The same approach is manifested in creating an MVP. By building a minimum viable product, you can access the target market early, secure your place in the niche, and outperform your competitors.
Data-based scalability
You can't know for sure what features users want and need. Often, the target customers themselves don't always realize the pain points they want to fill with the product. An MVP allows users to try the mobile app early and leave feedback for you to build upon. Based on this feedback, you can make a more informed decision about further MVP enhancements.
Early marketing
It's never too early to start marketing. Early feedback from an MVP launch helps inform your marketing strategy by revealing what resonates with your actual users and what aspects of the product need further emphasis. An MVP also fosters an early marketing approach, allowing brands to engage with early adopters and build excitement in the final product.
Easier to get funded
In addition to the reasons below, there is an extra advantage for startups seeking funding. There are billions of ambitious startup founders who have a million-dollar business idea, but only a percentage of these founders will research the market needs and users' needs to work out a solid business strategy. Entrepreneurs who end up building a real product are even rarer.
Startups that move forward into developing an MVP tend to stand out, as they can prove that their idea can survive in competitive market conditions. Hence, investors are more likely to gain profit or at least reach an ROI. An increased likelihood of acquiring an ROI is a significant benefit of using an MVP, as 75% of venture-backed businesses never return cash to investors.
However, no approach is perfect, and MVPs are no exception. Limited functionality increases the risk of losing customers who are dissatisfied with the core functionality offered. To eliminate this threat, you need to think through the features you plan to include in your MVP so that your product solves a problem for potential users and all the features contribute to usability.
How to build a minimum viable product that gets results? Core MVP development steps
So, how do you build a minimum viable product? Don't rush into hiring the MVP software development team. Before you move forward, there are some boxes you should check.
Determine the problem
Every product is created for a purpose — to solve a particular problem. In other words, if the MVP doesn’t address a pain point (existing or perceived), users won’t care.
An existing problem
This type of problem refers to a challenge or pain point that a target audience currently faces. When developing a minimum viable product (MVP), identifying and addressing this problem is crucial for product success.
Flo is a prime example of an app addressing a real-world problem. By filling the void in women's health information, Flo has become a go-to resource for accessing, tracking, and gaining insight into women's personal health information. Today, Flo has over 380 million downloads worldwide and 68 million monthly active users. In mid-2024, it reached unicorn status.
An artificially created problem
This type of problem initially doesn't exist for the user. It's invented or exaggerated by the founders. While this may come across as counterintuitive, artificially created problems can work, provided they tap into latent desires or inefficiencies that users didn’t realize they had.
Usually, introducing a solution for an artificially created problem requires bigger marketing budgets since the problem doesn't yet exist in the minds of potential customers. Also, you have to think about user engagement upfront, as products based on artificially created problems can generate hype but struggle to retain users long-term.
The Yo app is one example of a product built around an artificially created problem. The app allowed users to send the word "yo" to friends as a simple notification, which is not something that necessarily requires a dedicated app. Anyway, the app launched in 2014 and went viral for a while, but quickly fizzled out.
Analyze the market
The next step is to conduct market research to assess the competition. You should know the competitive landscape and how your product stacks up against existing solutions.
High competition means that you need to stand out from an array of similar products — either by distinguishing your product through a better design or through advanced functionality. Alternatively, the key to success may be offering a new solution to an existing problem.
Although your initial focus should be on the primary market, don't forget to analyze secondary and international markets, too. Adopting a global mindset early on will help you reduce the risk of failure in foreign markets if you decide to expand in the future.
Define your target audience
At this stage, you should define your target users and lay the groundwork for an early marketing strategy. To do that, you need to create a detailed buyer persona that goes beyond basic demographics like age, sex, and location.
To attract early evangelists, you can create and promote a landing page with a detailed product description. On your landing page, have an area where early adopters can leave their phone number and email address.
Determine a business model
In the context of building an MVP, a business model can be defined based on the three components:
- Value proposition — The value proposition is a concise statement that clearly articulates the benefits a customer will receive by using your product or service. It's crafted by considering three key factors: the problem being solved, what sets your solution apart from market alternatives, and the target audience.
- Monetization — Monetization affects the app functionality and the overall concept. Even if you are not planning to generate revenue from MVP 1.0, you should think through your monetization strategy while your app is still in its infancy — otherwise, you risk facing costly redesigns later.
- Distribution — Before you start building an MVP, think about how you want to distribute the product. Find the most cost-efficient and direct ways for your product to reach the end user.
Identify a user flow
A user flow is a detailed roadmap that outlines the steps a user takes to achieve a specific goal within your product. It starts from the user's initial interaction (e.g., landing on your website) and follows them all the way to a successful outcome (e.g., completing a purchase). For example, in pharmacy applications, the primitive user flow typically looks like this:
Of course, each step listed above includes sub-steps, like searching by medicine name or checking nearby pharmacies, which sometimes makes a user flow challenging to define.
List the essential functionality
In minimum viable products, the main focus is on the stripped-down set of features included in the initial launch. There are several methods to determine which functionality should be included in MVP 1.0. At Orangesoft, we use the feature prioritization approach to nail down the essentials.
Prioritization starts once your development team has created a backlog of all possible features. Each feature is then assessed and categorized based on its priority and value:
- Influences value;
- Might influence value;
- Doesn't influence value.
Functionality that doesn't influence the app's value can be put on the back burner. The features that might add value should be kept simple or adjusted. For example:
- Instead of offering logins for all social networks, you can choose the most popular social network among your target audience. Alternatively, you can limit logins to email-only or phone authorization.
- Instead of a separate page for feedback, leave an email address so users can send their feedback or provide a pre-filled feedback form.
Planning the MVP development
Before you start to create an MVP, you need to determine whether you will develop your product in-house or turn to an app development agency. To make the right call, consider available expertise and budget. Then, start working out more in-depth development details by answering the following questions:
- Who will be included in the app development team?
- Does your product idea require further exploration?
- Who will create the app's design?
- Will you pursue native or cross-platform development?
- How will the testing phase be carried out?
A successful MVP development process is one that is fast and cost-effective, without undermining the product's quality or the project budget. So, whether you're building in-house or outsourcing the development process, you need the product discovery stage to lay a solid foundation. Product discovery helps the team identify product specs, software requirements, core product features, and the optimal tech stack.
Minimum viable product development
Once you've addressed key questions, the MVP app development process begins. Usually, MVP development follows an iterative approach, where your team gradually builds up a product by performing multiple cycles of refinement. To make sure you're on the same page with your team, schedule bi-weekly check-ins to monitor development progress and identify any potential roadblocks.
During development, product owners are usually tempted to add bells and whistles to perfect the product, especially if the budget is loose. However, adding more features is the wrong approach because doing so undermines an MVP's philosophy.
If you can afford extra features, reference your list of optional functionality from the planning stage, but don't get carried away. Remember: the MVP's main priority is rapid validation.
Testing and quality assurance
In parallel with development, your testing team validates the delivered functionality to ensure it meets the initial requirements.
The steps for effective planning and execution of MVP testing are:
- Define your testing goals and objectives, including success criteria.
- Develop a testing strategy that outlines your testing methods.
- Draw up a test plan that specifies the strategy, objectives, resources, and processes for a particular testing activity, including the scope of testing, testing schedules, pass/fail criteria, and other considerations.
- Create clear, well-defined test cases that identify a particular scenario or condition to be tested within your MVP.
- Choose an optimal approach to testing: automated, manual, or a combination of both approaches.
- Conduct a variety of tests (usability, performance, security) to assess the MVP's functionality under diverse user conditions and on different devices.
- Analyze test results to identify areas for improvement.
Skimping on testing and quality assurance is a hard no for startups, as these activities help pinpoint areas where the user experience is clunky, confusing, or frustrating. Additionally, user testing sessions offer valuable insights into user behavior and pain points, while also helping to double-check your security and compliance posture.
Launching your MVP
Now comes the exciting yet potentially nerve-wracking moment of truth: launch day. The launching process includes the following steps:
- Making your MVP available to your target audience through your chosen platform.
- Monitoring your MVP for errors.
- Implementing your pre-planned strategies to attract users and encourage them to try your MVP.
- Using analytics tools to track user behavior within the MVP.
- Carefully reviewing all user feedback and analyzing usage data to identify common themes, pain points, and areas for improvement.
You can turn to a soft launch approach to minimize the risk of launching, optimize your marketing expenses, and test-drive your monetization. This approach includes a limited release of your MVP before the full-scale public launch.
How much does it cost to build an MVP?
The inevitable question of costs is one of the primary considerations for MVP owners. We at Orangesoft have delivered over 300 projects across industries and know firsthand that estimates always vary.
The cost of creating an MVP depends on the app's complexity, the number of platforms and features, the development timeline, and other cost drivers. Let’s estimate an MVP using one of our projects, a workout app, as an example.
| Feature | Development time, hours | Backend development time, hours | Approx. cost, $ |
|---|---|---|---|
| Sign in / Sign up | 42 | 32 | 3700 |
| Adding personal info | 32 | 16 | 2400 |
| Profile | 56 | 18 | 3700 |
| Home screen | 72 | 32 | 5200 |
| Workouts | 96 | 56 | 7600 |
| Nutrition | 96 | 40 | 6800 |
| Dashboards / Reports | 96 | 72 | 8400 |
| Notifications | 24 | 20 | 2200 |
| Subscriptions | 56 | 56 | 5600 |
| Architecture | 56 | 32 | 4400 |
| Server interaction & API | 46 | – | 2300 |
| Database | 24 | 16 | 2000 |
| Admin panel | 156 | 110 | 13300 |
| Total | 756 | 460 | 60800 |
Based on our estimates, developing an MVP for a workout app will cost you around $60,800. Keep in mind that this estimation includes basic costs related to the development stage.
You’ll also need a team of business analytics, QA engineers, designers, and project managers to get your MVP up and running. These activities are priced separately and aren’t included in the estimation above. You can contact our team to get an accurate estimate.
At Orangesoft, we optimize your MVP development costs by leveraging pre-made design components, UI libraries, code modules, AI models, third-party libraries, and APIs that are suitable for your project.
What to do after an MVP launch?
Launching an MVP is not the finish line; it’s the starting point for a continuous cycle of improvement. After launching your MVP, collect real-world feedback and extract insights to inform further iterations.
During the feedback stage, you should work with a test group to collect meaningful insights about the product's strengths and weaknesses. For example, you may want to survey a test group on what they would like to see in future versions of the application.
Once your product has picked up enough traction and a solid user base, you can scale it and transform it into a full-fledged product based on the insights you've collected. Here's what ‘scaling an MVP' includes:
- Refining your product vision and prioritizing the next releases based on user feedback and market data.
- Bringing in tech talent aligned with growth objectives.
- Adjusting the product’s architecture and code so it can handle increased user demand.
- Scaling testing efforts to cover the growing product functionality.
- Making adjustments to your product’s monetization model.
By following these steps, you can transform your MVP into a successful, growth-ready product.
Measuring success after building an MVP
Key performance indicators, or KPIs, will help you measure the success of your product after the big rollout. Below, we've curated a list of essential metrics to track.
Number of downloads
App download data is probably the easiest way to track the popularity of your minimum viable product. As the name implies, this KPI is related to the number of times an app is downloaded. You can fetch this data from the app marketplace or use a standalone analytics tool.
Percentage of active users
Daily active users (DAU) to monthly active users (MAU) is a popular metric used for tracking user engagement. Essentially, it's the proportion of your daily active users over your monthly active users, expressed as a percentage. Your definition of active can be based on app login or any other activity that brings value. You then need to divide DAU by MAU to get the ratio percentage. The rule of thumb is that your apps need to have a 20%+ percentage of active users.
Percentage of paying users
This metric helps you tap into the number of users who convert post-install. The percentage of paying users is estimated by dividing the number of unique paid users on day X by the total number of customers who installed the app X days ago.
Average revenue per user (ARPU)
Another indicator of the product's profitability, the average revenue per user (ARPU), equals the average revenue made from each user. The percentage can be calculated by dividing the total revenue generated by the number of app owners.
Churn rate
The churn rate is another measure that should be tracked, especially if users pay on a recurring basis. If customers don't stick around for too long, you won't be able to make up for your average acquisition cost, which in turn means that your product is losing revenue.
Churn rate quantifies the percentage of service subscribers who:
- quit their subscriptions within a given period, or
- uninstall or walk out of an app over time.
Abandonment rate and app churn can be used interchangeably. This app metric is usually calculated 30 days, 7 days, and 1 day after users download the app for the first time.
The most basic calculation is to divide the number of lost users by the total number of users at the start of the period and multiply the number by 100. For example, if your application had 5000 users at the beginning of the month and lost 140 users by the end, you would divide 140 by 5000. The answer is 2.8%.
User ratings
Ratings and reviews allow you to look into the customer sentiment about your MVP. Users typically leave ratings and reviews on app marketplaces to give feedback on their experience with an app. Ratings improve your app's discoverability, promote downloads, and create connections with customers.
Also, this metric helps you plan further improvements to your minimum viable product and gives you a better idea of the ideal feature set.
Customer acquisition cost (CAC)
CAC measures the total cost of acquiring a single user for your app over a specific period. Customer acquisition cost reflects your marketing performance and the effectiveness of your marketing spending and development efforts.
To calculate CAC, you need to summarize the costs of acquiring new users and divide this total by the number of users acquired over the defined period.
Customer lifetime value (CLV)
Customer lifetime value is the total amount of revenue a single app user can generate over the entire period of their relationship with your application. Unlike the average revenue per user, this indicator takes into account both the direct revenue and the indirect value a user generates.
This means that CLV will be based on all transactions a customer conducts over a given period, such as in-app purchases, subscriptions, ad impressions, and others, as well as an indirect value, such as the number of users a given customer refers to your app.
What is the secret behind a successful MVP?
Based on the best MVP practices, we can determine the following five criteria when defining a successful MVP development process:
- Early planning — The more time you devote to planning, the fewer mistakes you make down the road, and the less time and money you spend.
- Data-based approach — An MVP and its future updates should be backed up by data to reduce the risks of insufficient market fit and unnecessary functionality.
- Proper marketing — Your audience should anticipate the launch; therefore, you need to devote a significant amount of resources to marketing.
- Only essential features — Don't try to stuff your MVP with every possible feature. Lead with the essentials instead.
- Skilled development company — Having a skilled team helps to guarantee a flawless application and faster development.
If you keep these criteria in mind, building an MVP at reduced costs can be possible within a short period.
Stop guessing and start growing
All great things start from small beginnings. You don't have to jump into full-fledged mobile app development to take the market by storm. You can start with an MVP, test the viability of your business idea, and build from there.
At Orangesoft, we follow a calibrated MVP development process designed to maximize your chances of achieving product-market fit. Here's what sets us apart:
- Focus on cost-efficiency: Whenever possible, we use pre-built components to reduce the costs and speed up development.
- Security- and compliance-first approach: We adhere to the security-by-design approach, making sure your product meets industry standards and regulatory requirements (HIPAA, GDPR, PCI DSS, and others) from the very beginning.
- SDLC built around international standards: Our development process is structured and documented in line with ISO/IEC 12207 and ISO/IEC 27001 guidelines.
- Networking opportunities: We help you connect with the startup community and engage in new partnerships through our global network. Focus on growing your business while we’re busy developing your MVP.
If you need a trusted, full-cycle development team for your project, we're along for the ride. Contact us for a free estimate of your MVP development.