Why do startups need to start with a MVP?

Uchitha Hettiarachchi
Tuesday, October 12, 2021
Founder/ Creative Director @Xentury

In an era where technology allows us to work comfortably from our homes, startups are increasingly capturing the attention of the younger generation. Yet, the challenge of operating on a tight budget, with limited resources, and the high risk of failure, has brought the concept of the Minimum Viable Product (MVP) into the spotlight. This article delves into why MVPs are crucial for startups and how they can be a game-changer in achieving success.

What is an MVP?

An MVP is a basic version of your product, designed with just enough features to capture the interest of early users. It’s not about making a profit right off the bat but about gathering valuable data on how customers use and react to your product. This approach allows for incremental improvements without the need for a full-scale development from the start, saving time and resources on potentially unsuccessful projects.

The right understanding of MVP

At its core, an MVP tests the waters to see what works and what doesn’t, aiming to understand how well the product fits in the market. The feedback from early users is invaluable, providing direction and insight into what the future full version should look like. Among the benefits of starting with an MVP are:

  • Identifying the right product/market fit
  • Setting clear product development milestones
  • Formulating a monetization strategy
  • Ensuring cost-efficiencyFostering a connection with users
  • Testing the user experience (UX)
  • Enabling a faster launch with ongoing updates based on user feedback
  • Minimizing risk while operating within resource constraints

Successful startups such as Facebook, Spotify, Airbnb, and Dropbox provide compelling evidence of the MVP approach's effectiveness. These companies started with basic versions of their products, focusing on core functionalities that met early user needs while allowing for scalability and iteration based on user feedback.

Facebook began as a simple social networking site exclusive to Harvard students. Its initial MVP focused solely on connecting students within the university. By prioritizing simplicity and specific user needs, Facebook was able to gradually expand, adding features based on user demand and scaling to become the global social media giant it is today.

Spotify started its journey by addressing a specific challenge: making music accessible and legal to stream online. Its MVP offered a limited library of tracks and was initially available to a small user base in Sweden. This focused approach allowed Spotify to refine its streaming technology, secure necessary music licenses, and evolve into one of the world's leading music streaming platforms.

Airbnb emerged from a basic need for affordable accommodation. The founders' MVP was a simple website offering short-term living quarters for attendees of a design conference in San Francisco. This rudimentary start helped validate the demand for alternative lodging options, leading to the development of a platform that revolutionized the way people travel and experience new places.

Dropbox countered the complexity of online file storage with an MVP that was essentially a demo video explaining the concept. The overwhelming interest generated by this video demonstrated the demand for a simple, user-friendly solution to file sharing and storage, guiding the development of Dropbox’s intuitive drag-and-drop interface and seamless syncing capabilities.

These startups illustrate that an MVP need not be perfect or feature-rich but must solve a core problem effectively. The journey from MVP to a full-fledged product involves learning from user interactions, refining the product offering, and gradually incorporating features that align with user needs and preferences. This iterative process, powered by direct feedback from early adopters, is critical to achieving product-market fit and scaling successfully.

Seven key steps to creating an impactful MVP:

1. Define Your Goal: Begin by asking critical questions about the needs your product addresses. What specific issue is your product solving? Who is facing this problem? Understanding the problem in depth allows you to design an MVP that offers a practical solution, aligning your product's development with real user needs. This step sets the direction for your entire project, ensuring every feature added contributes to solving this core issue.

2. Conduct Market Research: This involves collecting data through surveys, interviews, and analysis of market trends to understand what your potential customers are looking for in a product. It also includes analyzing competitors to identify gaps in the market that your MVP can fill. This research helps validate the demand for your product and guides the selection of features that will make your MVP stand out.

3. Identify Your Target Audience: This step is about narrowing down the demographics, behaviors, and needs of your potential users. Knowing your target audience allows you to tailor your MVP's design, functionality, and user experience to match their expectations. It's crucial to create user personas that represent your ideal customers, enabling you to make decisions that resonate with your actual users.

4. Analyze Competitors: Analyzing your competitors involves identifying their strengths and weaknesses, understanding their strategies, and learning what customers appreciate about their products. This knowledge helps you to innovate and offer something unique or improve on existing solutions. It's not just about what your competitors are doing right but also about the opportunities they've missed that your MVP can capitalize on.

5. Map Out User Flow: Mapping out the user flow involves creating a visual representation of the steps a user takes to complete a task or achieve a goal in your MVP. This step is crucial for ensuring the product is accessible and easy to use. By eliminating unnecessary steps and simplifying the process, you enhance user satisfaction and increase the likelihood of your MVP's success.

6. Prioritize Features: Start by listing all the features you think your product could have, then identify which ones are absolutely necessary for solving the core problem your MVP addresses. These become your priority features. Additional features are then ranked according to their importance and potential impact on user experience. This prioritization ensures that development efforts focus on what's truly essential for your MVP, avoiding feature creep and keeping the project on track.

7. Launch Your MVP: With the essential features developed, it's time to launch your MVP. This launch is not just about making the product available but also about ensuring it's user-friendly, aligns with customer needs, and provides a valuable solution to the problem identified in the first step. The launch should be accompanied by strategies for collecting user feedback, which will be crucial for iterating and improving your product in subsequent versions.Each of these steps requires careful thought and planning, as they collectively lay the groundwork for a successful MVP that resonates with your target audience, addresses a real need, and stands out in the competitive landscape.

Each of these steps requires careful thought and planning, as they collectively lay the groundwork for a successful MVP that resonates with your target audience, addresses a real need, and stands out in the competitive landscape.

Testing the MVP, Conducting User Tests, and Gathering Feedback

The phase following the MVP launch centers on rigorous testing, including conducting user tests and collecting a broad spectrum of feedback. Testing the MVP with actual users in controlled scenarios allows for an in-depth understanding of its usability and functionality. User tests can vary from structured experiments where tasks are defined, to more open-ended sessions where users interact with the product under observation. This approach provides direct insight into how users navigate the product, uncovering usability issues and areas for improvement that might not be evident through quantitative data alone.

Quantitative feedback encompasses metrics like user retention rates, daily active users, and conversion rates, which illuminate the MVP's performance from a numerical standpoint. Qualitative feedback, gathered through interviews, surveys, and user reviews, adds context to these numbers, offering a deeper understanding of user behaviors, preferences, and the overall experience with the product.

Iterating based on this comprehensive feedback—balancing what the numbers show with the rich narratives provided by users is key to refining the MVP. This process of continuous iteration involves analyzing feedback to pinpoint trends and issues, then prioritizing modifications that promise the most significant benefit to user satisfaction and engagement. Such a disciplined, iterative approach, fueled by both quantitative metrics and qualitative insights from user testing, guides startups in evolving their MVP into a fully-fledged product that not only fits the market needs but also delights users.

Beyond the MVP

After launching an MVP, the next steps might include evolving it into a full product release or developing a Minimum Marketable Product (MMP) - a version that’s closer to the final product but still focused on core functionalities that attract early adopters. Monitoring metrics such as customer lifetime value, acquisition costs, churn rate, and sales figures, along with responding to feedback, is key to this phase.


For startups venturing into new markets, starting with an MVP is a strategic move that conserves resources and provides a solid foundation for future development. While initially not aimed at generating profit, a successful MVP can lead to a valuable final product that significantly benefits the company.At Xentury, we're experts at helping businesses create their first product versions, making sure they're simple yet powerful. Our team is all about using the latest methods and giving you personalized attention, making sure your great ideas truly come to life and succeed. Choosing Xentury means more than just getting help; it means partnering with someone who really wants to see your vision turn into a success. Reach out to us, and let's start making your dream project a reality. Together, we'll create something amazing.

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