How to Build a Minimum Viable Product (MVP) for Startups: The Ultimate Guide

Article by
Anton Oparienko
12 min read
MVP is a common term today that is familiar even to those who are not engaged in the product development sphere. In this article, we will shed more light on the MVP development process, talk about its business benefits and answer the question “How much does an MVP development cost?”

MVP, or Minimum Viable Product, is a common term today that is familiar even to those who are not engaged in the product development sphere. Using an MVP is a successful strategy, as it gives every startup a chance to present itself to the public and win over an audience; besides it helps to cut down on expenses and attract investors to the project.

According to statistics, up to 90% of startups collapse. About 10% of them quit during their first year, and up to 70% would not survive between their 2nd and 5th years. The most common causes for this are as follows:

  • misunderstood or under-studied market needs (about 40%);
  • ending budget (30%);
  • the competitors who succeed more (20%);
  • marketing, pricing, design issues (10%).

MVP development is a good way for startups to avoid these dangers and bring the project to fruition. Let’s figure out what Minimum Viable Product is and how to build an MVP that rocks.

What Is an MVP in Product Development?

The MVP meaning can be briefly described as follows: this is a product’s test version including a few critical features that proves to be attractive for an end-user.

The MVP development process is usually split into several stages and can be performed using diverse software development methodology and techniques. The final aim of MVP development for a startup is:

  • verifying the product’s viability;
  • noting its strong and weak features;
  • and examining the reaction of the intended audience to the product.

Thus, the main MVP features that will lead the product towards prosperity are its lower costs, faster development, and real consumer feedback. An MVP can take the shape of a web or landing page, a custom web application, a program or even a physical form.

The feasibility of MVP has been well proven by such giants as Spotify, Amazon, Airbnb and many other large and small startups that had a good product idea and developed it to a bestseller choosing the strategy that paid off.

Why Do You Need a Minimum Viable Product?

An MVP is a powerful tool at the beginning of a product development process. Creating a minimum viable product at the start of a development lifecycle will show you whether your idea is as worthwhile as it seemed to you and what direction is safe to move further as you try to find product-market fit.

As a rule, a product, whether it be an app, tool or service is intended to meet the consumers’ demand and solve some of their problems or improve their everyday life by means of this particular product. MVP development is the key to establishing connections with the target audience at lower costs and speed up the product delivery.

MVP Development Benefits for Startups

The MVP benefits are closely linked to its main goals and features. We’ll consider them in detail and state how MVP will work out for a project.

Benefits of an MVP for startups
  • Detailed analysis of your product based on customer experience. Customer feedback is priceless at this point, as it gives you an opportunity to identify the most and least appealing points of your product or service to make it eventually competitive. 
  • Possibility to attract investors. You will attract potential investors that are more likely to be involved in a project that is already touchable rather than a concept detached from action. 
  • Testing stage. The reversibility is also one of the key factors that determine the popularity of MVP development for a startup. I.e., it is much easier to eliminate the functions that prove to be unnecessary, fix the bugs or add new features in the process of QA testing the product’s usability. This flexibility helps to implement updates smoothly and bring the release closer. 
  • Cost-effectiveness. A lot of startups have been damaged by inefficient financial planning. MVP development helps to reduce the costs and redistribute the funds if needed and eventually minimize the expenses of a final product.

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How to Build an MVP

The MVP development process is deeply structured and is split into visible milestones. The moment you realize that you need to elaborate on the idea it is time to shift to the practical part.

Here each step should be defined with relevant tasks assigned to the team members. Now let’s dwell on each stage in detail.

Do the Market Research

The very first and extremely significant stage of MVP development is analyzing the market you want to enter. You must analyze the following data:

  • the audience’s needs and demand, customer behavior;
  • main tendencies at the market;
  • price level and rate of return;
  • advertising and promotion.

You need to go through proof of concept (POC) and decide how your product will stand out among the others and facilitate the client’s everyday routine.

Narrow Down Your Key Audience

Yes, this is true: instead of trying to cover most of the population, you should try to narrow down your target group. When you build an MVP, your desire to make the end product popular among 100% of humanity is quite understandable. But this is not a viable option and it might ruin the whole project with inevitable financial losses and burnout of you as a project owner.

So concentrate mainly on those people who will be eager to purchase and use your product because they need it. At this and the next stage you will need to deeply  analyze the target audience. It will both be helpful in the MVP creation and during the promotional campaign.

When defining who your potential clients are stick to the main points:

  • their age, gender, place of living, marital status, occupation;
  • their paying capacity;
  • the type of gadgets they prefer;
  • how the problem your minimum viable product will be solving is correlated with them.

In the end, you will get a portrait of your average product consumer.

Define Your Vision of the Project

This step is preliminary to specific actions but it affects the whole procedure of MVP development. Is it highly recommended to conduct one or several meetings where all the major principles of the project will be discussed and the action plan is to be created.

  • Stay focused on the costs and devise your own strategy of using a reasonable quantity of time, effort and funds. 
  • Stick to the key functions of the minimum viability product and direct the majority of your resources on their development. 

During the MVP development process you will need the client feedback that will impact your end product. Prepare for collecting it in advance. Here are some tips:

  • Make sure all the necessary channels of communication are defined and set up. 
  • Think of promotion methods that will push the newborn product ahead. Landing pages, social networks, and contextual advertising will greatly assist with this matter. It is worth considering to organize a fundraiser on a platform like Kickstarter. 

While discussing the future minimum viable product make sure each of your responsible team members is involved in the discussion and has shared his/her vision of the product, MVP features, and the funds distribution. A varied web development team can bring in many expert insights.

Assign Value

To meet the consumers’ demands, your minimum viable product is supposed to fix some problem or take their existing experience to a brand new level. Define which solution the MVP will offer to the target audience and how it will hook the clients up. For instance, an audiobooks player can have the following selling points: 

  • support different file formats;
  • synchronization between a user’s various devices; 
  • timer, night mode settings, etc.

Think of what makes it unique or way ahead among the benchmarks and concentrate on this feature complex (this will be also helpful for product promotion). 

Make sure all the useful insights are carefully documented so that in the future you could understand where the concept had stemmed from.

Monitor Your Rivals

Despite the fact that each product is special in its own way, it must be acknowledged that no product can be 100% without match. It might be distinctive and outstanding but there will always be competitors wishing for their piece of the pie. Analyze your future competitors and put the collected data into a spreadsheet. 

What do you need to know about your competitors? Make sure you have checked for the following: 

  • their website; 
  • their social network webpages;
  • their activities in the mass-media; 
  • their participation in professional exhibitions, etc. 

This will help to estimate your product compatibility and avoid exaggerated expectations.

Define Your MVP Features

Before moving on to practical steps, pick several main features that will become the core of your minimum viable product. Set up the list of functions and work on feature prioritization

Development of a minimum viable product usually includes a limited amount of the most necessary functions. Those are the backbone of an MVP development for a startup. Define them and complement them with a list of additional features and adhere to the resulting framework.

Map Out User Flow

Create a user path map: you need to anticipate their user experience and help them realizе how to interact with the MVP in an effective way. Build A User Flow Diagram that will let you analyze whether your interface is intuitive enough for clients, how they reach the needed information or features and if your and your clients’ vision of the product match. 

As for the design of the MVP, there is no need to make it perfectly polished. At this point, the UI/UX design must conform to the core features of the MVP and be simple and intuitive. Use a click-through prototype that will demonstrate to users what the final product will look like.

Develop and Test

As soon as all the possible information has been collected and deeply analyzed, it is time to start the MVP development process. 

Analyze the strong and weak sides of your minimum viable product along with the ways to achieve and avoid them respectively. Choose your management and development technique and proceed with testing. Pay attention to risks, both internal and external.

Work on Feedback

After the launch of the MVP it is essential to continue with MVP testing and analyze the reviews received from users. Mind those mentioning the interface and usability, the list of functions, design and the customer experience on the whole.

Did they enjoy using the product? Are they likely to recommend it to their friends, colleagues, etc.? Is it worth its price? Which features should be added/removed? The opinions can be diverse and individual and it is better to concentrate on some recurring issues and improve the product based on them.

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MVP Development Cost

Now, when we’ve explored in detail how to build an MVP, it is time to estimate the price and timing of a minimum viable product. Our team at Upsilon provides various solutions for clients in different domains, e-commerce is one of them. So, we decided to answer the question "How much does MVP development cost?" on the example of marketplace development.

Please keep in mind that all estimations are rough. The MVP development cost and timing may vary, depending on the unique requirements of every solution, even in the case of feature similarity. If you want to get an accurate project estimation of your future project, contact our business development specialists for a consultation. 

For project estimation, we use the PERT (Program Evaluation and Review Technique) method. It includes three points of estimate: Pessimistic, Realistic (it can be also called the most likely case estimate), and Optimistic. An average expected estimate is calculated by taking a weighted average of these three points of estimation using the formula:

(optimistic + pessimistic + (4 x realistic))/6 = expected estimate 

For our marketplace estimations, we defined the MVP essential features and calculated the development time based on the PERT method. The result of such estimations is presented below: 

Marketplace estimation by PERT method
Marketplace estimation by PERT method

*FE - front-end, BE - back-end

The approximate duration of the project from the discovery phase till release is 6 months, considering one back-end and one front-end developer.

We also included a QA engineer, UI/UX designer and project manager in our estimations, along with programmers. We highly recommend not to skimp on these specialists. QA engineers guarantee the product quality during the whole development lifecycle and project managers provide the day-to-day management of the project, making sure that communication between client and the team is going smoothly. With a well-formed team, the questions on how to build a minimum viable product and how to make it effective will be solved.

Thus, regarding the workflow details and team composition, the rough MVP development cost will be around $80,000 for a marketplace. Rendering software development services, we can also guarantee on-time delivery and high quality of the built product.

Minimum Viable Product Examples

Minimum viable products have been the initial part of a lot of successful startups so far. We have compiled the most remarkable cases for you to realize the huge potential of MVP implementation.


Back in 1999 Nick Swinmurn, the founder of Zappos, was enlightened with the idea of launching a shoe online-store. As there was no certainty that the startup would pay off he decided to begin with no inventory at all. He had no shoes but pictures of them that he placed on the website. As soon as an order was made the needed pair of shoes was bought by him and shipped to the customer, as simple as that. Thus Nick Swinmurn minimized his financial risks in case the shoes would not sell well and had a nice opportunity to test his MVP.

This particular case is an official start of what an MVP is considered now. Zappos was eventually acquired by Amazon for $1.2 billion and is continuing its work as an Amazon subsidiary.

Zappos MVP, all the way back from 1999
Zappos MVP, all the way back from 1999


In 2008 a couple of enthusiasts were not satisfied with the situation around cabs in San Francisco. The price per trip was high and there were no alternatives to affect the cost. Garrett Camp and Travis Kalanick, the inventors of Uber, launched an MVP app that was available in San Francisco only with very limited functionality. But this was already enough to prove that the idea was brilliant. Today Uber is a widely-known prosperous company that has also provided lots of people with a profound cab service.

UberCab’s interface
Here’s what UberCab’s interface looked like after a few iterations in its beta launch


It seems hard to believe but such a media giant as Facebook originally started as a small project of two former Harvard students who just wanted to create a website where people could join groups of interests and exchange their thoughts with each other. Mark Zuckerberg and Eduardo Saverin wanted to take into account all of the social media network inefficiencies and provide users with what they really needed. Another important part of it was the necessity to reduce risks and costs, thus Facebook was launched as a small website available for students but quickly made it to the top where it remains for now. 

Facebook's MVP
Facebook's MVP

All these minimum viable product examples represent the main idea of MVP development for a startup: you can launch your project having only your idea and a temporary limited set of functions without spending a fortune on it. If it is what your target audience really wants, you will succeed. But it’s not always this way.

More examples of the MVP-based companies

Reasons Why Some MVPs Fail

Regretfully, not all MVPs succeed. The list or reasons for that can be large, sometimes even small factors matter greatly. Here is a brief overview on the most typical and crucial mistakes startups make during the MVP development.

  • Incredible perfectionism. Your MVP must be well balanced and attractive to users but it doesn't have to be ideal, so do not fixate on minor imperfections.
  • Not enough feedback. Customer experience must be your primary guidance during the MVP development. If it is neglected, you will fail in meeting the clients’ needs. 
  • Lack of analysis. Do not underestimate the power of analytics. Such product performance metrics as the numbers of downloads, purchases, the amount and mood of the reviews reflect the clients’ opinion on the product and its market position. If it looks bad, it is time to take action before thing become irreparable. 
  • Timing errors. It should require up to 5-6 months for the MVP development process. Too early or too late releases can spoil the result, hence the terms should be reasonable.
Reasons Why Some MVPs Fail

Things to Consider When Developing an MVP

No matter what MVP development services you choose there are some guiding lights that can simplify the process a bit and provide you with the basis for further work on the product and its expansion. Here are some tips for startups for a smooth MVP development.

More Feedback

It is worth mentioning again that feedback is vital for a minimum viable product. Urge your clients to speak up: conduct research, segment your target groups and identify their needs. The more good questions you ask, the better answers you’ll receive.

A/B Testing

A/B testing is a smart tool that will help to choose the most reliable MVP features. Equip your product with two options of similar items, e.g. buttons, pop-outs, etc., then compare them and pick the most preferable one.

Pay Attention to the Platform

It would be wise to build an MVP available at both Android and IOS platforms if you aim your end product to develop a large audience, so think of both options in advance. A small landing page would be helpful, too, and won’t require much effort or money to create it but will let your clients examine your MVP and understand it better.

To assess success of MVP, devise a metrics system including the following parameters: 

  • Activations

Pay close attention to how many clients picked your MVP, how many of the users are active. This will let you measure your product recognition and prepare an outline for further activities.

  • Customer Acquisition Cost

Learn how much funds are spent to attract a single client to your creation and calculate the actual ROI. The resulting numbers will enable you to cut off the unnecessary expenses and prioritize your marketing and sales efforts.

  • Active Users

Active users are people who use the product during a particular time period, hence they are divided into daily, weekly, and monthly active users. Knowing the number of active users will allow you to calculate your profit correctly and measure the effectiveness of your promotional campaign. Key metrics are also strongly connected with this attribute. 

  • Engagement

Engagement can help you measure not only the current value of your product, but also to forecast the future value. It also enables a startup to improve the user experience based on customers’ feedback.


Bringing a new product to life can be a tough challenge with the abundance of competitors, lack of time, money, and knowledge of the possible results. A minimum viable product is the right solution that will let you avoid risks, minimize your expenses, and get to conquer your audience by adapting to their demands. 

MVP creation is a complex process that should be carefully planned and divided into significant stages. Stick to them using our tips for successful MVP implementation and make sure you will not repeat others’ mistakes and you will receive a most positive experience of MVP development for a startup. And if you have any additional questions, feel free to contact us, we'll be glad to help!


1. What is an MVP?

It is a product’s test version including a few critical features that proves to be attractive for an end-user.

2. Why do I need an MVP?

An MVP gives every startup a chance to present itself to the public and win over an audience. Besides, it helps to cut down expenses and attract investors to the project.

3. How to build an MVP?

MVP development consists of the following steps:

  1. Do the market research
  2. Narrow down your key audience
  3. Define your vision of the project
  4. Assign value
  5. Monitor your rivals
  6. Define your MVP features
  7. Map out user flow
  8. Develop and test
  9. Work on feedback

4. What MVP stands for?

A minimum viable product, or MVP, includes only the essential features that allow it to increase the delivery of a product to solve the customers’ pain points and problems. Everything else can be done after receiving customers’ feedback.

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