March 1, 2024

MVP in Software Development: Basics You Need to Know

Elena Pashkovskaya

Technical copywriter


MVP in Software Development

Elena Pashkovskaya

Technical copywriter


MVP in Software Development

Introducing new ideas and features in software development can be risky. Whether it is a startup coming to the market with a revolutionizing idea or an established company wanting to expand its market and audience, there is always a chance that the product or features will not find its customers. Minimum viable product (MVP) software development allows testing the business idea with less spending to decrease the risks. Discover how to plan and build an MVP app.

What is an MVP in software?

Despite being a standard practice in software development, many things still need to be clarified about minimum viable products, starting from their meaning and mixing up with other concepts and ending with misconceptions about creating an MVP. Let's unveil MVP's true essence and purpose.

MVP definition and purpose

Minimum viable product is a software development technique aimed at releasing the product with only core functionality. It seeks to gather the maximum amount of customer-validated data with the least effort. MVP in software development is also a product with just enough features to attract launch customers and approve a product idea early in the product development cycle.

MVPs are essential because they allow businesses to:

  • Test product ideas with real customers before investing too much time and money. There is no reason to build a product that nobody wants.
  • Gather customers' opinions and improve the product. Firms can create a product that is highly likely to be successful.
  • Get customers to use their product early on. MVP makes it easier to attract more customers later.

The software development field is expected to rise in the coming years, with a yearly growth rate of 7.04% between 2023 and 2028. In addition, the custom software development market, valued at $29.29 billion in 2022, is expected to expand even more at a compound annual growth rate of 22.4% in 2023-2030. In this dynamic and competitive domain, there is no place for uninformed decisions that can result in losses and even devastate a startup. This is where MVP comes in handy, helping to check the business idea without great investments.

U.S. custom software development market

MVP characteristics

The three elements of MVP are user experience, functionality, and scalability. Why are they important?

User experience: favorable customer feedback indicates that the product will be in demand. MVP must be intuitive and easy to use, even for non-technical users. Minimize complexity, prioritize a smooth user flow, and focus on a clean and user-friendly interface.

Functionality: the functionality of MVP will depend heavily on the problem it is solving. Prioritize functionality that solves the most critical pain point and delivers the essential value proposition.

Scalability: as MVP is one of the first steps in software development, it should be scalable to encompass even more features and functionality in the future. When your business idea proves itself in the eyes of the customers, that is where the growth opportunities begin. The MVP should be designed to be easily scaled up as you acquire more users.

Knowing the main concepts, it is time to determine how MVP differs from other idea-testing methods.

POC vs. prototype vs. MVP

There are several ways to test your project concept without a full-scale software development process. Let's find out what they are and the difference between them.

Proof of concept (POC) is a simple project to demonstrate and validate a business idea. POC helps to determine whether the project can be built without excessive spending and reflects its core functionality. It helps to evaluate the product's technical background and assess development feasibility. 

Using POC, you can assess the resources, discover the project's limitations, define business idea complexity in technical performance, verify development methodology, etc. 

Prototype is part of the project discovery phase, where we define the product's appearance. It includes outlining the main UI elements, correcting product flow, and learning all product specifications. Prototypes can be built both on paper and digitally and be functional and visual. They help identify customers' needs and get early feedback, determine users' interaction with the program's interface, and optimize resources.

MVP is a fully functional app with minimum essential features to test and validate the business idea on the market. Unlike POC and prototypes, MVP includes UI and UX components and is a more mature and marketable product version. 

Prototype vs MVP: prototype requires less spending. Still, it provides only design and UI elements, while MVP offers a functional, marketable application.

POC vs MVP: POC is a document or a presentation to discover the project's technical feasibility and help calculate future spending. MVP is an app with implemented technical solutions and features. 

PoC vs Prototype vs MVP

The common characteristic of POC, prototype, and MVP is testing the business hypothesis. Nevertheless, they do it at different layers and represent different stages of the software development process.

How to build a successful software MVP?

Steps to build a successful MVP

Now, we are moving on to MVP creation, beginning from the question of how to plan an MVP to the actual steps of MVP building. Continue reading to find out more about the MVP software development process. So, where to start?

Define your target audience and market

Sometimes, the ideas you thought were brilliant do not fit the market. By conducting market research, secure yourself from the risks of developing a product no one wants. Identify market trends and demands, analyze the competitors, launch a survey, and determine whether the idea is viable and you can build an MVP, what new it can bring to life, and who are the potential customers.

Market research is closely connected with your target audience. Define the people who want to use your product or service. Describe their age, gender, income level, and occupation to get your customer’s portrait. In the future, you can test your assumptions and make necessary adjustments.

Define your unique selling proposition

After passing the initial step, you should determine how users will benefit from your product, i.e., the customer's problem your app will solve. Try to answer the following questions: 

  • How will your product stand out from the competition?
  • Why should people want to buy your product? 
  • What unique functionality will your product be able to offer? 

At that point, you can outline the MVP features, creating epics (collections of user stories with a common goal), user stories (short descriptions of new features told from the perspective of the person who wants them), and a simple list of desired functionality.

Specify the core MVP features

Now, when you have a long list of features, you should narrow the array to a few, as MVP includes only core features that are the most important for the customer. But how? You can use several decision-making techniques.

MoSCoW approach

The MoSCoW approach is a valuable tool in MVP software development. It can help individuals and teams prioritize effectively and ensure their efforts focus on delivering the most value. It divides the MVP features into Must Have, Should Have, Could Have, and Won't Have to choose the most necessary product features for market delivery.

MoSCoW approach

The method's benefits include flexibility and adaptability and reduced risk of project failure. The cons are the two-dimensional view and the potential for feature neglect. 

By understanding the benefits and limitations of this method and using it in conjunction with other decision-making tools and critical thinking, you can achieve optimal results in your MVP building projects.

Pareto principle

The Pareto principle (80/20 rule) states that about 80% of the consequences come from 20% of the causes. In other words, a small number of inputs or actions are responsible for a large percentage of the results or outputs. In software development, the Pareto principle says that 80% of the customers will only use 20% of the product's functionality. You can list MVP software features and choose 20% of the most valuable for the application.

The Pareto principle

Nevertheless, the limitations to this principle include the need for more accuracy, oversimplification, and the lack of attention to the remaining 80% of causes.

Prioritization matrix

A prioritization matrix, or a decision matrix, is a simple but powerful tool that helps compare and prioritize tasks, projects, or other options based on predefined criteria. It gives a visual representation that lets you decide what to focus on first. The matrix uses two axes, typically importance and urgency, to categorize options into four quadrants: 

  • Do First: high importance and high urgency.
  • Delegate: high importance but low urgency.
  • Schedule: low importance but high urgency.

Eliminate: low importance and low urgency.

Prioritization matrix

The benefits of this approach include improved clarity and focus and enhanced decision-making. The cons are subjectivity and limited scope, as well as oversimplification.

Overall, each method has limitations and does not replace human decision-making. You should involve stakeholders and team members and try several approaches to carve the most valuable features from the long list.

Identify the risks

Identifying and proactively mitigating MVP risks is crucial for ensuring the success of your idea and paving the way for a thriving product. Common risks include:

  • Building the wrong thing;
  • Unrealistic expectations through setting overly ambitious goals;
  • Failing to collect and analyze user feedback effectively;
  • Technical challenges that may lead to development delays.

Thorough planning and a critical approach to the MVP development process will protect you from mistakes. Create a list of risks, evaluate them, and choose the most crucial. Then, think over the strategy for mastering the problem if it occurs.

Build and launch the MVP

This stage involves creating prototypes, designing the user interface, and developing the core functionalities. It is always better to make a product with an experienced team, and we, as a company with 15+ years of expertise, are ready to help collect analytics, prioritize features, foresee risks, and ensure that everything will work as intended. 

Launch your MVP to an audience once you're confident in your product's core functionality and user value. Consider utilizing marketing strategies like social media, content marketing, and influencer outreach to reach your target market.

Analyze the feedback

Analyzing your MVP feedback is particularly valuable. It offers crucial insights to shape your product roadmap and maximize its potential. Let's delve into the critical aspects of beneficial MVP feedback analysis:

  • Utilize various channels to collect feedback, including surveys, interviews, app store reviews, social media, and usage data. 
  • Encourage open-ended questions beyond simple "yes" or "no" responses to gather rich and detailed feedback. 
  • Incorporate quantitative data through rating systems and feature usage analysis to measure user experience and satisfaction. The metrics include user ratings, percentage of paying users, number of app downloads, number of active users, etc.

Now it is time to take action: translate insights from the feedback analysis into a concrete action plan for iterating on the MVP. Apply Build, Measure, Learn technique: evaluate the impact of changes made based on feedback and identify further opportunities for improvement. 

MVP specifics in different domains

Let's take off from the pure theory and look at individual industries' MVP software design specifics.

MVP in Fintech

What makes fintech applications valuable and relevant? The core knowledge of the industry!

To build a successful MVP, you must first analyze the particular market trends of banking, financial services, and insurance (BFSI). Fintech MVP development should stress high accuracy when performing financial and banking operations and prioritize security issues. Additionally, consider area-specific difficulty in building customers' trust. It can be overcome by transparency and being clear about security measures, customers' data policy, etc. You must also understand the domain's regulatory landscape – it is the second point of concern after defining the problem that your MVP will be designed to solve.

Examples of fintech-specific MVP software engineering include personal finance management apps, eWallet apps, lending platforms, blockchain apps, automated trading solutions, and financial reporting software.

MVP in Healthcare

The healthcare industry encompasses a range of applications in various aspects of nursing care and medical practice. It contains the challenges for the developers and business owners. Let's take a closer look at the issue and learn the tips on building an MVP app in healthcare.

  • Minimum viable product software in healthcare must meet regulatory compliance, such as HIPAA, FWA, and the HITECH Act + ISO and IEC policies. If it goes internationally, even more country-specific regulations arise.
  • Most software products in healthcare deal with patient's data, so you must ensure data privacy and security.
  • While developing an MVP, determine the impact of the product on doctor-patient relations and ensure that your product is interoperable at this stage.
  • MVPs in healthcare mainly refer to consumer-grade healthcare software, like mobile applications for health control and more. Professional-grade medical MVPs are tested under controlled clinical conditions, unlike free-market examinations.

The software challenges include cyberattacks, unpredictable patient needs, and health danger for particularly vulnerable patients – you should be very careful and rigorous while developing an MVP for acute medical conditions.

Healthcare MVP building embrace patient monitoring apps, medical visualization software, medical wearables, chronic care management, lifestyle and wellness apps, fitness and meditation apps, heartbeat or blood pressure trackers, medication reminders, and more. 

MVP in E-commerce

The distinctive trait of e-commerce MVP software is that many web store projects have a basic standard set of features, such as product listings, shopping carts, search engines with filter options, forms of payment and delivery, forms of placing orders, product categories, etc. Having almost the same starting position as the others, the business should thoroughly determine the product's unique value and specific features to stand out.

The other issue while delivering minimum viable products in e-commerce is the solution of the chicken-egg problem. In marketplaces, the dilemma addresses determining whether to prioritize onboarding vendors or buyers first. This decision is crucial for establishing a booming market, as it sets the foundation for attracting and retaining both sides of the network.

Moreover, minimum viable product software in e-commerce often needs scaling down the current catalog, features, market, etc., and gaining excellent business vigilance to track rapid market changes. Some companies launch web store MVP with one category of goods, like Amazon, which started by selling books online and continuously expanded to other products and services.

MVP myths

MVP myths

The primary minimum viable product software development concern is to find the right balance between "minimum" and "viable" while delivering the product. The ambiguity about MVP needs to be clarified. Below you can find the common myths about MVP.

MVPs are for startups only

While the MVP approach is often associated with startups, it also holds significant value for established companies. Whether venturing into new markets, introducing novel features, or evaluating product extensions, this methodology offers an adaptable and practical framework across diverse business environments. However, startup MVP development remains a typical example of the nature of MVP in software development.

MVP development is quick and cheap

Although an MVP prioritizes only the essential features, its development takes time and effort.  Here we should keep in mind the proportion of the resources spent on MVP and the information gained. Careful planning, design, and execution remain crucial to ensure it effectively serves its target users. The time and cost will vary based on the product's complexity and available resources. Nevertheless, MVP software development saves more resources, early defining whether the product is in demand and helping to avoid further spending if the idea fails at this stage.

MVP is a low-quality product version

Though some may perceive MVP software as merely a low-quality, unfinished version of the final app, it is, in essence, a fully functional product equipped with core features that tackle the fundamental problem it seeks to address. Its purpose lies not in delivering a polished, complete product experience but in gathering early feedback, validating assumptions, and testing the market. Still, one of the minimum viable product goals is ensuring customers like it even in this laconic form.

MVP examples

The companies have a wide range of MVP software engineering experiences, from the world’s success to those that did not pass the market probation. What are they? You can find several examples below.


Founded in 2009, Grammarly was a minimum viable product software, a web app intended to improve students' writing by correcting grammatical errors. The global aim was to improve the ways of communication for people and help them understand English. Now, the app is used for different kinds of communication and has browser extensions, a business edition, and new features. Grammarly has become the primary digital writing assistant, with more than 30 million daily active users as of 2023.


Spotify, the famous music streaming platform, exemplifies the power of the MVP approach. The story started in 2008 with an MVP platform focused on music lovers, offering a broad catalog, ease of use, and personalized recommendations. With excellent customer experience, continuous improvement, and constant value addition to listeners' experience, Spotify grew from an MVP software to a global music streaming leader with 574 million users and 226 million subscribers in 2023.

Standout Jobs

Here, we have a notable example of unsuccessful MVP software engineering. Unthinkingly confident in their solution, Standout Jobs attempted to revolutionize the recruitment industry with a tailor-made platform. Their conviction led to skipping the crucial step of customer research, leading to a disastrous first MVP release. Without proper HR/Recruitment market understanding, simplified value proposition, off-speed development, and unfortunate launching time (the fall of 2008, right before the crisis), the MVP did not find its customers and the startup failed.

NEKLO MVP case studies

Here at NEKLO, we deliver software development solutions for businesses of all sizes and industries. Take a look at our minimum viable product software development cases.

MVP case study 1: Deep Discount Servers

An American servers and network equipment retailer with a functional web store addressed NEKLO with the request to introduce the new feature to the store.

The client's primary requirement was the development of the Bundle Product function, which facilitates the sale of a collection of component items as a unified product. NEKLO built an MVP, which introduced a bundle function and later improved it. The advanced feature allows gathering products into bundles and changing their price and components at the customer's request. We also implemented numerous improvements to enhance functionality and performance:

  • Implemented a new product add/edit mechanism for improved efficiency and data consistency;
  • Made the text more compatible with the Elasticsearch engine, improving search capabilities;
  • Expanded APIs to support various data transfer protocols, enabling faster and more flexible data exchange;
  • Redesigned the website architecture and user interface for enhanced usability and accessibility.

Overall, NEKLO delivered fully functional MVP software with the desired features and introduced more website design and performance improvements.

MVP case study 2: Implentio

A group of US business owners asked NEKLO to develop a software solution for better invoice reconciliation in the e-commerce industry.

The client had a clear vision in mind: an application that would empower them to take control of logistics costs, encompassing every step from packaging and storage to order delivery. This application would act as a central hub, providing real-time insights and allowing data-driven decisions to optimize expenses and streamline operations. NEKLO developed minimum viable product software, which encompassed the following features:

  • Monitoring the performance of third-party logistics (3PL) providers and carriers in real time, including detailed time-in-transit (TNT) analytics;
  • Data visualization tool;
  • Invoice reconciliation analytics with different invoice nesting levels;
  • The integrated refund request feature allowing users to submit official letters directly through the platform to request refunds.

Going beyond the original scope, our team has delivered a design prototype and an enriched MVP, boasting a more comprehensive range of features than initially promised. Extra features introduce reconciliation errors classification and updated visualization rules. We continue our work on the MVP and look forward to adding even more functionality to the app. 


MVP in software development is an effective way to test business ideas for startups and established companies. It helps to gather the maximum validated information about customers' experiences with the least resources spent compared to full-scale software development. 

If you want to test your hypothesis by building an MVP, don’t hesitate to contact NEKLO. Our specialists will consult you and deliver a detailed plan for MVP creation. We are happy to provide MVP software development services and create a product that will be valuable both for businesses and customers.