The Benefits of Building a Minimum Viable Product (MVP)
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What do highly successful apps like Spotify, Uber, and Instagram, have in common? They all have used a Minimum Viable Product (MVP) process, not only to test the viability of their respective products, but to build functionality. Through an MVP process, these apps gradually evolved over time, based on user testing data and feedback. Eventually, they became the mature apps we recognize today.

A Minimum Viable Product is a version of the product which includes only the features that solve a core problem.  The goal of an MVP is to provide immediate value, minimize development costs, and gather data and feedback that can be applied to improve future iterations.  

Here are seven major benefits to choosing this iterative, agile process over an all or nothing approach.

Iterative Development and the Build-Measure-Learn Process

When an organization decides to develop a product, they make certain assumptions. These assumptions might include:

  • what users to target;
  • how the design should work;
  • what marketing strategy to use;
  • what architecture will work most efficiently; and
  • which monetization strategy will make the product sustainable.

However, no matter how certain a business is of their assumptions, a product can’t succeed unless those assumptions are validated.  

Through the iterative, “build-measure-learn” process of Minimum Viable Product development, you can validate – or invalidate – your assumptions with little risk. Iterative development is designed to identify user pain points and determine the proper functionality to address those needs over time. This is done by continually testing assumptions against user feedback, and making fast product changes as new information presents itself. Following the “build-measure-learn” process you begin by building an MVP to test an assumption. You launch the product, allow users to test it, and then collect feedback to guide decisions on future iterations, including; what features to add, what aspects will help increase sales/ROI, and exactly where you should allocate budget.

The Benefits of a Minimum Viable Product

Winning Stakeholder/Investor Buy-In

In many cases, businesses rely on stakeholder or investor buy-in to secure funding and start a mobile project. The key to receiving this buy-in is to build confidence in the product you’re pitching and its ability to achieve the desired outcome (i.e. increase revenue, reduce check-out times, etc.). Developing an MVP is an effective method to securing this buy-in as it allows you to test your idea – before going to investors. This ensures that when you do, you’ll have a solid case that demonstrates the market validity of the product.

Ultimately, stakeholders want to invest in products that will be successful. This key advantage to an MVP is that it not only proves the merits of a product, it provides a physical product stakeholders can see and use. Furthermore, and if investors buy in, the product can launch without stakeholders having to wait months for a return on their investment. 

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Testing Business Concepts

The biggest benefit of developing an MVP is that it allows you to test your business concepts. By offering the core set of features rather than a full-blown, feature-heavy product, you can verify that your product concept resonates with your target audience. This provides an opportunity to change a product’s direction based on your findings.

When the product is launched, you can identify the most active users, and how they interact with the app. This information can be used to tailor app functionality to suit these users more. With a feature-heavy product it would be much harder to change anything – you may even need to rebuild the entire app.

Instagram is an example of a brand that used its MVP to do this. Originally, Instagram’s core idea involved a GPS feature. But after launch, leaders decided to change the concept based on insights gleaned from user feedback. 

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Verifying Market Demand

A Minimum Viable Product is all about testing; seeing what works and what doesn’t. In some ways, an MVP is more about trying to achieve an understanding of the market demand than it is about trying to sell or acquire customers.

Often, organizations assume their product fulfills a specific user-need. However, this may not be true; either because the need doesn’t exist, or there are already solutions in the market. For an app to be successful, it’s critical to conduct user research to ensure your product provides a solution that your customers have expressed a need for. An MVP allows you to do just that. You can determine if potential users need and will use your product, without making a large investment. Then, based on your findings, you can either re-work your product to create more market differentiation, or come up with a new concept altogether.

Developing a Monetization Strategy

Products need to be profitable. When it comes to mobile applications, building a sustainable stream of income involves defining a mobile app monetization strategy. However, as numerous app monetization strategies have been proven to be successful, deciding which is best can sometimes be difficult.

With so many considerations to keep in mind, it’s possible to believe one strategy will work, and be wrong. Again, the best thing to do is test your assumptions with an MVP.  If, for example, your app monetization strategy is based on in-app purchases, you can use an MVP to test your users’ willingness to pay for upgrades and add-ons. If results show users aren’t purchasing as much as you had hoped, this is an indication that you’ll need a different monetization strategy.

Testing UX and Usability 

Creating a mobile product that results in deep user engagement is difficult. According to AppFlyer, 50% of apps are uninstalled within a month of being downloaded. On the other hand, 90% of users that engage with an app – even only once a week – keep the app around.

Retaining users by providing continuous value is an essential goal of user experience design. An MVP will test the product’s potential for this through app engagement, longevity and lifetime value. With a Minimum Viable Product, you can gather data and insights on how users interact with your product to assess how quickly they understand its purpose and flow. Based on this, you can identify new opportunities to expand functionality and provide a better user experience.

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As previously mentioned, mature products are the result of years of development – with a price tag to match. But because they are created iteratively, over a longer period, the cost is spread out – often with reinvestment of the revenue generated from earlier versions. The MVP approach also helps to keep the product from becoming over complicated and requiring more sophisticated coding and solutions. As you gain more users and gather more information to inform the direction of the product from the MVP, you can begin to invest more, and more intelligently.

Key Takeaway 

The MVP app development process relies on testing. In this process, businesses identify their riskiest assumptions, find the smallest possible experiment to test those assumptions, and use the results of the experiment to guide development. The key takeaway is that a Minimum Viable Product allows you to start smaller and iteratively build up to produce a better, more polished product – all in a way that allows you to leverage user intelligence to make the best product decisions. With every release version, the app evolves to maximize ROI and move towards a fully mature application.

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