How to build an MVP (Minimum Viable Product): steps, examples, benefits, costs

Indeed, not all great products do well in the market. In fact, Startup Genome studied 3200+ startups, of which 90% failed. The failure may not necessarily result from scalability issues, funding, or complexity — it could be that they did not understand the market demands before launching the product.

According to Michael Siebel, the co-founder of Twitch and managing director at Y Combinator, "Your product may be excellent, but until real people use it, you may not know if it solves their problems." Here's where developing an MVP (minimum viable product) comes in. An MVP allows you to use limited resources to create a product from scratch and understand your market before you go all out.

 Renowned brands like Dropbox, Amazon, Facebook, Airbnb, etc., used this strategy to become unicorns today. Want to know more about an MVP and how these market giants applied MVPs to reach their current status? Keep reading to discover a step-by-step guide on building an MVP and developing your product idea.

What is the purpose of creating an MVP?

Eric Ries, the author of The Lean Startup, defined MVP as "a version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort." The primary purpose of creating an MVP is to validate the product idea and how the market potentially reacts to or accepts it.

Afterward, you can decide what's best for the product based on the feedback you get. By creating a minimum viable product or basic version, you can focus on the core features and save significant time and resources on building a complete, fully-featured product that may not do well in the market.

Why and when do you need to develop an MVP?

There are many reasons for building an MVP, but we can summarize them as follows:

  • Insights, in terms of having a grounded knowledge of the problem your product will solve.

  • Foresights, pertaining to the future of the products and where you hope to scale it to if successful.

Here are the top reasons and benefits of building an MVP:

Testing a new product idea

Amazon launched a fitness product in August 2020 called Halo that measures body fat and helps users stay fit. The project launched as an invite-only early access program, allowing Amazon to analyze users' feedback before onboarding more users. Less than three years later, Amazon announced the end of the project.

While the exact reason Amazon discontinued it is unclear, the tech giant called Halo an "experiment" and one of the numerous "new ideas" it invests in. As an MVP, Amazon used a few years after the product launch to decide whether to move ahead with Halo or pull the plug.

Like Amazon, many startups use MVPs to experiment with ideas and determine what to promote based on market reactions. MVP development can help you narrow these ideas to one with the most potential solution for market needs while cutting costs.

Developing a product's core feature

A product's core feature refers to its basic service. For instance, when people think of a Tesla car, what comes to mind is probably a stylish self-driving electric vehicle that can go hundreds of miles on a single charge. Any other features they are rolling out are additional perks. Once you know the most important service your product renders to your market, you can tailor your MVP software development around it.

Iterative development

An MVP is a great way to improve your product over time. As you understand your customers and market, you can gradually iterate and add valuable features to the product.

Note this — no product comes out to the market fully formed in its first version. A product must continue to undergo further development for better results.

Let's use the Tesla journey as an example again. Do you know that the first Tesla car, the Roadster, was perceived as too expensive and impractical? Launched in 2008, the Roadster had the following challenges:

  • Too pricey at $109,000

  • Low range, with a maximum speed of 125 miles per hour

  • Small storage space owing to the poor battery placement at the trunk of the car

  • Two-seat capacity without space for more passengers

  • Overweight, mainly because of the battery size

  • Maximum coverage of 245 miles after a single charge

  • It suffered battery degradation, software malfunctioning, and overheating 

Since then, later models of Tesla have improved significantly on these challenges, with the Tesla Model 3 being as low as $35,000. What does that tell you? Building an MVP is a journey. Start small and grow iteratively.

Save cost when working with limited resources

Time, budget, and labor are limited resources, especially when developing an MVP for startups. As a startup, you must maximize them well to achieve great results. It will help you work on budget, spending only what is necessary to penetrate the market and get much-needed customer feedback.

Risk mitigation when entering new markets

Entering new or competitive markets can be daunting. No amount of research is enough to prepare you for what is ahead. So the trick is to dip your toes first, then your feet, legs, and entire body. An MVP helps you achieve it, enabling you to reach any market you have limited experience without suffering excruciating losses. This way, you reduce every form of risk, as opposed to when you go all in with a fully developed project.

Validating a product idea

As mentioned, you cannot improve or learn about your product's potential by keeping it in the lab. You have to launch as soon as possible and get real-world data and feedback from early adopters to plan a "strategic next move."

One of the most important benefits of building an MVP is that it helps you to understand how your product solves consumers' problems to create an ideally validated idea and how you can improve it to serve them better.

Fast time-to-market

Building an MVP allows you to get your product to market quickly and with the essential features. This can give you a competitive advantage, especially in industries with market friction and high competition. Once you get paying customers early, you can start generating revenue, even while in the development process. You can leverage this revenue source to improve other areas of your product.

Testing business models

An MVP lets you test different business models with real users, especially when drawing your pricing strategy. The New York Times is a great case study here. Within 20 years, the media establishment changed its business model from advertising to subscription-based.

All it did was leverage available data to make informed decisions, and now, 67% of its annual revenue comes from digital subscriptions. Although the New York Times is not an MVP but a full-fledged company, the same principle applies. Start with one business model, observe the results, and make changes if necessary. Sometimes, you may use a freemium model and offer additional features to paid users.

Early customer feedback

Another reason you should create a successful MVP is because it helps you gather insights from real people or users. This feedback can help you understand users' needs, pain points, likes, and dislikes. It will also guide you in improving your product and serving your users better through subsequent iterations.

Examples of well-known and successful MVP projects

Now that we have established some reasons for building an MVP let's look at real-world case studies of brands that built MVPs and scaled their service. You'll find some ideas on developing a minimum viable product and bringing your business project to success.


Dropbox, a renowned cloud file hosting service, didn't even release any product. The technology to build the project was complex, and the founders needed to win investors over. Without resources to create a solution, the developers launched a 3-minute video of the Dropbox Demo, which served as their prototype. In the straightforward video, Drew Houston explained Dropbox's unique selling point (USP) and how it would work.

Like magic, the video drew unprecedented attention, and the sign-up waitlist grew overnight from 5,000 to about 75,000. This rising interest prompted Dropbox developers to invest more time and resources into the project until it launched. Dropbox is worth over $9 billion today, recording over 500 million users.


Uber is currently worth over 95 billion at the time of writing. But the icon of a taxi was nearly unrecognizable in 2010 when it launched as beta-tested Ubercab. The taxi service was accessible by only a select few who could afford luxury transportation.

As it made further iterations, it became open to the public. Some features, like live-tracking of rides, fare estimates, automatic credit card payment, etc., were gradually introduced as Uber's user base grew.


In 2008, Airbnb (called AirBed & Breakfast at the time) launched its MVP as a rental service with no onsite payment option, no map view, and only part-time student founders. Upon booking a reservation, users had to travel to the supposed location to pay for the service. The only good thing was that users could get information about their reservation before going to the place.

Today, after many iterations, Airbnb, worth over $97 billion, offers many super features to serve its 150+ million users, booking over 393 million bookings worldwide.

7 steps on how to build a minimum viable product

Now, we've seen some real-world examples of popular brands that leveraged MVP to grow their products and services to what they are today. Let's see some actionable steps to take to build a minimum viable product quickly and successfully.

Market research

Here is a secret: Before you develop any project, begin with why questions, like:

  • Why do you want to build an MVP? 

  • Why will users want to use this product? 

Then, you can go further to know your potential users' pain points and market needs: 

  • How is the target market currently satisfying this need? 

  • Are there legal considerations to take into account?

These and so many other questions are important for your market research and are very important for your MVP development process. Your market analysis goes a long way in influencing your product idea, MVP, and target market. This will give you a clear scope of what you want to achieve.

Define the scope of the MVP

The next step in the MVP building process is to define the scope of your MVP by identifying the basic solution it offers, geographical location, age bracket, and industry you want to target at the onset. Based on your market research findings, you must avoid unnecessary complexity and focus on the core value proposition that your target customer might need.


Prototyping is one of the most critical stages of the MVP creation process, giving you a clearer picture of the MVP. A prototype is a sample demonstrating a portion of your idea before it's fully developed. Also, stakeholders and potential users can give you early feedback before investing in the MVP launch.

Develop the MVP

Once the prototype is validated, proceed with developing the actual MVP. There are lots of MVP templates for startups you can leverage. To guarantee better results, work with reputable software development companies, such as Dworkz, that use data-driven software development strategies.

Test and get users' feedback

Once your MVP is ready, release it to a limited group of volunteer (beta) testers. Then, collect their feedback and analyze their usage patterns to understand how well the product meets their needs and expectations. Heads-up! You may get some depressive criticisms, and not everyone will like your product. You should prepare yourself mentally for this and remain resolute not to get discouraged.

Reiterate and improve

Based on the feedback you received, make relevant changes to the product. It's important to note that a good product is about more than what you think but what the market needs. It's okay to be visionary, but you shouldn't discard the users' feedback simply because it doesn't align with your perspective of what your product should be. What's the essence of insisting someone use your product if you're unwilling to shape it the exact way they want it? Use the feedback you've gathered for further MVP development and testing.


Getting positive feedback throughout your MVP campaign is a good sign that your product is in demand. You can make careful observations and add more features. Then, consider iterating and scaling for more user adoption and investing in full-scale marketing campaigns. If the reverse is the case, you can return to the drawing board, adjust, and start the process again.

How much does it cost to develop a minimum viable product?

When you're planning on how to build an MVP, you need to take into account the cost of the project. It isn't easy to speculate exactly how much you will spend, but here are factors that will determine the overall cost.

  • Complexity and scope: Complex MVP can be costly. Adding more features and functionalities requires additional labor, planning, and time, which causes you to spend more. That is why we encourage MVP developers to cut down on the features and focus on the core functionalities that users need.

  • Development team: When you're set to create MVPs, the team size, experience, and location can influence the project cost. For instance, hiring developers with specialized skills or working with a development agency from a higher-cost region can increase overall expenses.

  • Technology stack: The choice of technology stack can significantly impact the cost of developing an MVP. Some technologies may require more expertise and resources, leading to higher prices.

  • Infrastructure and hosting: Consider the cost of setting up the core infrastructure for the MVP, which may include the spending on servers, cloud services, and other hosting solutions.

  • Third-party integration: There may be additional expenses should the MVP require third-party services or APIs. The additional costs may be associated with licensing fees or development efforts to enable these integrations.

  • Post-launch service-level agreement (SLA): The level of support and maintenance required after the MVP's launch can influence the overall cost. A higher SLA with ongoing support and updates will come with additional expenses.

Consider Dworkz as your trusted partner for MVP development

Dworkz is a San Francisco-based design and development firm specializing in empowering data-driven B2B SaaS startups. Launched in 2004, Dworkz has consistently maintained a track record of quality development services.

Whether you want to build a healthcare SaaS application or a fintech solution or build an MVP for any tech idea across different industries, you can count on us to offer you software services that perfectly align with your brand goals.

That's not all. We pride ourselves on being more than just developers — let us be your strategic partners on your entrepreneurial journey and offer you all the benefits of design-driven development.

Explore our portfolio of completed projects and how we helped different clients achieve their product goals. Contact us today for a free consultation so we can hear your ideas and help you bring them to life.


What is an MVP?

An MVP, or Minimum Viable Product, is a product development strategy in which a company or startup releases a basic product version with just enough features to satisfy early customers and gather valuable feedback for future improvements. The primary goal of an MVP is to create an ideally validated idea and understand its market acceptance.

What are the reasons to build an MVP?

Some reasons for developing an MVP include the following: 

  • To test if the market demands your product and if it solves a real problem.

  • To quickly launch your product with the core features users may need and gain a competitive advantage.

  • Gradually refine and improve your product idea into one that sells based on user feedback and demands.

How long does it take to create an MVP?

How long it takes to complete your MVP development stages depends on the product complexity, team size, and available resources. There should be a delicate balance between quick delivery and the quality of your MVP so that you get meaningful feedback.

How much does it cost to develop an MVP?

Various factors can influence how much it costs to develop minimum viable products. They include:

  • The project's complexity; 

  • The number of features included; 

  • The technology stack used, the development team's rates;

  • The location of the development team.

Overall, an MVP is cost-effective because it prioritizes core features over the entire product launch.

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