App Development

Why Startups Need MVP Development

July 07, 2025 5 Mins Read

July 07, 2025
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The startup space is fast, competitive, and harsh. According to Exploding Topics, about 90% of startups fail. What would be the reason for that? There would be multiple reasons for startup failure, but some of the reasons certainly are that they built a product that no one wants. Or somehow fails to generate the need in the market.

Is there a way to understand the market's needs so businesses can invest wisely?

Yes, this is when the Minimum Viable Product (MVP) comes into play.

In the current startup web, adopting fast or investing heavily is not just a quick solution. It has other, equally important requirements. This is MVP, a Minimum viable product that provides entrepreneurs with a more intelligent, data-driven way to validate their assumptions, waste less time, and be more successful.

In this blog post, we will discuss the MVP Development Process in detail, highlighting how it serves as a cost-effective solution with real-world examples. We will also guide you on how to select the best MVP development services for startups.

Table of Contents

What does MVP stand for in Business?

The key purpose of MVP development for startups is ‘validation’. This validation allows startups to test hypotheses, determine customer wants, and adjust their product accordingly. Thus, it minimizes the risk of total failure.

How do MVP & Full-Fledged Product differ from each one?

MVP only includes those features that allow the products to accomplish the primary tasks for users. A full-scale product includes a fully functional and polished product.

Think of the MVP as the foundation, and the full-scale product as the building that is built on top.
MVPs that are still relevant in the market

Minimum Viable Product Examples, which have proven to be the best solution for Startups

1. The list of startups that turned into well-known enterprises nowadays started with the MVP at first.

Business Name	Year Started	Initial Valuation Estimate	Current Value
DropBox	2007	Dropbox raised $1.2 million, likely in exchange for 20–25% equity, implying a post-money valuation of $4.8M–$6M	As of early July 2025, Dropbox (DBX) has a market capitalization of approximately USD 7.8 billion.
AirBnB	2008	$150K at a $1.5M valuation	Airbnb Inc. (NASDAQ: ABNB) is approximately $84.82 billion, based on a closing stock price of USD 135.39 per share
Twitter	2006	Twitter raised $5 million on a $20 million valuation	X is currently valued at approximately $33 billion in equity—or $45 billion including debt—as of mid‑2025.

2. Companies that opt for the full-fledged app development method but fail to establish a strong company

Business Name	Year Started	Initial Valuation Estimate	Current Value
Quibi	2018	Raised $1.75 billion before launch	Shut down just 6 months later
Google Wave	2009	No Public Valuation	Closed in April 2012
Color Lab	2011	Raised $41 million in pre-launch funding	Shut down in October 2012

Why Startups Need an MVP

Startups primarily use MVPs (Minimum Viable Products) to validate their concept with minimal risk. MVP allows them to experiment with the core features and USPs of their product in the real market at the least initial expense.

One of the biggest advantages of an MVP is cost savings. Instead of developing a full-fledged product, startups focus on key features that meet users' near-term needs. This focused development approach eliminates wasteful expenditure and reduces time to market.

Secondly, early to market entry enables startups to acquire vital user feedback and reduce the risk of colossal failure.

Why are MVPs Cost-Effective?

1. Streamlining Resource Waste:

MVP creation allows startups to avoid creating features in advance. By capturing real-user feedback before the fact, startups are able to make informed improvements, wasting neither time nor resources.

2. Scalability Over Time:

MVP companies also allow startups to scale over time. As traction increases and user data appears, startups can invest with greater confidence in additional features, platforms, and going into new markets.

In short, MVPs aren't just budget-friendly; they offer flexibility, quick time to market, and data-driven growth paths. This is an ideal approach for startups.

What are the Benefits of a Minimum Viable Product for Startups

The idea of MVP is what the market needs and how accurately your product or service caters to the market.

Below, we’ve mentioned how MVP benefits startups in the long run.

1. Validates that there is Market Demand Early

Startup MVP development typically validates that you’re building something that the market wants. This is the classic startup mistake of creating and investing heavily in a product that no one wants.

2. Fastest Time to Market

Since you only need to build the core functionalities of your product, an MVP can launch quicker than a more developed product. The faster you launch, the sooner you can start developing a product that no one wants.

3. Saves Development Costs

An MVP only focuses on what is needed to be built to understand if customers want the product being built. Bootstappers or early-stage startups will benefit from the reduced costs of building a minimum viable product.

4. Ability to Obtain Real User Feedback

In terms of an MVP for startups, having an MVP that can give them access to real user behavior or feedback is powerful. The data obtained from an MVP is golden, as it will dictate the smart development of your future product and whether or not product-market fit has occurred.

5. Lower Investment Risk

Investors are likely to put their money on validated ideas. A working MVP shows traction and lowers the perceived investment risk.

6. Pivoting is Easier

If the MVP shows that users are asking for something else, these startups have the ability to pivot. MVP development team often utilize feedback loops to reorient themselves without starting over.

Are you looking to develop an MVP from scratch?

No worries. CodeAegis has your back. Our experts align with your product requirements and take the time to understand your business challenges and pain points.

Want to connect with us? Don’t hesitate.

Schedule a Free Consultation Call today!

What are the MVP Development Challenges for Startups

Developing an MVP is not a walk in the park. It has unique challenges that need to be sorted out. Below, we’re mentioning the list of challenges that startups may face while developing an MVP.

1. Defining the Minimum Correctly

The most significant challenge is figuring out what the “minimum” that the startup is trying to build is. The struggle is very real, and it is too easy to overbuild. Don’t overthink it, but also, don’t get trapped in concept creep.

2. Limited Resources and Budgets

Even building an MVP is technically an investment. Startups are sometimes working off of limited budgets, and they must prioritize what is going to be the MVP.

3. Speed Vs Quality

Speed is very important; at the same time, so is usability. An MVP is useless if it has performance issues. There is a fine balance between speed and quality, but the sooner the MVP is up and running, the sooner the feedback can begin.

4. Stakeholders Have Unrealistic Expectations

Stakeholders can expect an MVP to function like a fully operational product. Stakeholders must be fully aware of the meaning of MVP in business and must keep their expectations within those parameters.

5. Misinterpret User Feedback

Feedback can be subjective. Good build teams learn to read between the lines, use feedback against data, to develop their skill set. Every startup MVP development team needs to develop this skillset.

6. Selecting the Right Technology Stack

Scalability is important. Your MVP's technology stack should be able to support you as you grow. Making the wrong decision early on can lead to expensive rewrites later.

How to Select the Right MVP Development Service Company for Your Startup

1. Experience with the Startup Ecosystem

You first want to seek providers that specialize in startup MVP development. Their knowledge and familiarity with the startup world and its obstacles will be invaluable.

2. Portfolio and Case Studies

Review their past work. Go, look through the examples of minimum viable products in your industry or other areas.

3. Agile Development Process

Calculate their use of an agile development process. Lean and iterative is always a better strategy for continuous improvement and timely access to minimum viable products.

4. Communication and Transparency

Select an MVP web development company that understands how important customer engagement is. Regular updates, demos avoid surprises. Trust and visibility are critical in this partnership.

5. Post-MVP Support and Scaling

You want a great partnership that doesn't end after your launch. An ideal partner would consist of teams that will provide post-launch support, fix bugs, and add features.

Advantages of Hiring MVP Development Companies

1. They are the Specialists

MVP development service companies have experience working with startups. They have insights, tools, and workflows that allow them to avoid a lot of the trial and error.

2. Faster Turnaround Times

They’re agile. Their entire MVP development process is faster, while still maintaining the quality of work.

3. More Cost-Effective Without Compromising on Quality

Instead of hiring a full team to build your MVP, you can have a dedicated MVP development team. You will get the same product at a fraction of the price.

4. Technical Scalability and Support

Most development services companies will build your MVP with scaling in mind from day one. The right company will ensure that as your startup grows, your product can grow with you.

5. User Experience/ UI Best Practices Utilized

User experience is important for all MVPs. MVP development service companies will already have UI/UX principles in place that ensure a great user experience and a feedback mechanism in place.

How to Calculate the Cost of MVP Development

The cost of MVP development varies based on multiple factors such as the complexity of features, design requirements, and the development approach. To accurately estimate your MVP budget, begin by defining the core functionality that solves the primary problem for your users.

The more features you add, the higher the cost. Platform selection also plays a vital role; developing an MVP for iOS, Android, or web will affect both time and expenses. Another key determinant is the UI/UX design basis; for instance, wireframes are cost-effective, while custom, visually rich designs may increase your budget.

Additionally, the technology stack and the location of your development team. Whether in-house, offshore, or outsourced, impacts the overall pricing. A simple MVP can range between $35,000 and $80,000 or $40,000 to $80,000, while more sophisticated solutions may go higher.

Collaborating with an experienced MVP development company can help you create a realistic cost breakdown and avoid hidden expenses down the line.

Conclusion

An MVP is the heart of startups. Going in at first with an MVP gives your startup a reflection on how it will penetrate the market dynamics.

Even an MVP can ensure that you’re moving ahead on the right path to achieve your goals without wasting time and resources. It is a cost-effective and strategic way to validate your ideas into reality.

It attracts immense users and builds something that users truly want. It can make a big difference in startup failure or success, market R&D, and many other ways to elevate the business enthusiast to take the risk further.

Frequently Asked Questions

1. How long will it take to build an MVP?

Typically, it will take no more than 6-12 weeks to build a Minimum Viable Product (MVP).

However, the time it will take to complete an MVP depends on product idea complexity, the number of features that were scoped into your MVP, the tech stack you select, and team size/development capacity.

2. Is an MVP only for tech startups?

Absolutely Not. While tech startups are the most common adopters of the MVP methodology because of their inherent high-risk nature, an MVP can be advantageous for any type of business that is looking to validate their new product, service, or feature.

The MVP methodology can improve the chances of success for any commercial business; e-commerce companies, education services, healthcare services, and even businesses in the bricks-and-mortar world are testing new delivery or service models.

3. Will I need to rebuild after the MVP?

Not necessarily. If the MVP had been developed with scalable and flexible technology, then you could use the MVP code as the basis for the final product. The point of an MVP is to test key assumptions and gather feedback from users.

You will explore, iterate, improve, and grow your product in subsequent releases based on that feedback.

About Author

Siteshwar Pandey

Digital Marketer

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Siteshwar Pandey is a digital marketing professional with over 4+ years of experience in the Software Development and IT Consulting industry. He specializes in data research, growth analysis, and content strategy, and stays actively updated with emerging trends. Siteshwar regularly shares insights on business growth, software development, and IT support.