Why do you need an MVP for your mobile app?

11 min read
August 17, 2022

If you’re familiar with the startup world, you’ve undoubtedly heard of the term MVP.

MVP, or minimum viable product, is a bare-bones version of your app that contains only the essential features. That means it’s relatively inexpensive and quick to put together.

It’s a popular approach that many big-name apps had used when they started, from Spotify to Instagram.

So if successful apps have used it, why shouldn’t you?

Here are the various reasons you need to put in the effort to create an MVP.

To validate market demand

Validation may be the top reason you’d want to bother building an MVP.

It’s always wise to test your app idea first to see if the market has a real need for your solution before investing in development time and cost.

Doing this first is extremely important in today’s saturated market. Did you know that the number one factor of app failure is a lack of market need?

Most common reasons for app failure 1

Source: The Web App Market

This is especially true if you have a radical idea that’s never been done before (think Uber or Airbnb).

However, even thorough market research won’t always give you reliable results. That’s because respondents don’t always give accurate insights.

Take the failed startup Dinnr, for instance. It was a service that allowed users to pick from recipes online, then have all the pre-measured ingredients delivered.

You simply needed to follow instructions to have a home-cooked meal.

Early market research told founder Michal Bohanes that he had a hit on his hands.

Respondents from a survey indicated that 70% would buy the product. He also conducted one-on-one interviews that gave favorable responses.

But reality ended up being far different. The app only had 12 orders in the first week and never picked up steam from there. The service closed just two years later.

failed startup Dinnr

Source: Michal Bohanes | Medium

The problem was that the service never had a real market need. It’s easy for people to be enthusiastic about an idea.

But it’s only when they use the actual product that they will tell you what they really think.

That, in a nutshell, is what an MVP does. It provides a low-risk way to test how well your product will do with its target customers.

Thus, at this early stage, the goal should be validation, not customer acquisition.

Now let’s look at a grocery delivery app that got it right with an MVP—Instacart.

grocery delivery app

Source: Arkenea

The app founders wanted to test their grocery delivery idea but didn’t have the resources to build the app’s extensive backend.

The low-cost solution? They used an approach called a Wizard of Oz MVP to manually perform many of the app’s background tasks, such as buying inventory and delivering orders.

Users, however, didn’t know any of this was happening.

It was terribly inefficient, but it worked. The team verified that there was a real need for their app, leading to the success of Instacart today. And MVPs helped make that a reality.

To remain cost-efficient

As mentioned, MVPs are a great way to test the waters first without wasting too much money in case it fails.

And the costs can be substantial. According to AppMySite, even a simple app will cost $40,000 minimum and take at least three months to build.

Cost of developing an app

Source: AppMySite

Now, imagine if you’d already poured thousands of dollars and hundreds of hours into creating an app, only to find out that the market doesn’t want or need it.

That wouldn’t only be demoralizing but financially devastating as well.

True, MVPs also cost time and money to build, just like any other app. But they’re always relatively cheaper to make than the full version.

MVPs also help you avoid the dangers of having too much funding in your hands.

Yes, that’s a thing. Deep cash reserves can tempt developers to simply throw money at the app instead of spending time and effort refining it.

One good example is the streaming platform Quibi, which failed mere months after its launch.

Quibi T Mobile free one year

Source: Variety

It suffered from many issues, such as a lack of quality content and a mobile-only platform. But money definitely wasn’t a hindrance.

It was helmed by Jeffrey Katzenberg, the former chairman of Disney, who secured a whopping $1.8 billion for funding the app.

The high cost of production also led to a price tag that’s higher than that of its biggest competitor, Netflix. This was also a big factor in the app’s downfall.

In this case, a low-cost MVP would’ve been a better move.

Executives could have focused on providing value at a low cost to build a substantial user base before committing billions to the project.

The failure of Quibi proves that money isn’t always an advantage. Starting small with a low-cost MVP is often a smarter move.

An MVP can also help you test various monetization strategies for your app with minimal risk. You can have a steady revenue stream early on.

Ways To Monetize Your App

Source: Martech Series

For instance, you might think a freemium model is the best approach since all your competitors are using it. But user feedback might tell you that in-app purchases might be a better strategy.

It would be difficult and risky to do this if you already had thousands of users. But not so with an MVP.

In the end, an MVP’s cost-efficiency is all about focus.

MVPs can (and should) instantly solve the user’s problem or communicate the app idea with just the core features.

You’d be surprised that a number of bells and whistles don’t actually contribute to the user experience but merely enhance it.

Delaying these unnecessary features for later can help lower your development costs substantially.

To launch the product quickly

MVPs are vital to launching your app quickly before your competitors do.

This is essential to do because the marketplace is crowded like never before.

In fact, the first quarter of 2022 alone saw a collective 5,884,296 apps in the Apple App Store, Google Play Store, and Amazon Appstore.

the first quarter of 2022 alone saw a collective 5884296 apps in the Apple App Store Google Play Store and Amazon Appstore

Source: Statista

And these are just the apps that have already been launched.

Crowdfunding sites like Kickstarter and Indiegogo have thousands of upcoming app projects at any given time, which further adds to your potential competition pool.

Kickstarter screenshot 1

Source: Kickstarter

The point is this—you’ll never run out of apps to compete with.

To succeed, speed is the name of the game. You want to release your MVP as fast as possible and beat your competitors to the punch.

It’s also essential if you want to tackle an urgent need in the market.

Take Airbnb, for example. Founders Brian Chesky and Joe Gebbia saw two huge issues in the market. One was the need for instant and affordable accommodation.

The other was difficulty paying rent (which they experienced themselves).

Thus, the idea for Airbnb was born.

To validate their hypothesis, they used their own living room as test accommodation, then quickly put together a rough website shown below:

origina airbnb landing page in 2007 with picture of deck chairs on roof

Source: Airbnb

It was a no-frills website that took a very short time to put together.

It only did one thing and offered it to a specific demographic—attendees of a tech conference held in their area, who were in need of accommodation.

But with an MVP, Chesky and Gebbia were able to maximize the opportunity and validate their app idea.

The key word with MVPs is speed. But there needs to be a balance of value as well. To do this, you must prioritize the core features that best communicate your app’s idea.

One tool you can use here is the MoSCoW analysis model.

MoSCoW Method Analysis or Prioritizing min

Source: Project Cubicle

The idea here is to categorize proposed app features into one of the three groups shown above.

The factors you can use to determine this include the feature’s impact, ease of implementation, cost, and risks.

Your MVP should then only include features in the must-have category. Items on the should-have and could-have groups are best left for the final app version.

Anything on the will-not-have quadrant is a waste of time and should be avoided at all costs.

To obtain user feedback

You can use MVPs as more than just proofs of concept for your idea. They’re also vital to help refine your app by gathering and applying user feedback.

MVPs help you form a virtuous feedback loop. You release an MVP to the public, and you can use it to collect user feedback and insights.

You then implement these in your next app version, which you revalidate with your users.

Doing this will improve your app with each iteration.

the feedback loop 1

Source: Prototypr

This is how Uber became such a success today.

In 2010, founders Travis Kalanick and Garrett Camp created an MVP of Uber (then called ubercab) that did only one thing—allow users to book a cab online.

At the time, the duo only had three cars going around San Francisco as part of the app.

But it worked. Aside from validating the app idea, Kalanick and Camp also gathered feedback from every rider. They then added new features based on what the users were saying.

Of course, their MVP eventually morphed into the Uber app we know today, with advanced features like fare estimation and linking to mobile wallets.

But even today, Uber continually optimizes its app based on feedback.

Uber app

Source: Classic Informatics

Fixing the major parts of your app in the MVP stage is safer and less risky because there aren’t many users yet.

It’s also a great way to build trust and rapport since early users see that you care for their experience. That will get you loyal followers that can drive your user base in the future.

Revising an MVP is cheaper, too. This is based on the 1-10-100 Rule, which states that fixing a problem earlier in development costs less than doing it later.

How early prototyping prevents costly errors in advance 1

Source: Interaction Design Foundation

Although MVPs are technically launched to the public, they’re still considered a work-in-progress version of your app.

That means you can still realize the cost benefits of fixing them at this stage.

To attract investors

Finally, an MVP is important if you want to take your app to the next level—sourcing investments.

The problem is that there’s no shortage of pitches from dozens of would-be entrepreneurs these days—and most don’t work out.

Ideas that seemed great turned out to be failures, and that has made smart investors cautious.

Thus, pitching only an idea to investors or venture capital firms isn’t enough anymore. Even an app that solves a problem won’t suffice.

Investors care primarily about one thing—profits. To secure funding, you must prove to them that your app has a real market need and that it can generate returns on their investment.

Attract Investors

Source: Josiah Humphrey

All of these can be accomplished with an MVP.

An MVP will not only prove your app works, but it can also give data that investors can use to measure its profit potential.

Metrics like customer acquisition cost (CAC) and customer lifetime value (CLTV) can show this.

Data from an MVP will help back up your projections and make you look more credible and convincing.

In fact, according to Varun Bihani, CTO of Galaxy Weblinks, more than 43.2% of investors say their interest in a startup idea doubles if it can show early signs of profit.

The bottom line is that investors rarely care about how innovative or world-changing your app is. Those are irrelevant to them if your app can’t generate enough profits.

An MVP can help prove if this is the case.

Ready to build your MVP?

We hope you’re excited about the benefits you’ll get from creating an MVP.

Indeed, if you want your app to succeed in any niche, MVPs are essential. They can help you avoid wasting money if your idea is a failure OR give you traction fast if you’re on to something.

But make no mistake—building an MVP isn’t easy.

You need the experience to determine the right features, development time, and approach for your MVP.

That’s where DECODE comes in. With several successful app and MVP projects on our belt, we believe we’re your best chance to succeed.

Interested? Get in touch with us today, and let’s talk!

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Written by

Marko Strizic

Co-founder and CEO

Marko started DECODE with co-founders Peter and Mario, and a decade later, leads the company as CEO. His role is now almost entirely centred around business strategy, though his extensive background in software engineering makes sure he sees the future of the company from every angle. A graduate of the University of Zagreb’s Faculty of Electrical Engineering and Computing, he’s fascinated by the architecture of mobile apps and reactive programming, and a strong believer in life-long learning. Always ready for action. Or an impromptu skiing trip.

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