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How to Build an MVP and Raise Funding

In today’s competitive landscape, successful startups like Facebook, TikTok, Tinder, Uber, Instagram, Zoom, and Spotify have one thing in common—they all started with a Minimum Viable Product (MVP). These industry giants began with nominal features and basic UI/UX designs, gradually evolving into multifunctional platforms providing an immersive user experience.

For instance, Facebook, introduced as an MVP on February 4, 2004, aimed to connect Harvard University students via a social network. The initial Facebook MVP included simpler features like User Profile, News Feed, Friend Request, and Photo Album. Over time, Facebook expanded its features and functionalities, currently boasting over 2.99 billion monthly active users.

The success stories of these platforms highlight the importance of building an MVP to test business ideas at a minimal cost. Designing and developing an MVP allows businesses to test concepts with real users, make necessary iterations, and reduce the risk before releasing the final product. As Eric Ries, author of “The Lean Startup,” emphasizes, having an MVP is crucial to mitigate risks, save costs, and attract funding.


Top 4 MVP Development Benefits to Attract Investors

Investors Can Check Product Functionality:

  • The MVP framework is essential for securing investment funding as it showcases the product’s functionality and its potential to solve real-world problems. MVPs also ensure customer-centric development by gathering feedback from real users, making improvements before the official launch, and increasing the chances of attracting investors.

Ensure Product Viability in the Market:

  • MVP app development focuses on testing the product’s viability in the marketplace—assessing demand and user willingness to pay. The openness to user feedback and modification minimizes business failure risks and increases the likelihood of success, providing investors with confidence in the product’s potential.

Investors Rely on Your Team:

  • Investors prioritize evaluating the minimum viable product before committing to a project because a strong team significantly contributes to a venture’s success. Successful MVP development demonstrates the team’s skills and experience, essential for gaining investors’ trust and securing funding.

Check Your Team’s Market Awareness:

  • MVP development involves thorough market analysis, showcasing the team’s understanding of market conditions and adaptability. This knowledge is crucial for gaining investors’ trust, as it indicates a deep understanding of the market and enhances the likelihood of securing funding.

Real-World Examples of Companies that Started with MVPs

Several industry leaders began their journey with MVPs and evolved into renowned brands:


  • Originating from Stanford University students’ idea in 2011, Snapchat’s MVP, Picaboo, allowed users to post disappearing content. Today, Snapchat boasts over 363 million daily active users worldwide.


  • Airbnb’s founders, with a limited budget, started by renting out their apartments’ top floor. Their MVP, a basic website with housing pictures, validated the idea, leading to Airbnb’s current market cap of $95.58 billion.


  • Frustrated by high taxi costs in San Francisco, Uber’s co-founders developed an MVP to connect iPhone users with cab drivers and enable credit card payments. Today, Uber is valued at $95.58 billion.


How to Build an MVP: A Step-by-Step Guide

Conduct Market Research:

  • Initiate the MVP development process with comprehensive market research to understand the target market’s evolving needs and preferences.

Identify Your Target Market:

  • Determine your target market and user persona by analyzing demographics and addressing key questions about their needs and motivations.

Outline Key MVP Features:

  • Focus on essential features that address your target market’s needs, avoiding feature overload. Jack Dorsey, former CEO of Twitter, emphasizes the importance of simplicity.

Build and Launch MVP:

  • Partner with an MVP development company to create a user-friendly product. Promote the MVP, gather user feedback, and use it to enhance the product’s value.

Analyze the Feedback:

  • After launching the MVP, analyze user feedback to identify strengths, weaknesses, and areas for improvement. Use this data to refine and enhance the product.

While there’s no one-size-fits-all approach to building an MVP, these steps provide a solid starting point. The ultimate goal is to attract investors, making it essential to tailor your MVP to showcase its potential for success.

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