June 1, 2021

What Is an MVP, and What Is It Used For?

One of the biggest concerns when it comes to launching a new product is whether people will actually want to use it and pay for it—otherwise known as product/market fit. Fortunately, there’s a way to minimize risk and gain greater clarity on your product’s viability as well as insights into your users and buyers. You start with a prototype. A prototype is a nonfunctional version of your product concept that conveys the core value proposition. The most common form of prototype is low-fidelity wireframes, but we’ve seen several creative ways of “faking” a product to see if users will use it and buyers will buy it. The last point is a critical and often overlooked component of product/market fit. Your product idea could be amazing, but if the price customers are willing to pay is insufficient to finance the business operations, then it’s not commercially viable.

During the prototyping phase, you are likely to get a lot of new information in a short amount of time. The advantage of prototypes over MVPs is that they are much cheaper and faster to change and re-test. This “build”-measure-learn process is also a great habit for product company cultures from the outset. You can even try multiple approaches or ways of talking about the concept with users and buyers and see what excites them. This process is called “mental modeling,” and the insights you mine here will have enduring value not only to product development but to sales, marketing, and customer service.

How Do You Know You’re Ready to Go from Prototype to MVP?

You should determine what this goal post should be before you get into prototype testing. The reason for this is the propensity for confirmation bias. You have a strong conviction around your hypothesis. This means you are NOT objective. There is a good reason for this: You have likely already staked some personal credibility on this idea. However, resist the urge to move forward before you’ve hit an objective milestone. You’re still early enough in the game (and other people’s money) to pivot if that’s the right thing to do.

One way to do this is to offer people to sign up or even pay to get in to the product’s beta launch—maybe at a discount. Tesla did this with their Model 3. While all the people who paid to get in line didn’t ultimately buy a Model 3, they had enough “proven demand” to make it worthwhile to move forward with production despite the fact that profitability still looked a long way off. With automobiles, even more than software, you have to spend a lot of money upfront. According to Scott Varho, SVP for Product Development at 3Pillar, “Ideally, you want your objective measure of product/market fit to be something where prospects have to give up something they value to get your product. People will tell you they ‘like’ your product idea, even when they have no intention of buying it, so be suspicious if all you have is a bunch of subjects who say they’d buy it. They want to be polite. This is not proof of demand.”

Once you hit your objective milestone for the prototype to prove product/market fit, it’s worthwhile to take a moment to discuss what you’ve learned and develop new hypotheses based on these findings. The exposure you’re getting here affects more than just the probability of early commercial success. Likely, you’ve heard things that give you insights into how your users and buyers think. You understand what excites them, What irritates them, What motivates them to take action. These insights can add incredible, enduring, and compounding value to your organization. You want to mine these and use them in every aspect of your business. But right now, you need to go from prototype to working product.

What is an MVP?

The “MVP” is an often-abused concept in product development and the “lean” communities. The letters stand for “Minimum Viable Product,” and there is confusion and disagreement about what qualifies as an MVP. How much is the minimum? Viable in what way? According to Scott Varho, “Some highly regarded thought leaders in our space even define prototypes and MVPs the same way. This can be a fatal mistake.” At 3Pillar Global, the Minimum Viable Product is your first production release of your product. It is a working product that satisfies the minimum requirements to solve your target problem or need.

Javier Trevino, Director of Technical Services at 3Pillar Global, offers this definition: “A minimum viable product defines the minimum effort to complete a process from point A to point B while disregarding anything that is not critical for the process to be successful. This is also known as a happy path.” But don’t be fooled by the word “minimum” here. Approached correctly, the MVP of your product continues the cycle of build-measure-learn. And since it is an actual product, you will need to build in the working foundation that even early adopting customers will expect. It needs to remain online, and it needs to have the infrastructure that comes with working products such as testing environments and basic security.

There are many corners you can cut during this phase, and you should take the shortest path possible to a stripped-down version of your product, but if it doesn’t actually work at a basic level, then it fails both the “minimum” test and the “viable” tests. Here, “viable” means it can stand up and handle real-world scenarios that a subset of early adopters would pay for—or seriously consider paying for—to solve the target need. In the Product Mindset, 3Pillar founder and president David DeWolf, talks about minimizing time to value and excelling at change.

The underlying reason for the confusion is that the emphasis is on learning what real users and buyers will do if your product exists. It is pretty standard for entrepreneurs to sell an idea and a plan to investors who will fund the plan. Then, the focus shifts to hiring and execution of that plan. What’s lost is a meaningful focus on learning that reduces risk and informs execution. This is what the “lean” movement is primarily about. At 3Pillar Global, we take that a step further by differentiating between the prototyping phase and the MVP phase. However, it’s essential to keep the focus on learning well after the MVP launch.

MVP Benefits

As discussed in the Product Mindset, digital products are never done (unless they are decommissioned). A successful set of prototype tests should give you the confidence to move into the build MVP phase, but there are still many open questions about your product that you haven’t explored or closed yet. Defining and releasing an MVP brings many benefits that will have a lasting and compounding impact on your products and the business around them. For starters, MVPs are built on the assumption that you will be following some form of Agile development. Among other principles, a mature Agile process employs design processes that facilitate rapid user feedback and iteration.

In practice, that means your product can get to users faster. It ultimately allows you to gather quality feedback that then informs development as soon as the next development cycle. One critical aspect of this approach is to put a feedback loop in place. If you’re not gathering new information from your evolving product, you don’t know if your investments are paying off until it shows in your renewal rates or other financial outcomes. The cost to re-acquire customers that have left you is several magnitudes more expensive than the cost of initial acquisition and retaining them. This iterative process of build-learn-build will provide a shorter path to realize ROI.

MVPs can also provide critical early insights. As Scott Varho points out, “The sooner you can start learning from your buyers and users with a functioning product, the sooner you can unlock value.”And value, in this case, means identifying a solution for a problem that customers would be willing to pay for and one that buyers and users can’t go without.

Another great benefit to releasing an MVP is that it can save your company time and money in the long run. Varho explains, “If your potential buyers don’t see the potential or don’t think it’s valuable enough to pay (or pre-pay for a future version), then you may not have a product worth continuing to invest in. By sustaining your team’s interest in feedback, you will not only be able to determine that a pivot is needed, but have higher quality hypotheses on where to steer the product/company.”

What is the MVP Used for?

Along with a host of benefits, there are multiple practical uses and applications for a minimum viable product.

At the end of the day, your MVP is still a product. It’s a very early stage product, but it’s a product nonetheless, and as such, it should be viewed as a functioning learning tool. Among other things, an MVP can help you prove hypotheses on value generation and success metrics. You can’t learn if you don’t measure. You want to use your MVP as a way to test your product’s potential value in the market by using whatever success metric is appropriate for your use case.

Related to the above point, a minimum viable product is a useful tool to assess risk. Because an MVP represents a minimal usable feature set, it’s a relatively quick way for you to determine the risks involved in launching the full-fledged product.

If you’re looking to validate assumptions about your product (and you should be), an MVP is a critical component of your strategy. The term MVP was originally coined by Eric Ries as part of his Lean Startup Methodology, with a strong focus on validation. He says, “The minimum viable product is that version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort.”

While Ries discusses the minimum viable product in relation to startups, it’s still a valid and critical tool for more established companies to test the viability of their product as well. That said, an MVP will look different for startups vs. established companies. Bernie Doone, Director of Information Services at 3Pillar Global, points out that, “Viable for an established company will mean the product can generate revenue and ROI, while viability for a startup may solely be rapidly learning and iterating. For both, the common goal is establishing product/market fit and self-funding products.”

Key MVP Characteristics to Consider

To learn the most and get the full value from your MVP, keep some critical considerations in mind. First and foremost, spend as little time and money on the MVP as possible. Otherwise, it defeats the purpose of low-risk, low-cost validation.

Diana Sabau, Technical Manager at 3Pillar Global, explains: “A Minimum Viable Product should be created to validate an idea or assumption as fast as possible and measure customer traction, without investing too many resources from the start. Such a product should contain a smaller but cohesive set of features that could attract users to discover the application, give feedback so that the development team can iterate and ideate further and improve it.”

Other characteristics of an MVP include:

  • An MVP must be usable. It’s a product, remember, and if it doesn’t function, you can’t test anything with users.
  • An MVP must seek to solve a problem. If the MVP doesn’t solve a problem, then there won’t be any product/market fit. Part of the reason you spend as little time and resources as possible on your MVP is to minimize your own risk if it turns out your assumptions were wrong about the problem you solve.
  • An MVP is the minimum version of your vision. But “minimum” doesn’t mean low quality. As The Pragmatic Institute points out, “The “minimum” is that it needs to viably solve early customers’ top problems from day one, building only those features at first and putting everything else in the backlog until we’ve achieved product/market fit.” In other words, while it is meant to use as little resources as possible, it’s not a throwaway release; it requires careful consideration. Eric Ries cautions that: “ … [It] is decidedly not formulaic. It requires judgment to figure out, for any given context, what MVP makes sense.”
  • Your MVP needs to be built to assume change. Bernie Doone states, “The Minimum Viable Product must excel at change – hopefully based on new information from buyers and users, but the pressure to make changes can also come from competition, issues found by customers, or the need to expand from a product to a platform strategy. No matter the reason, unlike prototypes, your MVP is the first releasable product and the foundation for every release to follow.”

One of the primary concerns we hear about in building out an MVP is,“How much is enough?” If it’s a mature market or your brand mature, there will be pressure to make it great before it hits the market. Another concern is that the competition will see your product, and so you might hold off until you feel there’s enough distance between you and current or future competitors. This temptation should be resisted in all but truly exceptional cases.

To protect your brand and to give early adopters a reason to come back if they don’t fall in love with your product at first, you can launch under “alpha,” “beta,” or “pilot.” We typically recommend that the highest fidelity prototype is called the pilot, and the MVP is your “alpha.” This gives you the option to go to beta if your results on the MVP aren’t living up to expectations. Each label is a chance to re-set expectations within your company, with investors as well as buyers and users. Competitors may be able to copy your idea, but if they don’t understand why it’s resonating in the market, they are at a distinct disadvantage in the medium and long run.


The minimum viable product, or MVP, is a crucial step in testing the viability of your software product. It’s all about gathering the maximum amount of knowledge through the minimum feature set to prove (or disprove) your most crucial hypotheses about your product’s viability.

But to ensure that your learnings are accurate, it’s wise to balance care and consideration with agility. Aline Perde, Technical Manager at 3Pillar Global, says, “I always see an MVP as the Minimum LOVABLE Product. It’s the connection of all the most critical parts in the simplest possible fashion.”

At 3Pillar Global, we strive to minimize time to value, solve for a real need, and excel at change. Creating an MVP puts these foundational principles into practice. Learn more about 3Pillar’s services and how we can help you create a minimum viable product to test and validate your assumptions with real customers by contacting an expert today.