For businesses that are new to software development terminology, the abbreviation “MVP” has little to tell. However long we talked about the benefits that a minimum viable product brings, these clients would ask for an example of a company that actually benefited from minimum viable product development.
For the businesses that are already well-aware of all the possibilities and prospects of the software development market, the example of a successful MVP is the last argument they need in order to make a decision to engage in MVP development.
For minimum viable product developers, the example of a startup MVP that grew into a tech giant is a necessary motivation. This example once again proves that their job is important and deserves the best effort.
So here I am, writing an article for new and experienced businesses and developers. Here, I will tell you more about:
Success legends – well-known stories of successful businesses that are now rocking the world of tech but started as MVPs,
Success stories – less known but notable stories of startups, who developed MVP and won,
Failed startups – stories about startups that failed because of no MVP validation.
If you would like to learn more about what is Minimum Viable Product or how to create a Minimum Viable Product...
Check my recent article where I explain this concept using the example of a bicycle. This explanation on why and how to develop MVP could not be any simpler!
Success Legends & MVP
Facebook must be the best-known website of modern times. For sure, not everyone likes it, and its reputation is stained by recent data safety scandals, but everyone has heard about it at least once. The success story of Facebook began in 2004 with a minimum viable product. According to Independent, Facebook was initially called “Thefacebook”, and it connected students from some American schools. The idea was not new. Yet, Thefacebook implemented this idea in an innovative, extremely simple way. Due to this simplicity and user-friendliness, Thefacebook started growing in a geometric progression. This is how a single product MVP helped the Facebook founders to introduce their promising idea to the market.
Twitter was founded in 2006, originally named “Twttr” and introduced as an SMS communication channel between employees at Odeo – a podcasting platform. At the stage of MVP, Twitter featured no replies, hashtags, reposts, or direct messages, only SMS messages between the users. The article by Business Insider states that each Odeo employee spent hundreds of dollars on SMSs in Twttr – this was the ultimate proof of the viability of this platform. Odeo soon failed when Apple announced iTunes, but Twitter continued to live.
In 2007, Twitter was renamed and developed as a stand-alone social networking platform. At that point, it was developed as a community of users, who would share their answers to “What you are doing?”. Today, the idea has evolved greatly – Twitter is now one of the major sources of news, celebrity rumors, and jokes. With a net worth of $5.1 billion (as of March 2020 according to Business Insider), it unites over 330 million active users a month. Yet, Twitter would never grow to the extent that it is now unless the initial idea was tested on the actual market and unless users could leave their feedback.
Instagram was launched relatively not long ago – in 2010. In 9 years, it managed to grow into one of the most favorite and frequently used social media platforms, especially among the younger generation.
The MVP of Instagram was introduced as a mobile application offering photo filters. The first users could take a photo, edit it with filters, and save it to the device. This idea appeared when the girlfriend of Kevin Systrom – Instagram’s CEO – suggested that she would like her pictures to be beautiful, Systrom admitted in his interview with Forbes. However, this MVP proved that filters were not enough. The app skyrocketed when the feature of photo sharing was added.
Dropbox is a worldwide-known file hosting service, which was released in June 2007. Nowadays, it has over 600 million users. Yet, when the MVP was introduced, it had a single user – Drew Houston, the co-founder of Dropbox – and about 75 thousand fans worldwide. Here is why. When the idea of Dropbox was first introduced to the market, no software was actually released. Instead, Houston released an explanatory video, which demonstrated the possibilities and innovative functions of this technology. In only one night, the number of early adopters reached 75 thousand, according to TechCrunch. The Dropbox team realized that their idea will be popular, released the product to the market, and generated the first million of active users in under 10 months. This is how Dropbox used minimum viable product to test their business hypothesis and to learn about actual market needs.
Airbnb is now the first website where travelers go to look for accommodation. Launched in August 2008, it today has about 150 million active users. In the beginning, the idea seemed unrealistic: to decentralize the hospitality industry and to let property owners earn extra revenue. According to Business Insider, it all started with 3 air mattresses. The Airbnb founders Brian Chesky and Joe Gebbia developed this idea when they decided to rent a room in their apartment to the attendees of a design conference in San Francisco – otherwise, Brian and Joe would not make their ends meet.
The MVP was as simple as it only could be: the founders created a very primitive website, posted pictures of their apartment, and soon received 3 volunteers willing to rent the room. Having gathered feedback from their first three users, they adjusted their idea and started working on launching a full-scale air bed & breakfast service. Today, it is the largest website of its kind, which however might not have reached its heights if the idea was not tested with MVP.
Spotify was founded back in 2006, and today, it has over 250 million active users per month. Like every other success story in our article, this one also began with a product MVP. In this case, MVP was used to test one core feature, if it will be popular and how it can be improved. According to BBC, the idea was to solve the music copyright problem and to kick such dubious websites as Napster, LimeWire, and The Pirate Bay out of the music market.
The first Spotify MVP was developed as a desktop app offering music streaming services. Only after this idea proved successful in the American market, the development team started working on building mobile apps, engaging various artists, and extending their solution abroad. You can only imagine how much money they would lose if they jumped straight into full-scale development without testing the idea first and if it did not work.
Similarly to Airbnb, the idea of Uber was born when two friends felt a personal need for it. One winter evening in Paris, Garrett Camp and Travis Kalanick could not find a ride, so they started thinking about how to improve the system. The official Uber website states that the first app was introduced in March 2009, but the first user requested a ride only in July 2010 in San Francisco. A year later, the idea was extended internationally to Paris – the city where it was born. Today, Uber functions in 63 countries and unites about 4 million drivers and 75 million active users.
You will not be surprised if I say that their story also began with MVP. Prior to the launch of the app in San Francisco, the service was first tested in New York. A simple iOS app was released and three drivers on black limousines (not the cheapest MVP implementation, isn’t it?) were driving users around the city. To gather user feedback, the founders used rates and comments on the AppStore. This is when they implemented an in-app payment option, which became one of the greatest competitive advantages of Uber. Only after the app was adjusted to the wishes of users, Garrett Camp and Travis Kalanick launched the full-scale app in San Francisco.
Groupon was launched in 2008 as a side project of Andrew Mason, the founder of The Point. The Point did not work. Groupon, to Mason’s surprise, did. By the end of 2019, Groupon had about 44 million unique customers, according to Statista. It turned into one of the most popular e-commerce marketplaces globally. So how did it begin?
Andrew Mason had been working on The Point, a collective action platform, for 11 months until this project failed in 2008. Apparently, there was no need for such a solution, so all the work on the project basically went in vain. Almost. One of the projects pushed on The Point was to help people save money when buying goods or services, and this is how the idea for Groupon was born. This time, however, the founder remembered to test the idea with the market. So, he launched a product MVP first.
The Groupon MVP was implemented as a WordPress blog. Here, the first users could purchase coupons for a local pizza shop in Chicago. Their requests would be handled manually by email. Such an approach helped Mason to save on software development and to test his idea without extra expenses. After the idea proved to be very popular, the full-scale product was introduced and since then, never stopped growing.
Zappos had been founded a long time before other aforementioned companies were established. In 1999, when the market did not hear about the concept of an online store, the founder of Zappos Nick Swinmurn decided to change the way things were done. Yet, he had to make sure that this service would be loved and used.
Instead of setting up his own store, Swinmurn created a website, took pictures of shoes in a local mall, and posted them online. According to the article at Harvard Business Review, once he received an order, he ran to the mall, bought the shoes, and shipped it to the customer.
It turned out that people loved ordering shoes online instead of going to the mall and buying them. The idea swiftly proved to be profitable, so Nick Swinmurn easily found investors and started developing his business. Shortly after, in 2001, the platform would bring $8.6 million in revenue.
In this case, maybe, Zappos would succeed regardless of if there was MVP or not. Yet, making sure that the idea would work definitely did not hurt anyone. After all, what is MVP in software development? It is your safety belt, and you hope that it does not come in handy.
Success Stories & MVP
ScrapingBee is an API for web scrapping, which greatly facilitates the lives of web developers, SEO specialists, and lead generation specialists. The two founders of ScrapingBee tried to launch two startups before, but both failed. ScrapingBee became their third business idea, and using the experience of failures, they managed to get it off the ground. Today, this platform generates about $3,000 monthly, and this sum is growing together with the number of users.
The founders of ScrapingBee Pierre de Wulf and Kevin Sahin had a lot of experience with ready-made web scraping solutions, but none of them was perfect. So, they decided to build one of their own, which would help the user handle headless browser, proxies, and CAPTCHAs.
What does MVP have to do with ScrapingBee? There was none. But there was an MVP for their previous, similar but different startup PricingBot. Once the MVP proved that PricingBot would not win the market, they updated their idea and business strategy. The code from the PricingBot MVP was reused to build ScrapingBee. Shortly after, they had a successful and quickly growing in popularity product.
Could you imagine that a Slack extension could generate $80,000 a month? I guess, nobody could, but Alex Kistenev decided to give it a try. Alex Kistenev is a CEO and a co-founder of Standuply – a Slack extension for project management and team education. Basically, it is a digital Scrum Master bot, which helps a PM to make remote Agile teams more effective and efficient. In two weeks after being launched in March 2017, the product has already been used by one thousand teams.
The MVP development works lasted for 9 months, and the concept was changed at least 3 times. Yet, through continuous market testing of the product, the team managed to broaden the range of its potential use cases and to win the love of its users. It seems that $80,000 a month is not a limit for Standuply.
JustReachOut is a company that aims to make the PR research process easier. Here, entrepreneurs can pitch to journalists and boost their PR presence. Today, the tool is used by more than 5 thousand users and brings about $30,000 in monthly revenue.
Initially, Dmitry Dragilev, and experienced marketing specialist, strove to share his experience in marketing and PR with his peers. The easiest way to do so was to develop a relevant tool. He developed an MVP to see if there are people who need him to share his experience, but he did not want the product to be something traditional. With each version of MVP, he and his team developed more understanding of what features they do or do not need. They managed to make the platform “loveable’ by everyone once they rolled out a well-polished final version.
ClaimCompass is the startup that successfully disrupted the airline business – it lets users who had their flights delayed for at least 3 hours receive a compensation of minimum $600. What makes this service different from many others is that they promise to sue an airline if it refuses to comply. Introduced in 2016, the company brings a monthly income of about $100,000 per month.
When the company introduced an MVP, they conducted the money collection process manually only to see if their service would be popular. Apparently, the market demand for their services exceeded their expectations. Once they adjusted their service to the needs and interests of their users, the company launched a full-scale, one hundred percent automated platform.
Buffer is a tool for social media management, which greatly facilitates the lives of marketing and SMM managers. It lets users edit and schedule posts on LinkedIn, Facebook, Instagram, and Twitter. Today, this tool has over 4.5 million registered users and brings more than $16 million of revenue per year. Here at KeenEthics, we also eagerly use Buffer to manage our social media presence.
As for minimum viable product, Joel Gascoigne, the founder of Buffer, wanted to check if people would be interested in using and paying for such a service. Thus, he created a landing page where he explained the features of the future product and let users sign up to use it. The success of the landing page proved that the idea was very promising. In only seven weeks, the first version of the final product was rolled out. Since then, it did not stop growing.
No MVP & Failed Startups
Singulution was introduced as a sale & business management solution for multi-location vendors. Having spent 10 months and $30,000 developing this idea, he did not manage to take it off the ground. The founder of Singulution, Hunt Burdick, admits that the problem was that he had not engaged customers until it became too late. He built what he thought people needed, but he never asked them what they actually needed. Eventually, the project was outrun by the competitors and absorbed by another startup.
140 Canvas was a software solution like no other. Here, a user could generate a custom tweet from any person with any text, any number of likes, reposts, and comments. Then, they would order canvas with this custom tweet, which would work perfectly as a present. At least this is what the founder of this startup, Harry Dry, thought.
He developed a web platform, which attracted 17 thousand users. At that point, Dry thought that he found a goldmine. Yet, only 20 users out of 17 thousand converted into sales. It turned out that few people shared Dry’s excitement about fake tweets, and nobody needed this product. Developing this solution simply did not pay off. So, what is MVP in product development? It is a way to make sure that there are users who need your product. Today, the website is not on the web, and the domain name is sold.
Phoenix is a software startup with an idea beyond anything you could have imagined. It lets a user send the last message to their beloved ones after the user’s death. Here, a user prepares a message and indicates emails to whom they want it to be sent. Then, there is a “check-in” button, which the user presses to notify the app that they are alive. If a user does not check in for a year, the app assumes that they are dead and sends out the messages. The startup soon failed because, out of thousands of visitors, only 45 had signed up. The problem was with the target audience: younger people did not care much about death, and older people were not in good terms with the technology. In general, the solution did not find its target audience, so it died out. The expenses, however, were much more significant than revenues. The development itself took about half a year. Also, the founder paid for an expensive domain name, a lawyer’s services, an SSL certificate, and many more.
This case is particularly interesting because, here, the startupper offers a list of 20 mistakes to avoid. Can you guess, what the recommendation #20 is? Yes. Build the MVP!
There are many more cases, which are united by a single cause of failure: No MVP validation. Look through Failory to read about a lot more examples yourself. Do not forget to choose “No MVP Validation” in the “Cause of Failure” filter.
Let’s Sum Up!
What is MVP in software development? It is a chance to test the waters of a certain market without diving headfirst. You can assess the reaction of the market, its interest in your particular product without investing a lot of time and finances into the development process. How to create an MVP? You need to hire a trusted MVP development partner. In fact, the development of a minimum viable product, on average, is six times shorter than the development of a final software product. You can use the time you save to improve your idea to make it reach the highest peaks of tech.
And the last point I would like to mention relates to these unstable times. During the latest economic recession of 2007–2009, such great companies as Dropbox, Airbnb, Groupon, and Uber were founded. The recession of 2020 is terrifying, but you should not put away your business idea. After this recession is over, the world will see a few promising startups on their rise. Let your startup be one of these.