Both young and established companies generate ideas for new apps, securing budgets and other resources. But is it enough to succeed?
Few startups are profitable
According to the U.S. Bureau of Labor Statistics, ~20% of new private businesses fail within the first year, with 86.9% getting closed within 30 years of operation (1994–2024 data). For early startups, these figures are even more dramatic. Most venture-backed companies (75%) never return cash to investors, a Harvard Business School study found in 2012. Besides, “first-time entrepreneurs have only an 18% chance of succeeding,” the researchers revealed earlier.
The reasons are many. However, the two main challenges are the lack of funding and struggling with finding the product–market fit (CB Insights, 2021).
The reasons are many. However, the two main challenges are the lack of funding and struggling with finding the product–market fit (CB Insights, 2021).
To address the issues, startups deliver proof of concepts (POC) and minimum viable products (MVP) to evaluate the market need, trying to stay lean and avoid substantial investments. Yet, few succeed even at this stage.
This blog post explores top 10 challenges that hinder MVP idea validation and suggests how to address these pitfalls.
This blog post explores top 10 challenges that hinder MVP idea validation and suggests how to address these pitfalls.
Premature MVPs lead to abandoned products
Having allocated budgets and resources for a POC or an MVP, companies often misjudge their capabilities and the market needs at the very beginning. This may lead to money being spent in vain—on products that gain no traction. Why?
1. Poor problem validation
Many founders build solutions for problems that aren’t significant enough for users to pay for. At the same time, users may express one issue, but their real problem might be different, which leads to misidentifying the real pains. Another mistake is not validating these pains with real users and relying on assumptions instead of direct feedback.
2. Overbuilding the MVP
Sometimes, companies rush to build the full product right away and put as many scenarios into an MVP as possible at once. This can result, literally, in years of development in stealth mode and even the project's termination before it ever reaches production. Instead, the MVP should focus on the core, most valuable functionality that can be released quickly, rather than on an extensive feature set or “nice-to-haves.” Spending too much time on perfect UI/UX before validating the concept can also lead to wasted resources.
3. Undervaluing market research
Assuming you have a unique idea without analyzing competition can result in redundancy in the market. Even if the problem is real, the market may be too small to sustain a new business or the need is not as important as it was before. Not understanding user behavior is another problem: what customers say vs. what they want vs. what they do can be very different.
4. Weak feedback loops
Not iterating based on the received feedback negates the purpose of testing an MVP. If you consider an MVP as a fixed foundation that will not change, you will likely fail at the end, delivering an abandoned product.
5. Wrong technology stack or architecture decisions
Unwise architecture and technology choices may produce development deficiencies at the later stages. As a result, a prototype built for a small focus group or presentation purposes may struggle with scaling very soon. Overlooking a cross-platform approach may limit early adoption or require 2x more investments before they are justified.
Many founders build solutions for problems that aren’t significant enough for users to pay for. At the same time, users may express one issue, but their real problem might be different, which leads to misidentifying the real pains. Another mistake is not validating these pains with real users and relying on assumptions instead of direct feedback.
2. Overbuilding the MVP
Sometimes, companies rush to build the full product right away and put as many scenarios into an MVP as possible at once. This can result, literally, in years of development in stealth mode and even the project's termination before it ever reaches production. Instead, the MVP should focus on the core, most valuable functionality that can be released quickly, rather than on an extensive feature set or “nice-to-haves.” Spending too much time on perfect UI/UX before validating the concept can also lead to wasted resources.
3. Undervaluing market research
Assuming you have a unique idea without analyzing competition can result in redundancy in the market. Even if the problem is real, the market may be too small to sustain a new business or the need is not as important as it was before. Not understanding user behavior is another problem: what customers say vs. what they want vs. what they do can be very different.
4. Weak feedback loops
Not iterating based on the received feedback negates the purpose of testing an MVP. If you consider an MVP as a fixed foundation that will not change, you will likely fail at the end, delivering an abandoned product.
5. Wrong technology stack or architecture decisions
Unwise architecture and technology choices may produce development deficiencies at the later stages. As a result, a prototype built for a small focus group or presentation purposes may struggle with scaling very soon. Overlooking a cross-platform approach may limit early adoption or require 2x more investments before they are justified.
7. Unreal expectations
Vendors often get requests to develop complex systems similar to google.com, facebook.com, Airbnb, etc., at the price of a used car. Or, the customer expects that the product will be selling itself right from the beginning. Besides, companies may underestimate hidden expenses, which include but are not limited to infrastructure, third-party APIs, security, compliance, maintenance, bug fixes, etc. As a result, the plans become unrealistic and milestones keep shifting.
8. Legal and compliance oversights
Depending on the industry, failing to comply with GDPR, HIPAA, or other regulations can cause major issues. This is especially important for highly regulated industries—such as healthcare, banking, and finance. Furthermore, even an MVP needs clear terms of services and user agreements to protect the business, its partners, and customers. Finally, not securing intellectual property can expose your ideas and code to competitors.
9. Poor monetization and funding strategies
Just because users love the product doesn’t mean they’ll pay for it. If you don’t have a clear monetization plan early on, it will be hard to efficiently pivot/iterate later. At the same time, failing to have multiple business strategies in mind (e.g., subscriptions, licensing, partnerships, ads, etc.) may lower your chances of success. In addition, neglecting marketing, promotion, and community building will likely keep your user base from growing.
10. Scaling too early or too late
Premature scaling can lead to inefficiencies, wasted resources, and even startup failure/bankruptcy. A lean team is better until a clear demand for scaling exists. Before you manage to find the product–market fit, focus on a niche audience instead of broadening with no revenues secured. However, inability to expand when it is really needed (e.g., when the product eventually finds its adoption) can also lead to instability, downtimes, and stagnation. A 2024 survey by GoodFirms found that resource constraints, such as unique technical expertise and tools, are a significant challenge for 52.3% of businesses when creating MVPs.
11. Lack of clear (or any) metrics and KPIs
If you don’t define what success looks like for your MVP, you won’t know when to pivot or persevere. High traffic or app downloads do not directly correlate with revenues if users don’t convert into paying customers. If you do not track intermediate metrics that link user count, their actions, and your financial goals, you won’t be able to evaluate the efficiency of your advertising dollars. Therefore, without ongoing monitoring of key performance indicators (KPI) connected to actual—or at least potential—payment flows, the ship won’t sail. That said, do not ignore metrics related to retention rates, as well, if you aim for sustained success.
Vendors often get requests to develop complex systems similar to google.com, facebook.com, Airbnb, etc., at the price of a used car. Or, the customer expects that the product will be selling itself right from the beginning. Besides, companies may underestimate hidden expenses, which include but are not limited to infrastructure, third-party APIs, security, compliance, maintenance, bug fixes, etc. As a result, the plans become unrealistic and milestones keep shifting.
8. Legal and compliance oversights
Depending on the industry, failing to comply with GDPR, HIPAA, or other regulations can cause major issues. This is especially important for highly regulated industries—such as healthcare, banking, and finance. Furthermore, even an MVP needs clear terms of services and user agreements to protect the business, its partners, and customers. Finally, not securing intellectual property can expose your ideas and code to competitors.
9. Poor monetization and funding strategies
Just because users love the product doesn’t mean they’ll pay for it. If you don’t have a clear monetization plan early on, it will be hard to efficiently pivot/iterate later. At the same time, failing to have multiple business strategies in mind (e.g., subscriptions, licensing, partnerships, ads, etc.) may lower your chances of success. In addition, neglecting marketing, promotion, and community building will likely keep your user base from growing.
10. Scaling too early or too late
Premature scaling can lead to inefficiencies, wasted resources, and even startup failure/bankruptcy. A lean team is better until a clear demand for scaling exists. Before you manage to find the product–market fit, focus on a niche audience instead of broadening with no revenues secured. However, inability to expand when it is really needed (e.g., when the product eventually finds its adoption) can also lead to instability, downtimes, and stagnation. A 2024 survey by GoodFirms found that resource constraints, such as unique technical expertise and tools, are a significant challenge for 52.3% of businesses when creating MVPs.
11. Lack of clear (or any) metrics and KPIs
If you don’t define what success looks like for your MVP, you won’t know when to pivot or persevere. High traffic or app downloads do not directly correlate with revenues if users don’t convert into paying customers. If you do not track intermediate metrics that link user count, their actions, and your financial goals, you won’t be able to evaluate the efficiency of your advertising dollars. Therefore, without ongoing monitoring of key performance indicators (KPI) connected to actual—or at least potential—payment flows, the ship won’t sail. That said, do not ignore metrics related to retention rates, as well, if you aim for sustained success.
So, how to avoid these pitfalls?
When a company builds a product without understanding what is needed in the long run and what exact pains the app should address, the risks increase. To mitigate that and transform unclear, vague ideas into value, early startups should go through thorough discovery, validation, and adaptation.
But what should you include in the MVP to validate your ideas? Right, the most valuable functionality that can be released soon. How to select the most important features? With market research, user/stakeholder interviews, A/B testing, analytics, behavior analysis, etc. The prototype should not be a perfect product, it should bring potential value at an affordable cost.
But what should you include in the MVP to validate your ideas? Right, the most valuable functionality that can be released soon. How to select the most important features? With market research, user/stakeholder interviews, A/B testing, analytics, behavior analysis, etc. The prototype should not be a perfect product, it should bring potential value at an affordable cost.
Discover, deliver, evaluate, adjust, repeat.
Ongoing engagement with focus groups—consisting of pilot users—can provide comprehensive insights on both hypotheses and real adoption. Professional business analysts and product owners have plenty of tools to identify user needs, reveal customer behavior insights, generate new ideas, and more. Interviews, workshops, surveys, brainstorming, games, modeling, canvas, scorecards, observation, decomposition, and analysis (SWOT, root–cause, risks, etc.) are only a few of the possible tools.
Looking ahead to scaling and maintenance issues, a seasoned software architect or a CTO keeps numerous technology options in mind. It is worth letting the founders know what might be needed in a year or when the user base suddenly surges. At the same time, early investments into future requirements should be justified, so at least lay out the foundation for proper architecture, avoiding poor practices like spaghetti code.
Still, the more your product requires security, privacy, compliance, or extra protection of sensitive data, the more important development best practices become. Test coverage, protection against code injections, not storing passwords in the URLs (yes, this is seen in MVPs and POCs too often), etc., are the must.
As mentioned earlier, the tools for prototyping and cross-platform technologies can accelerate your MVP delivery and ensure reusable code.
Monetization won’t happen suddenly and on its own, without your effort. Though you should wisely invest every dollar of your budget, marketing and promotion should be definitely included in your business (and action) plan. Depending on your funding model, you may also need to dedicate some time and resources to developing investor/VC relations.
Don’t forget about compliance and the legal part of your business. It may happen that what is legal in one country could be prohibited in another or be limited/regulated, requiring strict licensing. The TikTok ban or cryptocurrency legislation are examples of how different countries approach the same subject.
Startups should monitor a combination of financial, customer, and operational KPIs to ensure sustainable growth and informed decision-making. (Our experience says that too many companies do not measure anything at all.) The metrics may include, just to name a few:
Exploring earned value management may also be useful. Still, the more a company operates, the more it should focus on customer-centric KPIs, according to a 2018 study by McKinsey.
Looking ahead to scaling and maintenance issues, a seasoned software architect or a CTO keeps numerous technology options in mind. It is worth letting the founders know what might be needed in a year or when the user base suddenly surges. At the same time, early investments into future requirements should be justified, so at least lay out the foundation for proper architecture, avoiding poor practices like spaghetti code.
Still, the more your product requires security, privacy, compliance, or extra protection of sensitive data, the more important development best practices become. Test coverage, protection against code injections, not storing passwords in the URLs (yes, this is seen in MVPs and POCs too often), etc., are the must.
As mentioned earlier, the tools for prototyping and cross-platform technologies can accelerate your MVP delivery and ensure reusable code.
Monetization won’t happen suddenly and on its own, without your effort. Though you should wisely invest every dollar of your budget, marketing and promotion should be definitely included in your business (and action) plan. Depending on your funding model, you may also need to dedicate some time and resources to developing investor/VC relations.
Don’t forget about compliance and the legal part of your business. It may happen that what is legal in one country could be prohibited in another or be limited/regulated, requiring strict licensing. The TikTok ban or cryptocurrency legislation are examples of how different countries approach the same subject.
Startups should monitor a combination of financial, customer, and operational KPIs to ensure sustainable growth and informed decision-making. (Our experience says that too many companies do not measure anything at all.) The metrics may include, just to name a few:
- burn rate
- gross margin
- return on investment
- customer acquisition cost
- average revenue per user
- customer lifetime value
- churn rate
- net promoter score
- active users
- conversion rates
- time to market
Exploring earned value management may also be useful. Still, the more a company operates, the more it should focus on customer-centric KPIs, according to a 2018 study by McKinsey.
An example of MVP validation
One of the established civil engineering contractors in Saudi Arabia, with hundreds of heavy mechanisms and vehicles in its fleet, turned to us with an idea for a startup. The goal was to develop a handy, Uber-like app that could reduce equipment idling and open doors to new revenues, facilitating machinery renting/lending.
However, traditional approaches buried the project under months of development. The situation changed when we helped the company discover the most critical functionality for an MPV first and select 9 documented use cases to focus on. Besides, we assisted the startup in formulating a set of hypotheses that were then validated by applying iterative development and adopting the Scrum methodology.
For the startup, we ran several focus group sessions with potential customers, which helped the team prioritize hidden user needs that were not apparent. The focus groups involved individual app users, civil engineering experts, equipment operators, etc. Based on that, in addition to heavy vehicles, the company decided to include more lightweight offerings into their app, such as repair tools and servicemen assistance.
By delivering the pieces of valuable functionality to early users each 2 weeks, the startup was then able to validate its ideas within a couple of months (or even weeks), instead of years. These initiatives eventually resulted in enhanced app adoption among pilot users and minimized equipment idle time, saving tens of thousands of dollars.
However, traditional approaches buried the project under months of development. The situation changed when we helped the company discover the most critical functionality for an MPV first and select 9 documented use cases to focus on. Besides, we assisted the startup in formulating a set of hypotheses that were then validated by applying iterative development and adopting the Scrum methodology.
For the startup, we ran several focus group sessions with potential customers, which helped the team prioritize hidden user needs that were not apparent. The focus groups involved individual app users, civil engineering experts, equipment operators, etc. Based on that, in addition to heavy vehicles, the company decided to include more lightweight offerings into their app, such as repair tools and servicemen assistance.
By delivering the pieces of valuable functionality to early users each 2 weeks, the startup was then able to validate its ideas within a couple of months (or even weeks), instead of years. These initiatives eventually resulted in enhanced app adoption among pilot users and minimized equipment idle time, saving tens of thousands of dollars.
The startup went on with a modular monolith architecture for its MVP, but liked the idea of grouping business logic in a way that will enable shifting to microservices as the load grows. This was achieved by Clean Architecture (where infrastructure was decoupled from business logic and UI), Command Query Responsibility Segregation (CQRS), etc.
Using Flutter for multi-platform development enabled the use of the same codebase for Android and iOS, which significantly reduced the engineering effort needed (by 30–50%).
Assisting the startup during discovery, our lawyers found out that some of the use cases would require licensing in the Persian Gulf region. To avoid additional expenditures, we helped the customer adjust user workflows, services, and operations to stay within the open, unobstructed business environment.
A similar scenario we observed when integrating with local payment gateways. Therefore, we liaised with providers for legal analysis and selected the optimal partner out of 7 possible options.
To sum up this article, talk to real users early and often, not just hypothetical customers. Keep your MVP simple but usable, focus on the absolute core value proposition. Validate monetization and test if people are willing to pay before scaling. Stay flexible—be ready to pivot based on data, not assumptions. Measure the right metrics and focus on engagement, retention, and user behavior over surface-level numbers.
By anticipating these challenges, a startup can improve the chances of successfully validating its ideas and develop an MVP appreciated by the market.
Using Flutter for multi-platform development enabled the use of the same codebase for Android and iOS, which significantly reduced the engineering effort needed (by 30–50%).
Assisting the startup during discovery, our lawyers found out that some of the use cases would require licensing in the Persian Gulf region. To avoid additional expenditures, we helped the customer adjust user workflows, services, and operations to stay within the open, unobstructed business environment.
A similar scenario we observed when integrating with local payment gateways. Therefore, we liaised with providers for legal analysis and selected the optimal partner out of 7 possible options.
To sum up this article, talk to real users early and often, not just hypothetical customers. Keep your MVP simple but usable, focus on the absolute core value proposition. Validate monetization and test if people are willing to pay before scaling. Stay flexible—be ready to pivot based on data, not assumptions. Measure the right metrics and focus on engagement, retention, and user behavior over surface-level numbers.
By anticipating these challenges, a startup can improve the chances of successfully validating its ideas and develop an MVP appreciated by the market.