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Many startups fail to reach the final stage, primarily because they ignore the first two steps.

Why Do 90% of Startups Fail?

Statistically, 90 out of 100 startups do not survive. I have seen this repeatedly while working in both outsourcing and product-based companies. But what is the main reason behind this unfortunate outcome?

(According to CB Insights, the primary reason is the lack of market demand, with 42% of startups failing for this reason.)

From my experience, I identify two main causes:

  1. An unviable product idea
  2. Skipping the MVP stage

Trap #1: A Weak Product Idea from the Start

Example 1: “Let’s Create a New Facebook!”

This is a doomed idea because Facebook already exists. To survive, your product needs a unique feature that will attract and retain its own audience. This is why alternative social media platforms have emerged:

Example 2: A Crypto Exchange with the Best Rates

I worked on a project where a well-funded team set out to create a cryptocurrency exchange with:

✅ A solid budget
✅ An outsourced development team
✅ A well-thought-out concept

However, the core algorithm, responsible for scanning various exchanges for arbitrage opportunities, was ineffective. This only became evident at the very end, after the admin panel and three applications had been developed.

💡 Key Takeaway:
To launch successfully, you need more than just money—you need a deep understanding of your niche. If your product relies on third-party IT services (e.g., crypto exchanges), you may need real partnerships with those providers.

Trap #2: Skipping the MVP Stage

In my opinion, this is the #1 reason for failure. Skipping MVP is like building without a foundation—it leads to:

I am a UI/UX designer, and for the past six years, I have designed complex platforms (eCommerce, crypto, trading, etc.). Here’s what I frequently observe:

Clients don’t plan architecture or feature lists—they jump straight into UI/UX design.
They pack their product with too many features, spend months developing it, but never release it.

design flow MVP

How to Launch an MVP the Right Way?

Let’s say you’re building a local food delivery app (for example). Before development starts, it’s crucial to:

1. List All Features

This is your roadmap for the next few years.

📌 Example Feature List:

  • Menu
  • Product pages
  • Payment methods
  • Delivery & return info
  • Offline store pickup locations
  • User profiles

Now, let’s go deeper:

✔️ A menu page might include:

  • Dish rating
  • Ingredients list
  • Price
  • Number of users who favorited it
  • “Add to Favorites” button
  • “Buy in One Click” button

…and so on. A full list of potential features.


2. Define the MVP

MVP ≠ Demo Version.
This is the first working version that can be launched in 3–4 months.

📌 MVP for a Food Delivery App:
✅ Menu
✅ Product page (price, description, purchase button)
✅ Payment methods
✅ Information page

(possible 1-5 more other features for a customer choice)

🔥 Outcome:

  • You don’t waste your budget on unnecessary features.
  • Your product is tested by real users in 3–4 months.
  • You collect valuable feedback to refine the next iterations.

Success Stories Built on MVP

📌 Spotify

In 2006, Daniel Ek and Martin Lorentzon launched a simple music streaming service. Today, Spotify is one of the most well-known music streaming platforms.

Spotify — MVP: Free Music Streaming with Ads

Spotify entered the market in 2006 when music streaming was almost nonexistent, and piracy via Napster and torrent services was at its peak. Their MVP was straightforward: free music streaming with ads and an option to purchase a premium ad-free subscription.

What features were included in the MVP?

  • Minimal functionality: Users could listen to music online but not download it.
  • Market validation: Tested whether people would tolerate ads in exchange for free music.
  • Rapid launch: The platform was released in 2008 in a limited European market.

🔥 How did Spotify become a global leader?

  • Secured licensing agreements with major record labels, making it a legal alternative to piracy.
  • Added algorithmic recommendations and personalized playlists.
  • Expanded to global markets and introduced a subscription model, which remains its primary revenue source.

📈 Today, Spotify has over 615 million active users and is valued at $21 billion.

📌 Airbnb

In 2008, two entrepreneurs rented out their apartment via fax. This was their MVP, testing their core hypothesis. Today, Airbnb is the largest vacation rental marketplace.

Airbnb — MVP: Renting Out an Apartment via a Simple Website with Fax Payment

In 2008, two designers from San Francisco, Brian Chesky and Joe Gebbia, struggled to pay rent. During a major conference in the city, all hotels were fully booked. They decided to rent out three air mattresses in their living room and offer breakfast. This led to the creation of Airbed & Breakfast. Their MVP was a basic website where users could book accommodations and pay via fax.

What features were included in the MVP?

  • Minimal functionality: A simple webpage with booking information and a request form.
  • Market validation: Their first paying customer proved real demand.
  • Rapid launch: The site was built in just a few days, with no complex integrations.

🔥 How did Airbnb grow into a global platform?

  • Introduced a rating and review system to build trust between hosts and guests.
  • Invested heavily in UX/UI, making the booking process smoother.
  • Expanded internationally through marketing campaigns and global outreach.

📈 Today, Airbnb is valued at $75 billion and operates in over 220 countries.

📌 Instagram

Initially, it was an app called Burbn, which allowed users to upload photos. Later, the team realized that users cared more about filters and a visual feed, transforming the app into Instagram.

Instagram — MVP: Photos + Filters + Posting

Before Instagram, there was Burbn—an app loaded with features, including check-ins at bars and event planning. Its creators, Kevin Systrom and Mike Krieger, noticed that users engaged most with the photo-uploading function. They removed all unnecessary features and launched Instagram MVP with just:

✅ Photo uploads
✅ Filters
✅ Posting to a feed

Why was this an MVP?

  • Focused on the core product value—photos + filters.
  • Quick development: The app was built in just 8 weeks.
  • Market validation: Tested whether users would actively share photos in this format.

🔥 How did Instagram become the #1 photo-sharing platform?

  • Introduced likes, comments, and hashtags, creating an engaging user experience.
  • In 2012, Facebook acquired Instagram for $1 billion.
  • Continued to evolve with Stories, IGTV, and shopping features.

📈 Today, Instagram is one of the largest social networks, with 2.4 billion users.

Conclusion: MVP & Thoughtful Architecture = The Path to Success

These case studies show that the most successful products started small. Their founders didn’t spend years building complex platforms—they tested their ideas with a minimal feature set, gathered feedback, and scaled smartly.

🚀 If you’re launching an IT startup, I hope these insights reach you at the right timehelping you save time, money, and avoid unnecessary stress..

The most valuable startup in the world is ByteDance (TikTok), valued at $225 billion in 2024 (China).

In second place is SpaceX, with a valuation of $200 billion (USA).

The third most valuable startup is OpenAI, worth $157 billion (USA).

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