Smart Debt Management - The Key to Fast MVP Iteration

MVPs validate ideas fast, but unmanaged debt — technical, strategic, or feature — can stall iteration. Success lies in balancing speed with conscious debt management.

I’ve watched a product grow from a rough prototype into a system that runs 24/7 in factories around the world. First as an engineer, then as a product owner, and now by leading the R&D strategy, I’ve learned a hard truth: iteration speed is constrained less by ideas and more by the debts you take on.

In this post, I’ll unpack what “MVP and iterate” means to me, explore the hidden debts that creep into every product — technical, design, feature, and more — and argue why smart debt management is an underrated driver of product success.

MVP and Iterate

The term minimum viable product (MVP) has many context-dependent interpretations. Some treat it as a prototype, others as a half-baked product launch, but its real purpose is clear: an MVP is the smallest version of a product that can validate a key market hypothesis. It must be viable — meaning it solves a real problem well enough that a customer will use or buy it, and minimal — meaning everything not essential to that validation is cut.

This approach is inseparable from “iteration”. MVP + iterate means launching that minimal version as soon as possible, learning from real-world feedback, and improving in tight loops until you have a commercially successful product.

It’s the opposite of building in stealth mode. A stealth product bets on getting everything right behind closed doors, while an MVP assumes you’ll be wrong about something and optimizes for learning fast.

Validated learning

“If I had asked people what they wanted, they would have said faster horses.” – a quote often (though likely wrongly) attributed to Henry Ford.

This quote, whether true or not, highlights a key challenge: customers may not articulate the solution you should build, but they will reveal the problems worth solving. Validated learning is about aligning your vision with those underlying needs — not blindly asking what features to ship.

The lean startup methodology builds on this principle, advocating fast product iterations and learning cycles to reduce uncertainty. From my experience, I can only agree: even the most brilliant engineers and generous funding won’t help if you’re building the wrong product. Customer signals often surface blind spots that no internal planning can predict.See New Coke as a cautionary tale of how product-market misfit can arise even when trying to mimic a competitor's strategy.

Of course, early customer interaction is not painless. It helps avoid the build trap, but it forces you to balance customer satisfaction with your product vision. On one hand, customer insights can prevent scope creep; on the other, they can tempt you into feature creep if you react to every single request without prioritization.

Nevertheless, I believe the benefits of early customer interaction and validated learning outweigh the drawbacks. MVP + Iterate is not a perfect tool, but it’s effective in keeping your vision grounded in reality; assuming you manage your debts in a way that allows you to stay lean 😉

Types of Debt in Product Development

There are many forms of debt in product development, each reflecting a trade-off between speed and sustainability. The most famous is technical debt, but it’s far from the only one. Here are the ones I consider essential to understand:Another key type of debt is management debt. While critical, it operates at an organizational rather than a product level. See Ben Horowitz's essay (or his book) for an intro.

• Feature debt: The burden of maintaining unnecessary or poorly validated features that add little value. It typically arises from prematurely building functionality or saying “yes” to too many customer requests without testing their real impact.
• Design debt: Inconsistencies or shortcuts in UX and UI that accumulate when design is treated as secondary to functionality. Over time, these small flaws compound into confusing user experiences that slow adoption.
• Knowledge debt: When teams fail to document or share critical knowledge, making onboarding and scaling harder.
• Marketing debt: The cost of neglecting marketing early, leading to low brand visibility and awareness. As a result, your product is absent from buyers’ minds when they make purchase decisions.
• Process debt: Inefficient or ad-hoc workflows that work for a small team but fail as complexity grows (e.g., lack of testing pipelines, unclear release processes, or missing coding standards). This debt slows down iteration as teams scale.
• Strategic debt: The cost of pursuing short-term wins (or reacting to market noise) at the expense of a clear long-term vision. This often leads to scope creep or products that try to be everything to everyone.
• Technical debt (or tech debt): Compromises in code quality, architecture, or infrastructure, often taken to accelerate delivery. Unchecked technical debt makes adding new features or scaling the application increasingly painful, often compromising performance or other non-functional requirements.

The Importance of Managing Debt

Debt is a powerful enabler. Most people wouldn’t be able to buy a house without taking on a mortgage. But no one signs a bank loan without assessing the risks and having a clear goal. Product development debts — technical, design, feature, etc. — should be treated the same way. They can accelerate progress, but only if you are conscious of why you’re taking them on and have a plan to pay them down.

The MVP + Iterate model is often illustrated with the famous skateboard-to-car analogy:

By Teemu - Own work, CC BY-SA 4.0, via Wikimedia Commons.

I think this analogy falls short in practice. A skateboard and a car share almost nothing - different materials, different manufacturing processes, different engineering skills. Each step is essentially a separate product, which means you’re not iterating — you’re starting over. Worse, trying to evolve a skateboard into a car will force you into taking shortcuts, leading to a fragile end product that collapses under complexity.

In product development, taking on debt is often necessary to move fast. But if you end up with a “car” built on the shaky foundation of a “skateboard”, you’ve accumulated the kind of debt that kills products. Smart iteration means building on foundations designed to evolve — not ones that must be replaced every time you level up.

Being smart about debt management means using debt as a deliberate enabler while continuously assessing risks and ensuring strategic alignment with the product vision.

Having the Right Debt Mindset

“A well-designed MVP is not just about immediate goals; it is about where a business wants to be in two to three years.”

I don’t argue against taking on debt. Debt is not necessarily an asset or a liability — it’s a tool. What matters is whether you are aware of it, track its downstream consequences, and have a plan to pay it down. Unconscious debt traps you; conscious debt accelerates you.

If you treat debt as a strategic lever — one that buys learning and speed without mortgaging the future — you can iterate faster, stay lean, and build products that endure.

The success of an MVP isn’t about how fast you ship — it’s about how well you evolve. And that evolution is defined by the debts you consciously choose to carry.

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Acknowledgements: I’ve learned most of these lessons by building products hands-on, not from formal training. I’m deeply grateful to my colleagues and friends at EthonAI who joined me on this journey. I’m especially thankful to Rahul Rade, with whom I’ve worked closely since the early days of the company, and who later succeeded me as product owner. We shaped many of these insights together.