What it means
An MVP is not a rough prototype or a demo. It is a real product, deliberately small, that solves one core problem well enough for early customers to use it. Everything that is not needed to test the main idea waits for later.
The goal is learning: which features people use, what they will pay for and what they ask for next.
Why it matters for a business
Building the full product before talking to customers is the most expensive way to find out you were wrong. An MVP gets real feedback sooner and for less money, and gives investors and early customers something concrete.
A business example
Things to watch
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Keep scope small, but quality high enough to trust.
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Build foundations, such as data model and security, properly.
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Decide in advance what you want to learn.
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Plan how you will collect feedback.