The significance of a minimum viable product (MVP) in startups lies in its role as a crucial strategy for validating business ideas. MVP allows startups to develop a simplified version of their product or service with essential features to test in the market. This approach helps in gathering valuable user feedback and minimizing development costs. By focusing on core functionalities, startups can quickly iterate based on user input and validate assumptions, reducing the risk of large-scale failures. The MVP strategy facilitates agility in adapting to market needs and increases the chances of achieving product-market fit.