As the name implies, it is a product with a minimal set of features, a simple product that allows us to understand how the system works and what we need in order to move on. This is a good way to understand the system in parts, instead of trying to immediately digest the whole thing.
Consider an abstract example. A client wants a tool that would allow him to dig a pit, and he is thinking about buying an excavator. An excavator is a major investment, both financially and in terms of maintenance. You have to start working with it and train the operator. So sometimes it makes sense to first offer the customer a shovel – it can also dig dirt, and it may well suit the client's needs at an early stage.