How much does it cost to build an MVP: factors to consider

Products typically have to pass MVP testing before launch. In extreme cases, product owners put their missions on halt due to failing market feasibility, meaning the market doesn’t need such products, and there’s no point in building them anyway. As a result, the whole purpose of an MVP is to validate its idea by the time investing resources into a full-fledged project.

Developing an MVP, of course, requires sufficient investment. How do you estimate the total cost and diminish irrelevant expenses caused by bad decisions? Follow us in this post to investigate the factors influencing this process’ costs and methods to mitigate the financial burden. You’ll also understand the importance of MVP and why you should plan the budget to begin with.

Why should you choose to develop MVP?

An MVP contains only fundamental features of the future product, built to test the concept and collect user feedback for further improvement. Depending on the scope, it helps clarify inquiries about specific user needs or features on demand that are central to your application. Suppose you wonder if the target market desires a blood sugar tracker, you can develop a health app MVP with this feature.

Besides gaining insights into predefined aspects, a successful MVP approach delivers the following benefits:

All in all, MVP is an essential step to verify whether a product is ready for release. More importantly, you’ll gain evidence of product viability, which could be shown to potential investors, demonstrating the ability to win over users of your idea.   

An MVP is a basic product version consisting of core features without those that are dispensable. Its development allows product owners to test the market and see if it fits the user’s needs.

For instance, Uber’s history traces back to its features-limited MVP software, UberCab. The initial version is a car-hailing service targeted at executives in the San Francisco area. It helps product owners validate the need for a high-end taxi service within the city.

That’s only one of the success stories. Don’t forget to check out our article Why is MVP an Excellent Choice for Your Startup? to learn more about the advantages of an MVP for emerging companies.

Why is it important to plan MVP software development budget?

Although more affordable than an actual product, producing an MVP requires secured capital funding. Hence, it’s crucial to have enough resources and ensure you don’t run out of them by the time of the product launch. The most effective solution is to create a budget for MVP development beforehand.

Reasonable cost planning brings lots of value to the development, some of which are:

The average budget can be anywhere from $10,000 to $100,000, depending on the cost factors we explain in the next section. This usually covers the research, design, development, and maintenance activities. Most of the time, a large amount is attributed to labor expenses, specifically the developers’ hourly rates.

That said, the final amount might fluctuate based on your goals and how you implement the MVP strategy. There’s no exact number to start with, and you’ll need to calculate an estimate by considering different aspects and conditions.

What factors influence the MVP cost

How much does it cost to build an MVP? The answer is it depends. You may get a different quote oftentimes, and it’s completely normal. In reality, many variables contribute to the pricing of MVP development, making it impossible to determine the total cost just by looking at a single faction. Let’s explore the eight key factors we have identified in detail below.

The complexity of the app’s features

Essentially, an idea isn’t enough for budget planning. You’ll need to investigate the functionality that makes up the essence of your application and how intricate it is. On average, a banking app is significantly more costly than a simple mini-game. The same thing goes for your MVP development. In short, you’ll be charged more for a specialized or innovative MVP that requires expertise and research time.

What type of app are you creating? How many core features are to be integrated? How complex are the features? Determining the complexity of your app’s features helps you get closer to the cost estimate. That’s why you’ll need to know which ones are indispensable to the application and how difficult to build them. The more complicated your features, the more money you put into them.

For example, a messaging app would require instant communication, push notifications, contacts, and chat history. The cost to develop each element varies, influencing the final MVP cost. Thus, changing or adjusting a feature may result in an increase or decline in the development budget. Assume you’d like to add file exchange as a core feature to attract a larger user group, be prepared to see a surge in your quote.

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Technology stack

Which technology you select for front-end, back-end, and server configuration impacts the overall cost of MVP development. A widely-used set of programming languages is less pricey than a tailored one. Likewise, an optimized database reduces your spending. That’s why you can cut down a considerable amount by curating the right collection of technologies for your MVP.

Some of the most practical ones we recommend are:

Read our article on the Technology Stack for Web Development to discover your tech stack and start budgeting today. 

The secret is choosing a proper combination by weighing the pros and cons for the best outcomes. Like constructing a house, you’ll need the best-suited materials to keep the app stable and efficient, avoiding extra maintenance costs down the road.

Furthermore, if you consider consulting an expert team on MVP, our software development services provide incredible assistance in made-to-order software solutions. Specifically, we’ll run market validation promptly with an MVP catered to your needs. In the bargain, our customers enjoy a comprehensive cycle, from product design and development to integration and testing.

Integration with external services

Third-party integrations are common practice among applications. Suppose you’re developing a mobile app for your online store. It would require a CRM database, payment gateway, and shipment system. You can’t build these tools by yourself, so external services are necessary to see your app come to life. On that account, including more integrations equals more budget for licenses and maintenance.

You’ll likely include a few third-party tools and APIs for an MVP, yet keep the number as low as possible. Nevertheless, there are cases when third-party services are a requirement, such as developing an enterprise app with highly custom functionality or advanced technologies. In this scenario, the development cost of an MVP would swell hand in hand with every extra service.

Aiming to accompany customers in external service integration, our AI integration services offer top-notch AI solutions that seamlessly align with your application. You’ll receive careful advice on AI and how it enhances your app’s functionality and user experience. We also specialize in payment integration services, ensuring secure payment processes for companies across many sectors. 

Design requirements

Your MVP price also relies on UI/UX design requirements. The success of your application is substantially attributed to how users perceive the design, and as might be expected, a large portion of investment should be poured into UI elements. At the MVP stage, we recommend an intuitive approach supported by proper funding so you can promote brand identity and avoid complications later.

Thorough research into the business, customer behavior, and competitor analysis is crucial to achieving a design that’s not only visually appealing but also engaging to the audience. Based on the results, designers create optimized navigation, accessibility, and usability for the app. This discovery phase adds to the MVP expense, which should be monitored closely for efficiency.

In response to the need for affordable designs, our UI/UX design services offer human-touched solutions, combining stunning looks and excellent performance for the best user experience. We deliver well-crafted visuals that allow you to lead the competition with style. Our partners enjoy highly personalized web and mobile MVP designs backed by solid research and QA support.

Testing and quality assurance

Like a full-featured product, an MVP demands appropriate testing and QA routines to ensure smooth operations. As a product owner, you’ll want it to look and work without defects before introduction to the public. Hence, testing and QA are also determining factors of an MVP development budget. Simply put, the more extensive your tests, the higher your expenses at this stage.

Achieving users’ satisfaction is no easy job. While an MVP contains only the core features, they’re the soul of your future final app. Without having them function perfectly in the first place, you’re risking the opportunity to enhance the product before the official launch. That’s why financing MVP tests and quality control is similar to building a firm substructure for the full-fledged version.

Time to market

Faster time to market leads to more pressure on the development team due to tight deadlines. A hastened timeline may do more harm than good, requiring overtime work and more labor to complete urgent tasks. For that reason, you’ll have to pay extra for boosted MVP creation time, while imperfections might be overlooked, resulting in a defective version.

In the end, the top priority is still product performance, which directly affects user satisfaction and business success. A more relaxed development schedule is highly advised, and you should create a plan with reasonable objectives, budget by stage, and achievement tables to cross-check. Longer time for MVP development enables better budget planning and work quality.

Platform type

Which platform you intend to release the app influences the cost of MVP. Suppose you’re developing a mobile app; it would cost more than a web app does. The reason is that a web app asks for less technical expertise and safety measures. That’s why choosing a specific platform for an MVP drives expenses up or down due to different technical requirements.

Another thing to note for mobile applications is whether you develop a native, cross-platform, or hybrid app. Each has pros and cons, and it depends on the particular project where an option works best. Let’s examine the classifications and see how they affect your budget:

• Native app: Relied on native programming language, it works spectacularly on a specific native platform. You’ll minimize ongoing maintenance efforts due to its seamless integration with the device’s hardware and software. The downside is you can’t reuse the code for other platforms, making it costly if you’d like to launch the app on another operating system later.
• Cross-platform app: A unified codebase shared across platforms is used for this type, allowing you to reduce expenses and boost development time. However, in exchange for these advantages, there comes a higher chance of glitches since it doesn’t integrate well with specific settings.
• Hybrid app: A native app in disguise, a hybrid works on multiple platforms using a single codebase despite having native features. Conversely, since it operates on an embedded browser, you’ll experience moments of inconsistency and slowdown that may hurt your MVP’s reputation.

All things considered, if you’re developing an app for a single mobile platform, go for a native app, as it offers the best bargain between quality and cost. On the other hand, select a cross-platform or hybrid app when targeting a larger audience and the fastest time to market. These are also cost-effective options when it comes to paying your developer wages.

Development team

Picking a development team for your MVP project constitutes the final cost. How come? The team size, expertise level, geographical location, and hourly rates drive the development budget. In reality, this is the biggest cost driver of your MVP, and it’s one of the hardest decisions to make as a product owner when embarking on this journey. The returns on investment are contingent on the entrusted team.

Based on the nature of your MVP, a development team can consist of three or more people. Generally, you’ll need a designer, an engineer, and a project manager. That’s only the minimum headcount for a simple MVP development. Large-scale projects of more complexity would need at least six people or more.

Now comes the professional level of the developers. You should expect higher labor expenses for senior specialists compared to junior specialists. On top of that, it’s necessary to balance expertise and cost, as you don’t want those with irrelevant skills to ruin the project and hire others to fix the aftermath.

Last but not least, the hiring model and the chosen team’s location make up a major part of the development budget. We’ll break down the cost of assembling different teams as follows:

• In-house team: A team of full-time specialists, besides the developer salaries and benefits, requires you to have IT infrastructure, tech training, and recurring IT expenses. These inflate the final cost of MVP development, making it hard for small-budget startups to manage their finances efficiently. The total cost for a team of four accordingly would be $24,400. In addition, you’ll need to account for the overhead costs, which can reach up to $1,500 per month. These are attributed to the office rent, utilities, administration, insurance, and other expenses indirect to the development work.

• Outsourced: An outsourced partner is a great option for employing a highly specialized team to develop an MVP. This method allows you to avoid all the overhead costs of an in-house team and the expenses of infrastructure, licenses, and training to keep the team running.
  For instance, the average cost per hire of an off-shore outsourcer is $30, meaning it would reduce your overall MVP cost to $19,200 a month. Plus, you don’t have to worry about paying the bills since the outsourcer will cover them. This is why outsourcing is the most popular option among small and medium-sized companies.
• Freelancers: While being the most affordable option, employers face the risk of quality control. Instead of hiring an entire team, you’ll contract each member individually, depending on the available tasks.Let’s assume you’d like to add a freelance full-stack developer to the already established team, and the estimated cost would be around $5,000. The total labor expenses add up for every extra freelancer. Though it costs significantly less, the pertinent pitfall of a team of freelancers is the lack of collaboration, which eventually negatively impacts the project deliverables.

Also, consider the regions as developer wages differ from place to place. For instance, if you’re located in North America and decide to hire a development team from Western Europe, there’s a higher chance you can cut off a significant amount due to the difference in hourly rates, given that the expertise level is the same.

Our software development outsourcing services cultivate first-rate experts in MVP development, promising to bring your ingenious idea to life. We emphasize a user-centered approach to concept validation that accelerates market entry. In alignment with that value, a dedicated team will streamline the software development phases from inception to launch.

Post-release factors influencing MVP costs

After launching an MVP, you’ll enter the post-launch phase. At this point, several inevitable costs arise in association with the promotion activities of your product to the public. Here are the three main costs you’re likely to encounter following the release of the application:

• Marketing & advertising: It’s advised to start promoting your MVP early, even before the product comes to light. MVP marketing campaigns, although they bring a lot of attention to your newborn application, incur a monthly amount of around $5,000 to $10,000. The cost covers partner fees for promotions on multiple media channels and in-person events.
• Sales: You should set aside a sum to fund the sales strategy. Don’t underestimate this aspect since most startups struggle to find an income-generating outlet. Instead, be prepared to invest from $5,000 to $10,000 in reaching the target audience and collecting key metrics for improvement, including retention, churn rates, monthly users, and so on.
• Ongoing maintenance: To ensure your MVP operates uninterruptedly, it’s expected to put at least 20% of the early development budget into maintenance activities. An exact estimate would rely on the complexity of your MVP in the first place. The incurred expenses usually involve integrations and APIs, updates, bug fixes, and user feedback incorporation.

We cater our application support and maintenance services to meet the demand for MVP maintenance and continuous improvement post-release. Our attentive specialists keep a close watch on the performance and modify the shortcomings of your app. Your path to a full product launch is smoother than ever with personalized consultation and support.

‍How to reduce the cost of MVP development?

Now that you understand the cost factors of MVP pricing, what are the best ways to minimize the possible expenses for business efficiency? Even a thought-out spending strategy is prone to unexpected pitfalls. Let’s take a closer look at the cost-cutting methods for an MVP without compromising the quality and user experience.

Define the scope of work

You’ll need to have a well-defined scope of work. A broad, vague one induces a challenging pathway to the finished product, resulting in an extended timeline and an overrun budget for development. In contrast, a clear set of requirements helps your team stay focused on a common goal or milestone, preventing the risk of scope creep — a potential failure that freaks out most startups.

One way to manage your scope of work properly throughout the development stages is to set measurable objectives and document your team’s achievements. Moreover, don’t forget to discuss the scope clearly with the team and external stakeholders so everyone is on the same page. After all, the worst case is going around the bush, and no one understands the MVP’s mission.

Prioritize core features

Always be mindful that core features are the primary focal point of an MVP. That’s why it’s crucial to determine the features vital to your application and put additional efforts into refining them, both labor-wise and financial-wise. Incorporating too many functionalities and neglecting the fundamental ones would deliver a deficient product that fails to engage the audience.

Focusing on core features helps you have a clean UI, leveraging the user experience and gathering applicable feedback to enhance your app.

A quick tip is to get to know your target audience, such as demographics, and then investigate their issue and find a resolution. The prioritized MVP functions should be tailored towards solving the user problem, offering unique, advanced value or perspective to support them. Additionally, you can look into what the competitors are doing and select features that can win over the game.

There are many priority models for an MVP. However, it isn’t compulsory to uphold any of the rules. The MVP aims to test the water and observe reactions, so don’t hesitate to include an irregular feature that you think can disrupt the market. A few popular models are the Feature Priority Matrix, Kano Model, Relative Weighting Prioritization, and Feature Buckets.

Align tech stack with needs and budget

Robust tech stack causes the project’s price to skyrocket. Yet, for a simplified version like an MVP, there’s no need to put full force into the technical aspect. You can save some resources for other business activities by optimizing a tech stack that helps meet needs and budget halfway. As a solution, pick out open-source, established tools that are easy to manipulate and affordable for maintenance.

For the front-end, the most useful frameworks to be mentioned are HTML/CSS and JavaScript. On the server-side, select those that are straightforward to scale with quick processing time for boosted performance. In terms of database, you’ll need to examine your storage needs adequately and employ techs with suitable specifications. After all, this is a demanding task where you weigh many variables; however, you can always consult professionals for recommendations.

Select a skilled development team

Whether you choose an in-house team, outsource, or freelancer to develop an MVP, hiring developers of relevant expertise diminishes the development cost. In fact, senior developers might charge a lot higher per hour than their junior counterparts, but they deliver the job faster. Moreover, the quality is guaranteed, lowering the chance you need to have another expert double-check it.

You can avoid the fuss by outsourcing the task to us. We take pride in our dedicated software development team, who commit 100% of their skills toward building scalable, user-friendly solutions. Our specialists are assembled following your particular requirements and will accompany you throughout the project cycle, from ideation to product launch.

Start with a clickable prototype

First of all, what’s a clickable prototype? In a nutshell, you add interactive elements on top of a mockup to attain a prototype. As the word ‘clickable’ suggests, unlike a mockup with only the visuals on display, a clickable prototype is a complete representation of the final product. You can interact with the elements instead of just looking at the layout and colors in case of a mockup.

The biggest advantage of having a clickable prototype is that it allows you to detect design problems effortlessly. The foremost thing to inspect is whether the product adheres to the scope of work. Once this is confirmed, the prototype helps developers communicate with product owners, let’s say, about any misunderstanding on the icons and functions and make appropriate modifications.

To be precise, creating a clickable prototype reduces the cost of MVP development by offering a useful reference for collaboration and informed decisions. Everyone on the team and the product owner can look at it and comment their thoughts, discussing which elements work well and which fail. This way, we clear up confusion before it even exists, eliminating the risk of wasting resources. 

Build your MVP wisely

As we’ve covered a great deal of material in this article, it’s clear that an MVP is a simplified version, including only the most vital functionalities of your digital product. This is a cost-effective tool to test user approval and market demand, a bridge connecting the concept and real-world setting. The benefits of MVP development are clear — risk control, cost-effectiveness, elevated time to market, feedback collection, and product enhancement.

Calculating the development cost involves a deep understanding of the app’s nature and the many factors that drive expenses. From design and technology choices to testing and third-party integrations, each aspect contributes to the overall estimate. Fortunately, MVP building gives you the flexibility to manage your budget while still moving forward with confidence.

By outsourcing MVP to experienced professionals, you can streamline the process and avoid unnecessary headaches. By offering MVP development services, we create exceptional software solutions and promptly validate the market needs, ensuring you stay on track for long-term success without overspending.

If you’re looking to get started, don’t hesitate to contact us. Our team will guide you through each step, from ideation to execution, while keeping you on budget and target.

*Numbers provided in the article were obtained from publicly available sources. We are not responsible for its accuracy or any inaccuracies that may arise.