MVP Development Cost: 5 Main Aspects for Aspiring Entrepreneurs

Discovering the exact price for MVP development is a challenging deal. If you turn to different agencies for estimates of MVP development, the price will vary among them. Why is it so? The MVP cost would depend on the complexity of MVP features. Also, developers and software development companies rely on different standards.

How do you know what an optimal MVP development price is? Based on our experience, we will walk you through the crucial aspects that form the cost of building an MVP. So, you will know the price range that allows for creating a simple, yet functional product.

What is a minimum viable product (MVP)?

Before discussing the MVP cost, let’s discover what this term means and why it is beneficial for your business to start with it.

A minimum viable product, or MVP, is the first workable version that holds a core value and can be launched to the market. It solves the initial problems of early customers that use your product. The video below discusses what is an MVP and how your business idea can be validated with it.

Frank Robinson, co-founder and president of SyncDev, introduced the concept of a minimum viable product in 2001. Later, the term became popular thanks to entrepreneurs Steve Blank and Eric Ries, the founder of the Lean Startup methodology.

Before launching a product with many functions, it is advisable to employ minimum viable product development services. You need fewer resources to develop an MVP than a fully-fledged product. Also, you can test how customers use the MVP and collect their feedback to improve your product.

Benefits of starting and testing a business idea with an MVP

• Test your assumptions. MVP is a workable model. So, you can launch it to market and test it with real users. You try how users perceive the functions and flow of your MVP. This way, you see how your product works in actual conditions and whether it will be successful.

• Collect user feedback. With an MVP, you can discover how users apply your product. Their feedback shows what strengths and weaknesses your MVP has. Thanks to early adopters’ reactions, you can change the product. You also learn from the target audience what advanced features your product needs.

• Optimize the usage of resources. The MVP is functional yet simple. The product includes only basic features, so the development takes less time and money. Thus, you spend minimal resources to deliver the product to your audience.

• Earlier launch to market. With less effort and time spent on MVP development, you launch your product in the shortest time. It raises chances for you to win early adopters before your competitors.

• Raising funds. MVP is not just a concept. It is the product that has already gained an audience and proved its viability. So, you can present it to investors and get funds to build an MVP. Having saved on MVP development, you get even more funds by attracting investments.

For example, one of our customers needed to test his business assumptions for a dental imaging management system. So, together we created an MVP with core functionality. After trying the product with early adopters, our client decided to enhance the booking system. It should works smoothly in a desktop version as well as a mobile app.

The improvements resulted in a convenient and user-friendly product. Check below how it works as a mobile app.

Read also: How to Create a Minimum Viable Product: Best Examples and Key Benefits

Prominent examples of MVPs

Buffer

Before building a fully functional product, Joel Gascoigne and Leo Widrich created landing pages. These pages asked users if they wanted a paid version of a product. Also, they clarified which version of a product they would prefer, free or paid. As users mostly answered they would choose a paid version, the product’s potential was proved. So, the founders launched the first version of Buffer. The number of users reached 100,000 within 9 months.

Amazon

Jeff Bezos, the platform founder, started by analyzing the market and testing his assumptions. He narrowed his focus to several categories: CDs, software and hardware, books, and videos. The best turnover was with books, so this became the primary niche for Amazon.

Focusing on a niche is a good start and can serve as the trial scenario for a startup. When you grow the audience in one niche, you can expand your venture later by adding more product categories.

Source: versionmuseum.com

Airbnb

Airbnb started in 2008 when Joe Gebbia and Brian Chesky were short on the budget. They decided to offer their apartment to the participants of the design conference in San Francisco, California. They tested the idea of renting out your apartment or other premises in a bed and breakfast format. Three people responded to their suggestion.

Having tested the idea, they were able to present it to investors. First, the startup raised $20,000 in venture funding from Y Combinator. After the website’s audience grew, the project received $600,000 in seed funding.

Source: quora.com

The difference between proof of concept, prototype, and MVP

MVP is often misused as a similar term for proof of concept and prototype. But these three notions are different. Let’s briefly review what they are and how they are applied.

Proof of concept is a preliminary description and trial of a business idea. It helps check assumptions and analyze the idea’s potential and risks.

A job and investment company AngelList is a perfect example of starting with a proof of concept. The team initially connected vetted companies with angel investors using their contacts. As this approach worked, the founders Naval Ravikant and Babak Nivi automated the introduction process. Steadily, the platform grew into the successful social network it is today.

A prototype is a draft showing a product's main features and flow. It is clickable, so it simulates how the product will work. Check a page from our design team's prototype for an online auto marketplace.

An MVP is a prior version of a product with core functions. It can be launched to the market. The crucial difference between MVP and the other two approaches is workability. Only MVP can be released to the market and tested in actual use.

The table below presents each of the concepts and explains how they differ.

You can discover more about these concepts in our detailed comparisons of MVP versus proof of concept and MVP versus prototype.

What are the aspects that form the MVP cost?

Based on our 7+ years of experience, we can state that developing a high-quality MVP costs between $30,000 and $120,000. In general, MVP pricing depends on several factors. Below we discuss what they are and how they influence the minimum viable product cost.

Scope of the project

The scope means what functionality you would like to have in your MVP. The features you introduce in the product define how long it will take to design it and which resources will be necessary for development.

There are features that you need to include as the core value. Such features make your product workable and bring value to your customers. Distinguishing the primary functions allows you to optimize the MVP app development cost. Thus, the core functions help test the main idea of your product and understand its market demand.

Your MVP should not include fancy features. As an MVP's goal is to show your product's core value, you should prioritize the components to be included. The result of such prioritization depends on the client’s business vision and the development partner’s expertise.

Read also: How to Build an MVP for a SaaS Startup: Practical Tips

Development partner

There are three main types of teams you can choose from for developing your MVP: in-house, remote, and specialized. We outline their peculiarities below to help you choose the right type.

In-house team

The in-house development team is based in your company and you manage it. This means that you hire such a team to deliver your company’s projects. In this case, your relationship is employer-employee rather than client-contractor.

You hire in-house developers, so you know their expertise. Also, you can immediately make changes to your project as needed. Such advantages, though, require extra costs, such as payment of insurance and sick leaves. Also, you need to manage the product development in person and adjust the work of your development team.

For example, the average salary of developers in the United States and Western Europe varies between $43,240 and $89,920 thousand.

Source: statista.com

Freelance developers

Freelance specialists typically charge less than specialized companies. However, this advantage involves choosing carefully as you want to hire a reliable specialist. It is advisable to rely on freelancers who cherish the quality of their work. This should be showcased in their portfolio and reviews from their clients.

In the case of hiring a freelancer, the MVP development cost depends on the freelancer’s hourly rate.

Specialized development company

If your MVP requires high confidentiality, we recommend you turn to a specialized agency. Focusing on the service of MVP development, such companies have deep expertise in the specifics of this process.

Specialized companies use the best development practices to help clients build an MVP. For example, they assist their customers on how to prioritize features and what tech stack to apply for a particular project.

To verify the expertise of a development company, you can check reviews on Clutch or GoodFirms. Also, you can contact their previous customers. Their experience is a source of valuable information when you choose a development partner.

Expenses when you work with different development teams

To help you review the costs of cooperating with various development specialists or teams, we prepared a table below. It shows the expenses needed when choosing between the three types of developers.

When you choose between the above three options, the MVP cost will depend on the hourly rates of the selected developer. Let’s see what affects the hourly rates for developers.

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Technology stack

The chosen technology stack also influences the cost of building an MVP. The development partner with proven expertise chooses the technologies that require fewer resources. In this case, the tech stack helps create a lightweight, stable, and secure solution. The developers also ensure that the solution works across platforms and browsers.

The tech stack is chosen for each particular case of MVP development. So, only the development partner will estimate the total MVP pricing.

Below you can see the core technologies we use at Codica to build an MVP. We apply additional technologies depending on the client’s business needs.

The hourly rates of a development partner

Two main factors influence the hourly rate of a development partner for your project. They are location and expertise.

Location

As living standards differ depending on the country, the developers’ hourly rates will vary. For example, earning $50 per hour in Eastern Europe will be the same as making $250 per hour in the USA. Therefore, the cost of services provided by the developers from different regions will vary.

Specialization and expertise

Another essential factor that influences developers' hourly rates is their expertise. Depending on years of experience, developers fall into three main groups:

• Junior, 0 - 1 year of experience;
• Middle, 1 - 3+ years of experience;
• Senior, 5+ years of experience.

A middle specialist is an optimal choice regarding quality and cost ratio. At the same time, each company may have its own system of estimating the developer’s experience.

Another factor is the developer’s specialization. To develop a custom solution, you will need a specialist with expertise in a particular niche. Such specialization will require extra spending and a higher hourly rate.

Below is the table created by Accelerance. It shows the average hourly rates for development specialists of different levels in specific regions.

Type of contract

There are two most common and time-proven options for signing the project terms with a development partner. They are a fixed price and a time and material contract. Let’s discover their pros and cons.

Fixed price contract: agreed at the start, does not include changes

A fixed price contract settles an agreement between the service provider and their client for a certain amount. It is recommended when the requirements, specifications, and rates are precise and won't change.

The advantages of such an approach are management transparency and clear payment flow as the work gets done. At the same time, such contracts include a 15% - 40% margin to protect a developer against unforeseen risks. This means that client might overpay.

Time and material contract: flexibility and paying for results

This is an entirely different type of contract. It implies paying for work that was actually done based on the developer’s hourly rates. This is a common model as it gives more space for changes in the scope of work than a fixed-price contract.

With a time and material contract, you can adjust requirements, specifications, and features as needed. So, you pay for the actual work done without extras.

Steps of MVP development: their approximate time and cost

The aim of MVP app development is to deliver a high-quality product. This is possible if your development partner follows the best practices when creating your MVP.

At Codica, we keep to the development phases that ensure efficient and optimized work on the MVP. These phases are as follows:

• Product discovery;
• Prototyping and design;
• Development;
• Quality assurance;
• Maintenance and support;
• Scaling.

At Codica, we proceed to the subsequent development stage after agreeing on the previous one with the client. So, if there are any bottlenecks, we tackle them as early as possible.

Let’s see what these stages imply and what are their appropriate time and cost for MVP app development.

Product discovery phase: $1,800 - $3,600

The product discovery process is the preliminary validation of your idea. It is a vital step as it helps discover the potential of your project and assess risks. This preparatory stage allows you to validate that your app will be in demand.

The key reasons why you need a product discovery for custom product development are as follows:

• Eliminate possible risks thanks to getting actual data on your customers and competitors;
• Check that you meet the needs of your target audience;
• Ensure that your product will be in demand;
• Outline the scope of work;
• Define the needed functionality;
• Choose the high-level tech stack for the development of your solution;
• Optimize the use of resources for development;
• Estimate the MVP app development cost.

At this stage, the client outlines the objectives and whole image of the project. The team, on their part, researches the subject and market background of the project.

After this stage is completed, the client receives documents on the project requirements, time, and budget. Also, it outlines the specialists that will participate in the MVP app development process.

Prototyping and design: $2,400 - $4,800

This stage starts after a designer has collected the necessary information on the business needs and goals of the MVP. The designer creates prototypes to show the future architecture and features of the product. This phase is where the product implementation starts. Let’s see what the phases are for MVP prototyping at Codica.

First, a designer creates wireframes. These are preparatory sketches of the MVP structure made by hand. This helps create several drafts for the MVP functionality. For example, the designer sketches several looks of a field or button or the possible placement of menu items.

After the customer and development team agree on wireframes, the designer creates prototypes. They are the clickable presentations of the structure and flow of the MVP. Thus, prototypes show how the solution will work.

Below you can see a prototype of the fitness progressive web application that Codica created. It shows the UX design of a desktop and mobile app for a workout with the options of marking tempo, reps, and weight.

The design and development teams work in close discussions. So, the developers can point to the potential bug or the more efficient feature implementation. These discussions before the development stage help keep the costs for app development low.

The designer presents prototypes to the client to align their view of the positioning of fields, buttons, and menus. If needed, the designer can make changes to the MVP design at this early stage. Prototyping serves as a preliminary development but with spending fewer resources. The product development moves to the next step upon approval from the client.

Further reading: Minimum Viable Product Design: How to Build a Successful MVP

MVP development: $24,000 - $96,000

This phase involves the team that works on your MVP. It is vital that your development partner uses technologies with proven efficiency. With an optimized work process and using resources, the MVP development cost will be kept to a minimum.

An expert team relies on information on business needs from the client and project documents. The product development should be open to the client, including the team’s work chat if needed. So, the team makes relevant adjustments if a client needs them or would like to improve the functionality or flow.

The development involves cooperation between the project manager, designer, software engineers, and the client. The project manager connects all other participants and handles communication between them. Thus, the work process is smooth, and you get the best results.

At Codica, we use an agile approach for custom software product development services and project management. Moving in iterations, our team checks with the client if the development goes as intended by implementation, timeline, and cost. If the changes are necessary, the team includes them in the shortest possible time.

Related reading: How to Build a Marketplace Website MVP and Not Fail

Quality assurance and optimization: $4,800 - $19,200

MVP is about winning users’ interest and attention. So, you need to provide a product of high quality. That is why this phase is essential.

Quality assurance allows you to verify that your MVP works properly and is easy to use. The functionality should be intuitive for users and create the best user experience for them. This phase also includes code review and checking that resources are used optimally.

Post-launch costs

Maintenance and support: $400 - $1,000

After the MVP has been developed, it is necessary to maintain its good work. Also, along with maintenance costs, there are server costs and costs for third-party integrations. These aspects are necessary for data transfer and user interactions with your MVP.

Scaling: by request

As more people use your product, it will be necessary to add more features. Your MVP needs to be scalable to embrace those changes. The cost of adding new features depends on their complexity and the time needed to develop them. Surely, your technical partner will tell you the exact cost depending on the features you would like to include in your MVP.

Marketing and advertising

Early and thoughtful MVP promotion will help you win users’ attention. It is possible to start even when you are at the development stage. Two main types of marketing can be applied to an MVP: outbound and inbound.

Outbound marketing reaches prospects with advertising and through social media. If you opt for outbound marketing, you can turn to popular platforms like Google, Facebook, Instagram, LinkedIn, Twitter, and Pinterest.

In contrast, inbound marketing involves creating and sharing unique content about your product through blogs. Also, you can develop accounts on social media. As the survey shows, inbound marketing requires fewer costs than outbound marketing. The prices for inbound marketing range from $4,000 to 15,000 per month. For such an amount, marketing agencies can help you with the vital aspects of inbound marketing.

Read also: Custom Software Development for Startups: 6 Tips to Save Costs

How much does it cost to build an MVP?

As we have discovered what are the steps of MVP development, let’s take a short review in the table below. It shows the time and money needed at each step of MVP app development.

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The MVP cost for different types of solutions: Codica’s expertise

The costs and time of developing an MVP depend on the type of product you want to deliver. On average, the MVP development process takes around 2 - 6 months. Indeed, you can extend this period depending on the number of features you want to cover in your product.

At Codica, we recommend our clients start or test their business ideas with an MVP. Thanks to the advantages of such an approach, our clients raised more than $56 million on their startups. Below we present several types of MVPs that we created and their approximate development time and cost.

The MVP pricing above is approximate. You can get the exact cost of MVP app development services from your software development partner.

It is essential that you include the features that will make your product attractive to early customers. The MVP that you build aims to win users’ trust and interest. So, it is advisable to reach the optimal price that correlates with your MVP’s core functionality.

To conclude

The cost of building an MVP varies between around $30,000 and $120,000. The price depends on several factors in each particular case. Such factors include the scope of work, the type of team, and the contract. Also, hourly rates play a crucial role. They depend on the location and expertise of your development team and involved specialists.

Codica has significant experience in building MVPs. We recommend our clients start from them to validate their ideas. Check our completed projects to discover more about our work on MVPs. If you have an idea that needs to be tested with an MVP, we are eager to help you. Contact us to discuss the details and get a free quote for your project.