The main thing about creating an MVP is that just having a groundbreaking idea is not enough. The key to success is a stand-out performance. The cost of an MVP app development can be even lower than you expected.
I want to share with you what is important and what is not when it comes to building a new product. It helps to outline the estimated MVP price.
Digital product development process
The lean startup MVP requires several steps any founder usually takes. It’s a well-known complex, that helps to transform an idea into a profitable and scalable product.
The main reason to follow the pattern in the product development process is to systematically test business hypotheses. This will help to efficiently build processes within your startup and prevent money wasting.
Very often founders do not include non-development costs in the project budget. And this mistake can have a high cost. To avoid miscalculating, let’s look at 5 stages of new product development process:
- Validate your idea. If you want to build a profitable product, make sure to find a match between your vision and real customer pains. The best way to do so is to use idea validation framework. Verify your suggestion against a real-world problem before you decide to spend cash.
- Build user journey map. Use prototyping a lot to get validated learning. Pen & paper or special soft like Balsamiq or UXPin would help you. Make low fidelity or clickable prototypes to find the best User Experience solutions.
- Collect and prioritize the MVP requirements. Implementing your vision in a well-made product is possible only after creating the quality requirement documentation. Business and technical requirements let you build progress-oriented roadmap to deliver value as much as possible.
- Start an MVP development. This process includes development of design, coding & code reviewing, project management, testing. The goal of any MVP is to find the product/market fit. It helps to receive validated learning and move faster than other players. Even under these conditions, the cost of an MVP may still vary.
- Launch the product. Always include business costs in your MVP budget. 42% of projects fail due to no market need. These post mortem list could be much smaller. Founders have to upgrade skill of sales pitch and on-market activities. Learn how to sell the problem you gonna solve first, than sell your solution.
Minimum Viable Product Development Tips
The actual recommendations on the frameworks and tools for product creation shed light on the basics of building an MVP.
Development Budget Planning
Budget planning is always tricky for multiple reasons. The first reason is the technical requirements. They are hard to estimate for a non-technical founder. The second reason is that there is a need to ensure all pain points are solved through the user journey within the applications.
Include business costs
It’s not only the development stage that costs money when creating an MVP. Founder also need to factor in sales and marketing channels, including testing out any possible solutions.
I like to follow the Occam’s razor principle here. It means that you cut off everything that is superfluous and focus only on the necessities.
Build value for customers
It is important to avoid cost savings at the expense of quality. Often entrepreneurs think that the more features their product has, the better the product is. It works only in case you create a multifunctional product that aims to cover all the customer needs.
But for an MVP it is important to focus on high quality, even if that means a more limited experience.
Stop burning money
The cost of an MVP app development depends on the type you choose to create.
Sometimes deep and comprehensive research is enough to raise enough funding for the project. Other times you would need the paper-made wireframes or even clickable prototypes.
There are 3 main points to remember:
- A Minimum Viable Product should be the basic concept of your product.
- It should not include superfluous features.
- It should have a clear and attractive design.
How much does building an app cost
There are several key factors that determine the cost of building an app.
Many founders assume that the cost of development depends on the types of technology used, but this is not true.
Your product development budget is just one side of the coin. It is equally important that the project is delivered on time and the idea behind the project is strong.
If the product owner wants to create an awesome product, it is important to choose developers wisely. Let’s take a look at some options you have.
Freelance software development
It is a quick, cheap and easy way to start a project.
The main problem in hiring freelance developers is their lack of obligations towards the project.
When something goes wrong, they can easily just leave. It also means you have to become a project manager, and all coordination and communication are your own responsibility.
This issue is pretty hard to manage. If you still wish to hire freelance developers, my advice is to involve those of them who are local.
For a typical project you would need to hire a full-time team. Let’s consider the rates of freelance software developers.
A full-stack developer costs about $6 000 per month. This specialist is required across the entire project development.
A designer costs around $5 000 per month. This specialist is needed at the beginning of the project.
A tester is needed throughout entire development process. This specialist will cost you around $2 500 per month.
Thus, the overall cost will be up to $13, 000 per month. Below is a chart outlining the current salaries of freelancers across the world.
Sometimes founders choose in-house software development. It provides transparent relations and clear communication.
In-house development lets the team be fully involved in the project. The quality is still your responsibility. Your developers are more motivated on the success of the company though.
An internal team is also much easier to coordinate.
The main disadvantage of this option is the significantly higher costs. It could be a problem, if you start with a limited budget.
When you are employing the full-time developers you are required to pay holiday costs and hiring costs as well as many other expenses. Make sure your project requires this level of spending at the MVP stage.
How much would it cost? Let’s take the same team.
A full-stack developer costs an average of $9, 200 per month.
A designer costs $3, 600 per month.
A tester costs $4, 100 per month and a project manager costs $7, 500 per month.
So, an in-house development will cost you about $25, 000 per month. Below is a chart outlining the current salaries of developers across the world.
Local web development companies
Local web development is also an expensive option. But the price includes developed business and technology processes.
You would get a dedicated development team, a project manager and a tester with the level of involvement being legally documented.
The agency rates vary from $100 to $250 per hour for one specialist. That means that the same team will cost you at least $400 per hour.
However, you need to ask yourself whether you are ready to pay up to $64, 000 per month to test your business hypotheses. If the answer is yes, this is a good option.
Outsource app development
Outsourcing is quite a popular option for many startups. You can hire a local agency for a cheaper price.
There are two main challenges when outsourcing your app development. They are — building the trust and involving the team.
However, both of these issues are easy managed. Make sure you have thoroughly researched the potential agencies before hiring them. You can do this by checking reviews, company websites and looking at recent case studies.
What is an outsource app development cost to build MVP?
Let’s take Ukrainian outsourcers as an example. Their average price is $30 per hour.
Thus, a four-person team will cost $120 per hour. That means you will have to pay up to $19, 000 per month to build an MVP.
Summary MVP cost
The price of MVP development depends on the type of developers you hire.
Hence, if you hire freelancer developers, it will cost you about $13 000.
MVP development by an in-house development team comes with a price of approximately $25 000.
The local web development company charges up to $65 000 for an MVP.
Meanwhile, an outsourcing development of an MVP will cost up to $35 000.
Development price details
In general, an MVP budget includes costs of design, coding, project management and testing. Some projects also need maintenance to be involved. Let’s take a look at the potential costs:
- To make a prototype UX/UI, validate an idea, pitch an app to investors will cost $5, 000 – $10, 000.
- An average price to create an app is from $15, 000 to $50, 000, depending on the complexity of the project,
- The price for landing page development and project promotion is about $2, 000.
The best way to understand the product development prices is to consider the real-life examples. Those, who are interested in entering ride-sharing market, can take a look at Uber like app development cost checklist.
MVP examples of famous startups
Twttr has started as a free alternative to SMS services. This company invented hashtag and 140-symbol standard of messaging.
There are a few key points that impact on MVP success:
- Focus on a small, particular group of customers to test viability of business hypotheses,
- Focus on the core features. In case of Twitter, it has a lot of current features that weren’t included in the first version of the app.
Nowadays an app development cost similar to Twitter would cost $50, 000. Yet, the copycat of this product comes with the price of $250, 000. Its development takes from 3 to 6 months.
The decision to enter the market with a Minimum Viable Product made Twitter the second most popular social network in the world. It has around 300 million of active users.
Originally, Instagram was a Burbn. It was an app that allowed users to check-in somewhere, share plans or photos. Just like in Facebook. It was developed in 2010.
The first concept included a combination of checking in, gaming and ability to share photos. However, it soon became clear that users use only photo sharing feature.
The market reacts quickly. The Instagram growth rate was a million users per month. According to Instagram founder the app was build in 2 months. In 2012 Instagram was sold for a $1 billion to Facebook.
At the moment Instagram has over 600 million active users, and the number is rising.
The development cost of app like Instagram would cost you about $100, 000. Taking into account the complexity of Instagram-clone, its development may cost up to $300, 000. It will take from 3 to 6 months to build such product.
Amazon started in 1994 as an online marketplace to sell books. And where is it now? Today it is the most valuable company in the world.
The story behind is about Bezos’s market analysis. He literally created the list of 12 items, that make a good fit for e-store. After, he prioritized these goods and chose the 5 most promising. They were CDs, computers soft & hardware, books and video content. You know what he chose after the next round of prioritization.
Again, the success of this company is attributed to focusing on the particular niche. Founders can validate the approach of Amazon and scale business to the modern Leviathan among technical giants.
Timeline for app development
Development time of MVP is proportional to budget. And budget straightly proportion to features-to-develop. But you need to remember that time is not on your side.
There are a lot of factors, that define the complexity of an application:
- the platform – web, mobile or hybrid app,
- the number of app roles,
- the number and complexity of features,
- iOS-based or Android-based development and so on.
Thus, the detail of project’s requirements and milestones help validate ideas rapidly. Because faster you can adapt to changes, the more likely you are to succeed and beat your competitors.
Usually MVP development takes 1-2 months. It includes the full cycle of development from business analysis to product maintenance.
The full product development takes from 6 to 12 months.
Aim to keep the time between updates as short as possible. Developers usually have 1-2 week iterations. That’s enough time to update and test out the new features to launch an MVP in a good way.