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How Much Does It Cost to Build an MVP? [4 Options to Choose]

18 min read

Bringing your vision to life is the best thing that can happen to you. And when it comes to financial benefits, that is like a cherry on the cake.

There are many of us who are unable to bring our ideas to life just because of some bad mistakes we made in the beginning. Statistics suggest that 42% of the apps fail because the app was not required by the market.

This is the issue that needs attention.

To prevent scenarios like these, it is best to go for building MVP for startups at first. Most of you must be thinking, what is an MVP?

MVP is expanded as a minimum viable product and is used for finding the scope of a product in the market.

For instance, if you are making an app for your startup, it is best to build an MVP app to test the feasibility and scope of it. There are countless other reasons and benefits of building a minimum viable product that will be highlighted in this post.

Most importantly, we will take a comprehensive look at the MVP development cost in the coming sections.

So, without any further ado, let’s begin!

What Are the Various Reasons to Build an MVP?

Before we learn about an MVP development price, let us know why an MVP is necessary?

Here are some of the factors that point towards the need of building a minimum viable product as you make your own startup.

Reason Description
Pandemic Companies around the world are witnessing massive growth during the pandemic. For instance, Amazon’s market capitalization has gained around $570 billion so far.

The concept of contactless delivery has also benefited various food delivery businesses.

This is a clear sign that if you have an application idea, it is best to test it out now. Why?

As some of the countries are still employing lockdown restrictions, people have more time to spare.

It will be best to go for a time killer application like a game!

Market Growth It is pretty straightforward to understand that if there is no market, the app will not be successful. As far as the market of the global mobile application is concerned, it is expected to rise at a CAGR of 11.5% from 2020-27.

Moreover, applications like eCommerce, Education, Gaming, Medical, and AI have high growth in the future.

Hence, it will be best if you opt to find an idea and build an MVP for these app types.

Some great startup examples are SurveyAuto, Snackpass, CoachHub, NuvoAir, and many more!

Profitable in long term This is the most crucial factor that supports building MVP for startups. Here are some aspects that make an MVP profitable:

  • No-budget burn. The CBInsights report suggests that 29% of the startups fail because they ran out of cash. This is a benefit that an MVP offers.You can get an idea about the scope of the application and save money, which you might not have if you released a full-fledged app.
  • User-centric development. Build an MVP app and get to know about user expectations and reviews. It will help you build a user-centric application.
  • Product-market fit. The best thing about an MVP is that you get to know about the market whereas 34% of the startups fail because of this.

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What Is the Cost to Build MVP App?

Several key factors determine the cost of building an MVP.

Many founders assume that the cost of app 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 excellent product, it is vital to choose developers wisely.

Let’s take a look at some options you have.

Option 1: Hire Freelancers [Cheap and Cheerful]

It is a quick, cheap, and easy way to start a project.

There are many freelance platforms to help you find developers that can fit your needs. Good platforms to start are freelancer.com, upwork.com, fiverr.com.

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 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.
  • You will need a tester throughout the 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.

The average freelance developers salary by country to build mvp app

Option 2: Build an in-House Team [Expensive and Transparent]

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 by success of the application and company, though.

An internal team is also much easier to coordinate.

The main disadvantage of this option is significantly higher cost. It could be a problem if you start with a limited budget.

When you are employing 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, in-house development will cost you about $25, 000 per month. Below is a chart outlining the current salaries of developers across the world.

The average in-house developers cost by country that will define mvp price

Option 3: Hire a Local Team [If You Have Unlimited Budget]

Local product 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 and legally documented procedures.

Clutch.co or GoodFirms.com are good options to find a well-known local agency. These sites show ratings and feedback from previous customers to help you choose a proficient and reliable team.

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.

Option 4: Outsource MVP Development [Reasonable Cost, Reliable Results]

Outsourcing is quite a popular option for many startups. It’s like hiring a local agency, but at a twice-trice lower price.

There are two main challenges when outsourcing your product development:

  • building trust,
  • and involving the team.

However, both of both issues are easily 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 the cost to build an MVP with an outsourcing agency?

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.

The global IT Outsourcing rates to consider mvp development cost

The Summary of MVP Development Cost

When it comes down to actual numbers, the price of building MVP for startups vary based on multiple factors like:

Frankly, if you choose the type of team and location carefully, you can considerably control the MVP price.

Here are some scenarios of it.

  1. If you hire freelancers, it will cost you about $13 000.
  2. MVP development by an in-house team comes with a price of approximately $25 000.
  3. The local agency charges up to $65 000 for an MVP.
  4. Meanwhile, an outsource development of an MVP will cost up to $35 000.

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, create a pitch of an app for investors will cost up to $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 product development prices is to consider real-life examples.

Those who are interested in entering the ride-sharing market can take a look at the Uber MVP development cost checklist.

Now, let’s take a closer look at factors.

What Factors Play a Role in Determining the MVP Price?

Let’s move on to the question, how much does it cost to build an MVP?

Basically, an MVP needs to have all the necessary features that you need to test. And, the MVP development cost is highly dependent on the initial phase of the project.

The phase where the feasibility and overall cost of the project are estimated is known as the discovery phase.

Business Part

This part is the backbone of the entire app development process. It will help you decide how and where the money will be spent. Though it is not that necessary for an experienced business owner, if you are a starter, you need not miss this part.

Listed below are some of the key aspects that affect the overall cost of MVP development.

Factor Description
Idea Validation The concept of idea validation includes techniques to find out if your application is needed by the market and if people are willing to pay for it. Building an MVP for your startup is the best way to validate your idea.

Moreover, by undertaking the idea validation process, you can reduce the cost of the application development process. If, in any case, your application idea does not show potential, you will be saved from losing a lot of money.

One of the best examples of idea validation is MailChimp and Airbnb. These two companies that are highly popular these days started with idea validation.

Discovery Phase One of the key phrases that help you estimate the price of an app or an MVP is the discovery phase. During the discovery phase, you get insights about:

  • Competitors
  • Market
  • Target audience
  • Business goals
  • Cost of the app

All these aspects when discovered beforehand can help you plan well in case of investment.

Thus, making it easy to manage your entire project budget.

Technical Part

The technical part of the app also plays a key role in estimating the cost of building a minimum viable product. Basically, the technical part includes app development and designing. It explores the features that will be in the app and their complexity.

Based on the complexity, the apps can be divided into three categories:

Complexity Description
Simple MVPs The most basic app is the one that has limited features such as 3-4 screens, simple functions, login screen, messages, etc. As these apps are less complex, they take less development time and thus less money.

The app may cost you around $10,000, and the time period required for such an app will be around 4-5 months.

Some common easy to make apps are a calculator, an alarm clock, or a simple quiz game app.

Average Complexity Products After simple apps come the medium complexity apps. These products take a bit more time than the simple development (around 6-9 months) to make. Moreover, the cost of these apps is also more, typically in the range of $10-50k.

Unlike simpler apps, these apps contain extra features like data storage, payment portals, in-app purchases, geolocation, location tracking, etc.

These apps are photo-sharing apps, apps related to any company.

Highly Complex Apps The last category is the app with master-level complexity. Most of these apps are taxi service apps, food delivery apps, OTT platforms, enterprise-level apps, etc.

The complexity in these apps is super high that include time-consuming features like:

  • Video calls
  • Messaging
  • Data sync
  • Streaming
  • Location tracking
  • In-app purchases

And many more! The databases of these apps are also large. These apps might cost you over $100,000 and may take over a year to develop.

Design Part

One more key aspect that affects the cost of building a minimum viable product is the design of the web or mobile app.

As the app can have various types of user interfaces, the price of the app design can rise based on the OS and what you include in the app. UX is also a critical factor in deciding the cost of an MVP.

An app can be classified into two types, namely,

  • Hybrid apps: These apps have almost the same design across all platforms (android and iOS) as there is one code for all. The key aspect of hybrid apps is that they have all the native app features, and on top of all, they are cost-effective. One drawback of these apps is that they could be a bit slow in functioning. Hence, if you choose to build a native app, you can reduce the MVP development cost.
  • Native apps: Unlike hybrid apps, native apps are faster in performance and are easy to maintain over time. The design of a native app is not similar across platforms. They are much more interactive and engaging as compared to the hybrid apps. The key thing about the native apps is that each app has its unique code for different platforms. This increases the MVP price for you. Thus, if you have a good budget, you can go for native apps, it will decrease the MVP development cost.

Here you can find out more about the app design process.

The overall cost of an MVP design will be between $1500 to $7500 based on the factors like the location of the design, a type of the team, the complexity of the design, and the time period.

Summary of MVP Development Process

The lean startup MVP requires several steps any founder usually takes. It’s a well-known approach 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 test business hypotheses systematically. It will help to build processes within your startup efficiently and prevent money-wasting.

Very often, founders do not include non-development costs in the project budget. And this mistake can cost them dearly in the future. To avoid miscalculating, let’s look at 5 stages of new product development process:

  1. 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 the idea validation framework. Verify your suggestion against a real-world problem before you decide to spend money.
  2. Build a user journey map. Use prototyping a lot to get validated learning. Pen & paper or special software like Balsamiq or UXPin would help you. Make low fidelity or clickable prototypes to find the best User Experience solutions.
  3. 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 a progress-oriented roadmap to deliver value as much as possible.
  4. Start an MVP development. This process includes the development of design, coding, and 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.
  5. Launch the product. Always include business costs in your MVP budget. 42% of projects fail due to the lack of market demand. This post mortem list could be much smaller. Founders have to upgrade the skill of sales pitch and on-market activities. Learn how to sell the problem you are going to solve first, then 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 app user journey.

Include Business Costs It’s not only the development stage that costs money when creating an MVP. The founder also needs to factor in sales and marketing channels, including testing out any possible solutions.

I like to follow Occam’s razor principle here. It means that you cut off everything superfluous and focus only on the necessities.

Build Value for Customers It is essential 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 crucial 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 in-depth and comprehensive research is enough to raise enough funding for the project. Other times you would need 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 unnecessary features
  • It should have a clean and attractive design

MVP Post-launch Costs

Now, your MVP startup is finally launched. But it doesn’t mean you can sigh with relief. To achieve the best results, you need to be ready to invest in post-launch activities.

The major items of expenditure here are marketing, sales, and maintenance of your MVP. Let’s consider each step of the post launch strategy you need to take and their cost.

Factor 1. MVP Marketing and Advertising

Marketing strategy for a startup or new product launches should be thought out beforehand. It is better to start promoting your app as early as possible, even if the product is at the development stage.

The average cost of the marketing campaign of an MVP is at least $5000 per month. What does MVP marketing management include?

An MVP marketing plan depends on the purposes of the product and budget.

The most cost-effective way to market your MVP is through inbound marketing, which is

  • social media posts,
  • blog posts,
  • email newsletters,
  • and networking.

Another form of advertising is outbound marketing, which is

  • Facebook ads,
  • Google Adwords, and Display Advertising,
  • Cold outreach to promote content.

If your marketing budget allows, you can use these powerful tools to deliver your MVP to a broader audience.

The marketing campaign is also followed by analysing, collecting feedback, and testing by users. You need to understand and analyze the performance of your MVP in the market. There are several metrics you need to check regularly.

They are:

  • the number of installs,
  • daily/monthly active users,
  • churn rate,
  • the average duration of a user session,
  • product-specific engagement metrics,
  • sales and revenue,
  • customer satisfaction rate.

It would be best if you found out what MVP features attract users and help to solve their problem. Thus, it would help if you collected users’ feedback on your application. It is vital to listen to their opinion.

The best option here is to use such platforms as ProductHunt, Betalist, or Drift.

Factor 2. MVP Sales

Sales funnels play a significant role in gaining the target audience and maximizing the profit of your product.

On average, founders need to invest $5000 – $10 000 to test the assumptions and find the right sales funnel.

Factor 3. Maintenance

An MVP app maintenance cost is usually 20% of the initial MVP development budget.  The overall cost of product maintenance entirely depends on the MVP complexity, team location, and experience.

Costs of maintaining an app should include server expenses ($15 – $20 per month), price of integrations and APIs, constant support, and the salary of developers, who will update the product and make various iterations.

MVP Examples of Famous Startups

MVP Examples cost of Uber MVP, WhatsApp MVP, Facebook MVP, Twitter MVP

Example of an MVP: Twitter

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 the viability of business hypotheses,
  • Focus on the core features. In the 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 active users.

Example of an MVP: Instagram

Initially, Instagram was Burbn. It was an app that allowed users to check-in somewhere, share plans, or photos. Just like in Facebook.

The app was developed in 2010. The first concept included a combination of checking in, gaming, and the ability to share photos. However, it soon became apparent that users use only photo sharing feature.

The market reacts quickly. The Instagram growth rate was a million users per month. According to the Instagram founder, the app was built in 2 months. In 2012 Instagram was sold for $1 billion to Facebook.

At the moment, Instagram has over 600 million active users, and the number is rising.

The development cost of an 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 a product.

Example of an MVP: Amazon

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 this company is about Bezos’s market analysis. He created the list of 12 items that make a good fit for the e-store. After that he prioritized these items and chose the 5 most promising. They were CDs, computers’ soft & hardware, books, and video content. And you know what he has chosen after the next round of prioritization.

Again, the success of this company is about focusing on a particular niche. Founders can validate the approach of Amazon and scale business to the modern Leviathan among technical giants.

Example of an MVP: Dropbox

The founders of Dropbox, Arash Ferdowsi, and Drew Houston, were two of the smartest people on earth. When the idea of online file syncing hit their mind, they did not rush into making an app. They made a video about it to show people how it will work.

This simple step turned out to be the best for them as the video garnered 70k signups from the audience who knows more about it. Thus, the firm created a master software with a pinch of investment.

Example of an MVP: Uber

Anyone today who has a cab service idea would rush towards full-fledged app development. But, Garrett Camp and Travis Kalanick were not like these people. The legendary founders of Uber tested their idea by making cab service available only on iPhone in the San Francisco area.

They also added the SMS feature for booking, which helped them leverage knowledge about the feasibility of their idea. This was the MVP that laid the foundation of a world-level cab service today.

Timeline for MVP Development

The development time of MVP is proportional to the budget. And budget straightly proportions to the number of 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 the project’s requirements and milestones help validate ideas rapidly. Because the 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.

Look for a Trustful Partner to Develop MVP?

SpdLoad team focuses on MVP development for early-stage startups. Our goal is to build successful products, that perform well in the real market. It allows founders to raise funds to continue to rapidly grow all over the target market.

The key is our approach. We look further, then a project-based development. We aim to build a scaled product with a strong market presence.  To do so, we conduct deep business research, that includes an overview of the market, competitors’ landscape, and customer research.

There are a few examples of what we did (and will be happy to do for you too):

  • MyWishApp – a mobile app, that redefines the gifting experience. Built using a very complex scrapping solution.
  • Connexzion – a web solution to boost up the sales of eCommerce and marketplaces with a personal touch.
  • DocKids – a web and mobile app for telemedicine.

Therefore, if you are interested in building valuable products, that means a lot to your potential, present, and current customers, let us know. We will provide you with a free estimation and consultation on MVP development.

Rapid and Reliable MVP Development

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