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02/04/2021

MVP Price – How Much Does It Cost to Build an MVP and Why?

Table of content:

    A minimum viable product (MVP) is the best way to test whether or not your groundbreaking idea is going to be a hit. It's relatively cheap to build (compared to the actual product) and is an effective way of collecting feedback that will influence your product’s final direction. 

    An MVP is a working, customer-facing version of your product in its earliest stages. The MVP should only contain the core features necessary to fulfill its primary purpose and nothing else. This helps reduce the price and accelerates the product development timeline. 

    But how much does it actually cost to build an MVP? 

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    Based on our seven years’ experience and estimating dozens of projects, we’ve found that the cost of a minimum viable product can range from $40,000 to $120,000. This is spread across a timeline of several weeks to several months. 

    Let’s review the factors that influence MVP development costs.  

     

    What influences the MVP price?

    The MVP cost can change dramatically from project to project. Some MVPs may be more complex, while others are relatively simple and can be done quickly. Let’s review some of the more common influencing factors:

     

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    MVP development project size/scope

    It’s almost a no-brainer; the bigger a project is going to be, the more money it’s going to take. But did you notice that I said “project” and not MVP? That’s because the scope (a key part of every project) is going to dictate how large your MVP is going to be. 

    There's no ready formula for reducing a project down to its minimum viable product. It boils down to “what is the simplest we can make our product while still being able to fulfill its core function?”.

     

    Learn more: MVP Development – 15 Steps to Build an Effective MVP

     

    For example, you might envision a timekeeping app that integrates with different accounting software, sends notifications, and generates useful reports. But your MVP is going to focus exclusively on capturing time entries because that’s the function that gives its customers the most value at this stage. 

    But change the project to an accounting platform, and the size of your MVP is going to be drastically different. The accounting software MVP needs a much wider set of functions than a simple timekeeping app in order to do its job, which means that the accounting software MVP will cost a lot more. 

     

    Chosen technologies in MVP development

    mvp-price-graf-3

    But not all technologies are created equal. Some are better suited to certain situations than others and could affect your budget differently.

    Age

    You want to work with technology that’s been around for a while, like ASP.NET Core or React. Established technologies tend to be more stable, and there are more developers who can work with it than the “trendier” technologies. 

    Relevance

    Age isn’t everything. COBOL is an old, established technology, but you wouldn’t want to be caught dead using it in your MVP. Using legacy tech like that without a good reason will drive your development costs sky high without any corresponding benefit. Stick to technologies that are still being used to develop new applications and avoid those that are seeing less use.

    Who’s backing it

    Does the technology you’re using have significant support behind it? ASP.NET Core is being backed by Microsoft, and Angular.js is being backed by Google. Even Node.js, which doesn’t have a company behind it, still has a large community of users. These backers will provide the support and resources necessary to work with the technology efficiently. Also, technology with lots of backing is more likely to be around in five years, so you won’t have to switch technologies mid-stream.  

    Manpower costs 

    Developer rates differ depending on the tech stack they specialize in. Developers in common programming languages tend to be reasonably priced, but developers who can work with niche tech stacks come at a higher cost.

    For instance, according to the "These are the highest paying developer skills and occupations" research by Kristen Felicetti published on Monster.com, full-stack developers in the US who work with Redis and React earn an average of $105,000, while those who work with the Spark computer framework and Scala language bring in an average of $125,000. 

    Employment status affects salary ranges, too. The same Monster.com study shares that full-time developers make an average of $98,949, compared to self-employed developers, who make an average of $82,293.

     

    PLAN YOUR MVP STEP-BY-STEP WITH OUR CHECKLIST
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      Greenfield vs. brownfield software development

      When you choose a car, there are no better or worse solutions. It all depends on your needs, context, and budget. We also cannot say that greenfield is always better than brownfield, or vice versa.

      Developers usually prefer greenfield projects because they can build the whole architecture from scratch. They are in the process from the concept stage and know exactly what is in their code. On the other hand, it happens that the client already has a finished product, all its elements and features work, and to create a completely new product, we just need to rearrange them and add some code. It is then a more reasonable option.

      It may be that brownfield software development will be more expensive because we have to start with an audit, a thorough check of the code, and verification of what is in the grass. It may turn out to be a more difficult option. However, if the changes are not too significant, it may turn out to be the right one.

      While we can usually develop a greenfield MVP between $40,000-12,000, we happened to make a brownfield from $20,000. We always try to check what needs to be done meticulously and why and verify which solution will be better not for us but for the client.

       

      Integrations 

      Integrating with existing software sounds easy on the surface- after all, many SaaS applications do it all the time, and services like IFTTT and Zapier make it look easy. But integrations are a thorny topic for MVPs for a number of reasons. 

      Access to partner software

      Many modern software products give development partners access to their code, documentation, or publicly released API that allows other software to integrate with their platform. In these cases, integrations can be managed, and the risks can be predicted and understood prior to launch.

      If these connections are unavailable, however, or the partner company is not cooperating, then these integrations may not even be possible, and the effort spent investigating it may be better used elsewhere.

      A number of integrations

      How many integrations will be required for the MVP to be able to provide value? Can the integrations be taken individually, with some available upon release and others to follow in future versions? Or do all the integrations need to be available from the get-go? 

      The number of integrations will significantly impact your project’s timeline and cost, and this will be compounded by their complexity and your access to the partner software. For best results, triage the integrations in your scope until you achieve the least number of integrations possible.

      The complexity of integrations

      It isn’t just the number of integrations that matters; it’s their complexity. Simple integrations that only involve a transfer of data, for example, are easy to pull off and won’t add much to the MVP cost at all. But if the interaction requires conditional logic or cascading actions, then that jacks up the potential costs considerably. So do two-way integrations that require live or regular connections between the two platforms.

      If you want to reduce the cost of your MVP, simplify the relationship between the two programs. Perhaps your team can discover a way to reduce integration complexity, either by interacting with the partner software in other ways or modifying the product’s functionality. You can work with a one-way integration first and upgrade it to a two-way integration later on.

       

      User demographics 

      What industry is the product being built for? Who will be the end-users of your MVP? How big of a user base are you expecting? These answers matter because they can impact your MVP’s overall cost.  

      If you’re building a HealthTech application, for instance, you will need to ensure that your MVP is FDA, HIPAA, or GDPR-compliant. If you’re creating an MVP for the financial industry, or retail, or anything else that processes transactions, you may need to invest in tighter cybersecurity measures like encryption and two-factor authentication, and others. Different industries may require different standards in the way your MVP is built. 

      If you’re expecting a lot of users, you'll want to optimize your MVP in such a way that it can handle that much traffic. There are documented incidents of products that have been launched to great fanfare, only for the product to crash because the company underestimated the demand on the servers. 

      Also, look into any special considerations that your users will need. For example, products that will have an international audience may require regional-friendly features such as language settings.

       

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      Your UX design should be as simple and streamlined as possible, but this becomes even more important if you know that your users aren't comfortable with technology, like in the case of seniors.

      Your technology partner will be able to guide you through the step-by-step process of identifying your user’s special needs and solving them.

       

      Learn more: The UX Design Strategy in the Software Development Process

       

      Quality expectations 

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      No software will ever be completely bug-free, but you will have to decide how much effort you will be putting into squashing those bugs. Do you only fix the major app-breaking ones and leave the rest for future updates? This will have the advantage of reducing your timeline and labor cost and also helps you get to market faster but carries the risk of annoying users.

      On the other hand, you could put your best foot forward and address as many bugs as possible. This is more expensive and takes a longer time to execute, but your users will have as seamless experience as you can make it and will (hopefully) leave with a good impression.  

      But “quality” doesn’t just refer to bugs. It also refers to how much attention you give to the user experience design. Things like being able to conveniently switch from one section of your app to another or send notifications when major events occur. Quality-of-life additions will go a long way towards getting users to love your product but could be considered a luxury depending on your MVP cost and timeline. 

       

      Futureproofing and scalability 

      When you’re creating an MVP, you’re not just creating it to solve current needs. It’s a forward-looking product that needs room to grow. Your MVP should have as simple a design as possible with a responsive layout so that it can run properly on multiple devices and platforms. We described a few factors you should know before starting the creation of your MVP in the article "MVP Software Development – How to Succeed at Creating Digital Products?".

      Using proper software development design principles may also require more up-front work, which will pay dividends in the long run. Software that is easy to maintain and modify will improve your scalability when you move past the MVP stage, so you can consider that cost investment. 

      Your project team will have to choose between a monolithic architecture or a microservices architecture. A monolithic architecture is when different components are brought together as a single program or platform. Most monolithic applications can handle relatively high traffic and are used by many existing major software projects. However, monolith applications can be challenging to scale if needs change. The larger and more complex a monolithic application is, the more difficult it is to make quick updates.

      Microservice architecture is built as a collection of modular services. Each module solves a specific business goal and is connected to other modules using an interface designed for the purpose. The microservice architecture is a better long-term option since individual modules can be swapped or updated as the need arises. They can also be scaled separately.

       

      PLAN YOUR MVP STEP-BY-STEP WITH OUR CHECKLIST
      Download checklist

        Build an MVP that will be well planned and functional
        Name
        Business email

         

        Interfaces required to build an MVP 

        How will your users use your solution? Should your MVP be usable across multiple devices, or it’s fine to go with a simple web interface? The more devices you want to cover, of course, the higher the cost will be. You have a few paths to choose from:

        Classic Web App

        All you need to worry about is how your MVP looks in a web browser - and only a web browser on a computer.

        Responsive Web Design (RWD)

        If you’re going to apply RWD, you need to decide that ahead of time. It requires the code be written using specific methods like the Bootstrap framework so that the MVP can have an easily adjustable screen resolution across multiple device types: mobile, tablets, and web. Suddenly switching to RWD in mid-project will be expensive since you’re going to have to rework the frontend.

        Progressive Web Application (PWA)

        A progressive web application framework ensures that your MVP will run on any standards-compliant browser. It contains elements of the RWD framework but has other capabilities such as being able to run without an Internet connection, opening via a desktop icon, push notifications, and stricter data safety requirements. 

        Native Mobile App or Hybrid Apps

        It’s also possible to build an app that your user downloads on the phone via the Google Play Store or App Store. A native app is developed for each system separately (the most common are iOS and Android). With hybrid solutions based on React Native framework, for example, we can create a mobile app for both systems at once.

        Each solution has its pros and cons, depending on the user’s needs and conditions. Fortunately, you don’t have to decide – it's worth having a technology partner do it with you.

         

        The founding team

        Founding teams are an essential source of domain knowledge and expertise, but, depending on the composition of the team, may not be as strong in product development. For best results, it’s better to find a partner that has experience in software and product development. Together, the founding team and the development partner will be able to leverage the best qualities of both parties and build a value-rich and cost-efficient MVP.

         

        DO YOU NEED AN MVP COST ESTIMATION? LET'S TALK!
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        The project development team 

        There’s no single correct way to staff your team; your project team composition is going to depend on multiple factors. 

        Team size and structure 

        How large are you expecting your MVP development team to be? Are you going to have a large org chart broken down into smaller sub-groups, or will you be operating with a smaller, leaner team? 

        The larger your pool of resources, the more you can get done, but that also means you burn cash faster. You’ll need systems in place to make sure they’re working efficiently and someone to manage those systems. That’s another mouth you’ll have to feed. 

        A smaller team will use up less cash per month, but the project may end up taking longer as a result. However, the trade off in efficiency might just be able to compensate for the lengthier timeline. 

        So which is better? According to "Faster and leaner: the trend toward smaller software development teams" research done by Aileen Horgan and published on atlassian.com blog, smaller development organizations of 1-100 members push projects to production faster. The study credits this to smaller teams having simpler processes with fewer cross-team dependencies.

        Experience

        Highly experienced developers cost more, which is why you don’t want a team composed entirely of senior developers. A team of younger, newer developers that are led by a single or a few highly experienced senior developers will be the most cost-effective arrangement for your project. 

        Skill/expertise

        The scarcer or more demanding a skill is, the higher the developer’s asking price will be. For instance, blockchain developers are relatively rare and can easily pull a six-figure annual salary compared to web developers who can be hired for a fraction of that cost. 

        To minimize this expense, use popular or established technologies to build your MVP. You’ll be able to choose from a wider pool of developers and have room to negotiate salaries if needed.

         

        In conclusion: how much does it cost to build a minimum viable product?

        When all is said and done, there are two numbers that truly determine how much MVP costs: hours spent and hourly rates.

        All of the other conditions I mentioned in the article above modify one or both of these numbers. Want a better-quality product? Spend more hours. Want developers that know what they’re doing? Pay your developers more. 

        Another way you can help control costs is by working with a partner company that has a software development team already in place. These partner teams are often composed of developers with experience with a wide range of projects and have a diverse collection of skills, which makes it more cost-effective to hire and recruit them as a group rather than assemble an internal team from scratch.

        Partner teams like ours have built dozens of MVPs and know how to make and estimate them. We can also advise you when it comes to evaluating feature sets, UX design, and technology. Reach out, so we’ll be able to provide you with no-nonsense feedback on your project’s timeline, MVP cost, and feasibility. 

         

        DO YOU NEED AN MVP COST ESTIMATION? LET'S TALK!
        FILL IN THE FORM

         

        cshark_michal-gorski
        Michał Gorski
        A Service Delivery Manager at CSHARK. Delivery-go-to person with various tools and approaches such as Project Management, Scrum and Agile. Passionate about value, business goals and communication.
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