MVP Cost Breakdown: The Insider’s Guide to Building Smart and Lean

MVP is an acronym that can stand for two things.

You usually hear it thrown around in sports where it means the most valuable player – typically the best player of a season or a finals game.

The other usage comes from the tech world, and it means minimum viable product – a simplified version of a product created to test the market without burning through too many resources.

The two meanings are wholly unrelated, and at the same time, they have a glaring similarity. Just like a sports MVP can make or break a team's season, so can a minimum viable product make or break a business.

In this blog, we dive into the latter meaning and provide a no-nonsense overview of MVP cost. We offer you foresight, allowing you to turn that great idea bubbling around in your head into a reality without breaking the bank.

Importance of an MVP

George Patton, the famous US WW2 general, once said that a good plan violently executed today is better than an excellent plan executed next week.

Ideas and plans are a dime a dozen. To know whether the market wants any part of them, you need to release a product and see whether your brainchild aligns with user expectations.

Testing the market is a crucial part of the process, and the best way to do it is to create a minimum viable product consisting of core features and then decide on later steps based on user feedback.

A study conducted by CB Insights shows that 35% of startups fail because there is no market need for their product.

You may have an innovative solution on your hands, one that will take the market by storm. You also might have a dud, one of many already existing solutions that the consumers don't want.

You won't know until you test the market, and the best way to do it is to build an MVP.

Benefits of Building an MVP

We've already seen that building an MVP is relevant because it allows us to gauge product-market fit. However, there are other strong arguments in favor of MVP development. Here are some of them:

• It lowers software development costs by allowing you to focus solely on key features. This focus on the basic functionality lets you prioritize features that users want and need.

• It enables you to release your product and gather critical user feedback quickly, meaning you might be ahead of potential competitors.

• It allows for an iterative approach to development, meaning that your product can evolve by adding new features based on user feedback and real-world use.

• Among other factors, having an MVP increases your chances of landing investors, as they are more likely to back a project that has already shown some success.

• Learning from mistakes and adapting to shifting user needs is simple because adjustments are made based on data, not assumptions.

Hopefully, now you have a picture of why you should build an MVP. In the following segment we'll take a look at what influences MVP pricing.

Factors Affecting MVP Development Cost

If you plan on developing a mobile or web app, you're probably wondering about pricing. How much does it cost? Well, the actual number you'll end up paying depends on two key factors:

What kind of platform are you trying to build?

• Is it a mobile app or a web app?

• Will it be simple, or will it have advanced features?

Who will develop it for you?

• Are you hiring a large company or a smaller agency?

• Are freelancers an option?

• Which part of the world are the developers located in?

Once you've answered these questions, getting a feel for a number becomes much less opaque.

9 Factors That Influence Software Development Cost Regardless of Who You Hire

First, you need to understand what influences custom development costs. The following nine factors influence the MVP development process regardless of who you hire or what you want:

• Level of customization

• Updates, testing, support and maintenance

• Technologies you need/want

• The complexity of the platform

• How large the future user base is

• Number of features

• The location where the app is developed

• Hidden development costs

Mobile and Web App Development Costs

The development costs of mobile and web apps are strongly influenced by complexity and feature count.

Simple apps with a few core functionalities won't cost as much as complex solutions requiring complex integrations, intricate interfaces, and ironclad security features.

Below, we break down typical pricing for various app types.

Simple Apps

Simple apps typically include around 6-7 basic functionalities.

They feature a straightforward registration process, basic user interfaces, and limited integrations.

Examples include to-do list apps, basic medicine tracking systems or alarms, the first versions of recipe/cooking apps, and simple note-taking apps.

The price range for these types of apps is around $15,000 to $20,000.

Intermediate Apps

Intermediate apps offer more features and better user experiences.

These might include user profiles, data synchronization, push notifications, and basic analytics.

Examples include fitness apps, personal finance trackers, and simple social networking apps.

The price range for these types of apps is around $20,000 to $40,000.

Complex Apps

Complex apps have more robust functionalities and require robust development.

These include custom e-commerce apps, MVPs of CRM systems, and e-learning apps.

They often involve more intricate user interactions, databases, complex UI/UX, and integrations.

The price range for these types of apps is around $40,000 to $100,000.

More Complex Apps

These apps are even more sophisticated and feature-rich.

They included ride-sharing apps, real-time data apps, live commerce platforms, and complex e-learning apps for schools.

Additionally, software developed for government use falls into this category, requiring advanced security and compliance features.

The price range for these types of apps is around $100,000 to $300,000.

Enterprise Level Platforms

Enterprise lever platforms are highly sophisticated and designed for large-scale operations.

They included comprehensive management systems, extensive user roles, data analytics, and integration with various enterprise systems.

Examples include corporate management platforms, enterprise resource planning (ERP) systems, and large-scale customer relationship management (CRM) systems.

The price for these types of apps is around $500,000+.

Costs You Didn't Plan For

You might think paying the developers to create your product is the end of your financial woes. But don't be so sure.

The truth is you might have overlooked some hidden costs of software development. These costs can pile on and create some financial trouble.

When launching your product, there are too many things to consider, and you won't think of everything. Usually, the things you don't see right away are the ones that cost the most in the long run.

Ignoring or thinking of them too late can damage your product and budget. That's why you should consider them early on and plan your budget accordingly.

And don't think of them as just more bills to pay but as things that will add much to your product.

Change Request Costs

Any changes to the project scope will cost extra, and these changes occur at least once in every project.

That's why it's a good idea to set aside around 10% of your project budget specifically for these changes.

You never know when you'll need to introduce new features, and things that seemed obvious early on might not be so straightforward as the project progresses.

However, you shouldn't worry too much – if the changes aren't fundamental, the costs won't be too high.

Third Party Costs

Third-party services, licenses, or tools may occasionally be required to complete the project.

For example, you might need a specific tool to test the software or a license for a library that adds crucial features.

Keep in mind these are fixed costs because they come from outside businesses.

Overtime or Rush Changes Costs

You can't plan and prepare for everything; some things will inevitably be out of your control.

Projects with tight deadlines or urgent changes require overtime work or changes in the work process.

It's no one's fault that this happens, and it happens at least once or twice, so make sure to factor it into the budget.

Maintenance and Support costs

Maintenance and support are the number one hidden costs first-time founders overlook.

Many have problems grasping how long you need maintenance and support.

And the answer is as long as you want people to use your app.

Maintenance and support are necessary to avoid bad reviews, poor customer experience, and abuse of your platform.

Once the project is completed and as long as the product is running, you'll need to spend part of your budget on these.

Domain Costs

A domain name is like your online address.

There are costs involved in keeping this address active.

These costs include the fees for registering the domain name the first time and the fees to renew it each year.

They're usually not very high.

Hosting Expenses

Hosting is what keeps a website or application online and accessible.

The service involves using server space and resources.

Hosting costs are significant because they cover not only the server space but also the maintenance cost.

These costs depend on the level of service required (like the amount of storage) and include monthly and annual fees.

Compliance costs

Meeting regulatory requirements and industry standards can involve additional expenses.

However, meeting these requirements and standards is a must.

If you don't follow them, you risk getting sued or fined, so you should always stay up to date.

Choosing the Right Development Team

There are a few paths that you can take when choosing how to develop your MVP. You'll need to make some difficult decisions, each a compromise on three major fronts.

Those fronts are cost, quality, and speed. It's up to you to find a balance that best suits your business and make a choice that maximizes the resources you have on hand.

Some MVPs will require large in-house teams of multiple developers, designers, testers, and a project manager. With smaller ones, you can get by with a single full stack developer and designer. Don't worry, we'll explain the distinctions in detail below.

In-House Development Team

An in-house team is an excellent choice for founders with deep pockets or ones that managed to secure funding.

This approach allows total control over the development process and ensures that the team is aligned with the idea behind the product.

It also leads to better collaboration with other departments and more flexibility, as things like contract renegotiations and bureaucracy have little bearing on developing new features or changing existing ones in this setting.

Although the benefits sound pretty grand, the disadvantages are as well. Starting with a limited budget is all but impossible, making it a viable option only for well-established businesses. You won't build the company out of a garage on this route.

Also, having a team that's overly familiar with the product can lead to tunnel vision, stifling creativity in the long run.

Although assembling an in-house team for an MVP is overkill under most circumstances, if you are a well-established business with a long-term vision and enough resources to fuel it, putting together an in-house team could be the ideal choice.

Dev Agency

Using a dev agency is a great choice for your MVP as it offers long-term benefits. It's cheaper than going the in-house way over the long run because there is no ongoing payroll to worry about after the project is complete.

And though it can be a bit expensive in the short term because of the project-based pricing model, there are no high recurring costs down the line unless extensive maintenance and support are needed.

Team location plays a significant role in determining the pricing, as development costs vary greatly depending on where you're hiring. An hourly rate for a developer will be different in San Francisco, Buenos Aires, Beijing, and Belgrade.

In fact, an unambiguous advantage of partnering with a dev agency is the flexibility in pricing based on team location. Development agencies operate globally, meaning you can hire some of the best engineers from around the globe at competitive rates without compromising on quality.

Eastern Europe, in particular, is becoming one of the hottest software development hubs thanks to a combination of high-quality engineering programs that create capable and innovative professionals and affordable pricing that has some of the world's largest companies offshoring their development needs.

With offshore dev agencies, you get a structured, organized, and efficient team. What about cultural differences, you may ask? Thanks to globalization, they know your market inside out, so they understand user behavior and local trends and can tailor your product to those. And their processes are streamlined so you get high-quality deliverables on time.

Communication might pose a bit of a challenge, but good organization and strong project management from development agencies will ensure everyone is on the same page. A first-rate offshore agency will have a clear vision and allow few misunderstandings, which always results in a smooth development experience.

Freelancers

Hiring freelance developers is potentially the only route if you lack funds.

The challenges associated with developing a minimum viable product this way are manifold. However, if you have a technically inclined co-founder who can take the reins and be the tech lead, good things can happen.

One of the advantages of taking this route is that MVP development costs are significantly lower than with an in-house team or a dev agency because of the much lower overhead costs.

The fact that you hire freelancers on a per-project basis means avoiding long-term contracts is the norm, so you don't have to worry about paying ongoing salaries upon completion.

Hiring experienced freelancers can also lower your time to market, but it's a gamble. Today, everyone and their mother are freelancing.

This approach could mean you'd need to compromise significantly on the developer's availability as they will likely be working for multiple clients.

Communication could also be an issue if coordinating multiple people is needed, and the quality could suffer as people have different standards.

Outsourcing MVP App Development

Likely the best option for small and medium-sized projects. If you want to keep MVP costs low without sacrificing quality, by all means, you should outsource development to a trusted third party.

Outsourcing MVP development is usually a stellar option for businesses that want the best of all worlds. Not only does it cut down the MVP cost by allowing you to pay labor rates in regions with lower salaries, but it doesn't make you compromise on quality and availability the way you would have to with freelancers, for example.

Outsourcing allows for speed, as most outsourcing agencies have ready-to-go development teams, ensuring projects can get off the ground quickly.

It's also a great solution because of the flexibility to scale resources as the project progresses without worrying about paying out monthly wages as you'd have to with an in-house team.

Minor communication issues can arise owing to different time zones and languages. However, you can iron them out with good organization and planning, which cannot be said for significant issues like sketchy quality and high infrastructure costs you get with the other options.

All things considered, outsourcing is a wise choice for any budget-conscious business as it keeps the quality of work associated with local agencies and in-house teams at much lower rates.

To learn more about the benefits of outsourcing agencies check out our post on the subject.

Tips for Cost-Effective MVP Development

As we've explained, there are a lot of factors influencing MVP costs. Once those costs start piling on, unpleasant issues can ensue. That's why in the following section, you'll find some tips on how to take a prudent development approach and hopefully not blow your entire MVP budget.

That way you'll have money left over to spend on future product iterations or other crucial aspects of the business like sales and marketing.

Prioritizing Features

When building your MVP, you want to keep costs down without sacrificing quality. One of the key factors to consider is prioritizing which features will make it into the MVP and which ones aren't that important. To determine this, you need to:

• Define the problem your product should solve.

• List out potential features and rank them based on importance.

• Categorize features into groups. You could do core features (must-haves), basic features (should-haves), nice-to-have features, and won't-have features that aren't needed.

When making these selections, your main criteria should be facilitating a smooth user experience by ensuring the core use case actions (like signing up, placing orders, or booking services) and the user interface are top-notch. To see how you can boost user engagement using the principles of gamification check out our blog post on the subject.

It would also help to consider whether the features are technically feasible, as some might be too difficult to implement. Focus on features you can develop quickly, which still offer significant value to your target audience.

Choosing the Right Technology Stack

Choosing a technology stack is another critical task. One that will determine the development speed, scalability, and ability to maintain your MVP down the line.

It's a great idea to use well-documented frameworks that have extensive libraries and are backed by large communities. This makes the developers' jobs easier and leads to a smoother development process.

Some good choices are:

• Frontend – React.js, Angular.js, and Vue.js

• Backend – Node.js, Nests.js, and Django (Python)

• Mobile – React Native and Expo

You'll notice most of the listed choices rely on JavaScript. It's wise to base the tech stack on a single programming language because your MVP will be developed quickly.

Javascript is the most commonly used programming language according to a survey on Stack Overflow, with 63.61% of the 87,585 developers surveyed claiming to use it.

Your final MVP cost will be lower because compact, more specialized teams will be working on the project. In fact the same team can oversee the project from start to end.

Scalability will also prove easier. You can start with a simple MVP and build on it later without worrying about switching technologies or rewriting the app.

Not to brag, but our team at brigit.dev are wizards when it comes to JavaScript frameworks. If you're interested in seeing how we helped out some ex-Google sales experts by creating Rewardly, a gamified task management system, check out this case study.

Reducing Development Time

We can't stress enough how important it is to get your product out on the market quickly. Studies show startups that delay time-to-market by six months can lose up to 33% of their potential revenue. Too much hesitation and idling could lead to somebody else turning your dream into a reality.

To do this as expediently as possible, you want the development phase to be brief. You can work the kinks out in later iterations based on user feedback. Here are a few strategies to expedite the process:

• Prioritize core features at the heart of the problem you're solving for your customers.

• Use existing libraries, frameworks, and APIs. Try not to reinvent the wheel; the problem may require a unique solution, but it likely won't require unique code.

• Ensure the project manager adopts agile methodology, as rapid testing and feedback-based adjustments are necessary for MVP development.

• Build using cross-platform frameworks like React because it allows you to deploy a hybrid app, meaning it will work both on iOS and Android.

Conclusion

Long story short – the time to start building your MVP is NOW. Any delay means letting someone else bring your idea to market first. Whether bootstrapping or pitching to investors, an MVP is paramount to test the waters without breaking the bank.

Perfection isn't the goal – it's about, as Steve Jobs put it, poking life and seeing what comes out the other end. It's about getting real-world feedback and evolving.

As a founder, you must stop fantasizing about the ideal product and start executing. Your future customers are waiting, and the competition isn’t slowing down. So, dive in, build smart, and iterate fast.

What's Next ?

Ready to turn your idea into reality? Don’t be that person who sits on the sidelines while the competition gets ahead. Our team at brigit.dev specializes in helping founders bring MVPs to life – fast. Our experts will turn your ideas into a working product that customers can actually use and provide feedback on.

Whether you’re a startup founder bootstrapping your way to success or a business looking to innovate quickly, we have the skills and tools to help you get there. Contact brigit.dev today, and let’s make that MVP of yours a game-changer. Your customers are waiting – let's indulge them.