Product ideation is no small task to accomplish. Instead, it is costly to build and maintain. Before working on a new mobile app, you must analyze your budget and the factors affecting the effectiveness of your MVP. This article investigates the elements affecting the price of building a Minimum Viable Product (MVP). Understanding them will enable you to launch your product more quickly and validate your idea.
Building an app can be a risky idea. Even the most well-researched ideas take a hit with app development.
So, for instance, you have an idea. You pick the pain points, tap into the right solution, and launch it. But only a few buy your solution, you run out of money, and the product dies. Time and Money are two finite sources that decide whether the business will make or break in today’s competitive arena.
One of the conundrums and reasons for startup failure discussed in our blog — A Step-by-Step Guide to Build a Minimum Viable Product (MVP) — is cash overrun (cited by 29% of startups).
Just a great idea is not enough!
To achieve optimal results, your budget and MVP must be planned together, or else the fate of your product will be the same as that of Flud: RSS-based news reader or social magazine.
It started in 2010 with a vision to become the best social news reader app, but it failed badly and got shut down in 2013. Indeed, it had a beautiful UI design. Still, it failed because of the following:
- Tough competition from existing similar products (Flipboard & Pulse)
- Lack of initial testing
- Running out of cash
Definitely, the cost to build an MVP is much less than the cost of Product Development. However, the most critical question is: How much does an MVP cost?
MVP Cost is an important factor to consider before embarking upon an MVP Development journey. We must first consider the main factors determining MVP pricing to know how much it costs to build an app(MVP).
Understanding The Cost Of A Minimum Viable Product (MVP)
a. What is an MVP?
A Minimum Viable Product (MVP) is a basic version of a product developed with minimum features and functionalities required to satisfy early customers and validate the product’s viability in the market. The main idea behind an MVP is to get a product to the market as soon as possible and iterate on it based on customer feedback.
b. Why is it important to know the cost of an MVP?
Knowing the cost of developing an MVP is crucial for any startup or entrepreneur. It helps them plan their budget, allocate resources effectively, and make informed decisions about the product’s viability.
Understanding the costs of developing an MVP allows startups to evaluate different development options and make informed decisions about their development approach. For instance, they can decide whether to outsource the development process, which can reduce costs but potentially impact quality, or build an in-house development team, which can provide better quality but may increase costs.
It can also help them identify areas where they can cut costs and optimize their development process, allowing them to build a successful product while minimizing costs.
Factors Affecting MVP Cost
There are different ways to build an MVP for your startup – hiring freelancers, managing the development independently, or hiring a software development company. However, every option requires an investment of time and money.
a. Planning an initial budget for MVP development
When hiring a good company with an experienced team of developers, the quote can range between $5,000 and $50,000. The price range varies as per your requirements and budget. You only need to choose the right MVP developer to bring agility to the MVP Development services. Usually, a mobile app or website development company gives valuable feedback and details on the New Product Development process.
b. Design components that decide the MVP cost structure of UX
The cost depends on the complexity of the design. The best approach to evaluate the cost of an MVP design is to estimate the User Interface (UI) to be used. Remember that the initial design has a separate cost.
To ensure an engaging User Experience (UX), the User Interface (UI) should be simple, easy to understand and navigate, and must keep the users engaged.
Preparation plays a crucial role in deciding the cost of design. If you want to save time and money, it’s good to plan before you set up a meeting with the company that you’ve hired for the design and Development Process. Once the preparation is done, you begin making the wireframe and mockups to ensure that things are on track.
The wireframe is a skeleton for your app/website. It can be drawn rough or even on a paper layout of navigation, screens, and elements in your app. It outlines the features and the complete idea of your app or Website. Tools such as Bootstrap can be used to create a wireframe. With available templates, you can build a rough layout within hours and for free.
On average, a wireframe may take 10–30 hours to develop. It may cost you nothing if you do it on your own. However, if you ask any software company to design a wireframe, $500 and above would be the estimated MVP cost, depending on the website or app engagement.
A mockup is an important aspect of designing and presenting projects based on ideas to the clients for a better understanding. If presented well, a good mockup can help you succeed.
“Mock-ups incite criticism from users because they are low-cost (can be made of cardboard) and low-fidelity. If a user is presented with an early version of a system that has required substantial work, he/she is likely to be more reluctant (as well as able) to criticise it.” – The Glossary of Human-Computer Interaction
The estimation of the landing page mockup is expected to cost approximately $500. Add another $50-$70 for every additional screen. Based on these prices, you can calculate an estimate for your own. This is how UX Design agencies usually charge for their services.
However, building a simple mockup will be easy if you are familiar with mobile app prototyping tools like Adobe Photoshop and Adobe Experience Design (Adobe XD). These well-known tools are beneficial and can help you save money since Photoshop costs $10-$20, while Adobe XD is free for starters.
(iv) Interactions within the page
It’s not just about creating simple mockups; there is another way to improve interaction within the page. The interactive mockup is a good chance for you to enhance customer engagement. Customers or investors would prefer an interactive solution to a static image.
Tools like Axure RP and InVision, are your best supporters in building an MVP platform. The MVP cost of Interactive mockups is slightly more than the standard mockup. All you need is your regular mockups and a subscription to one of these prototyping tools. Alternatively, you can outsource this work to a designer, and they will charge anywhere in the range of $100–$500, depending upon skill and expertise.
c. The number of features and their complexity decide MVP pricing
The next factor in MVP cost is prioritizing and listing the number of essential features for every phase of a user’s journey. The user journey has three important parts — the user, user actions, and your action.
“In this age of information abundance and overload, those who get ahead will be the folks who figure out what to leave out, so they can concentrate on what’s important to them.” – Austin Kleon, a Renowned Novelist
Several ways to define the number of features you can add to your MVP:
(i) Blue ocean strategy
‘Blue ocean strategy’ is a simple but effective framework for developing a successful MVP Development.
Blue Ocean strategy simultaneously pursues differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, making the competition irrelevant.
The business you focus on is represented by a blue line, which is to be compared with the key players in a similar industry, as shown by the red line in the graph.
The x-axis lists the key competing factors of your target business, and the y-axis assesses the quality offered for each.
The more your blue line (Strategic Canvas) differs from the red one (those of the competitors), the closer your business is to a Blue Ocean Shift.
(ii) MoSCoW method
We have discussed this method in our blog: How Agile Estimation Techniques Pave the Way for Successful Product Development.
- Must-haves: includes the items with the highest business value and the ones that demand the lowest effort
- Should-haves: includes the items that are of higher priority and will need some effort to be delivered
- Could-haves: includes all the backlog items that might be desirable in terms of scope, but are of lower business value
- Won’t-haves: includes those items that are agreed upon to be moved to later releases
While building an MVP, list your startup’s “nice-to-have” features. Have this list ready to prioritize and ask questions to yourself like:
- What do you want your users to achieve with the product?
- What features must be included to make the product more attractive and efficient in its final version?
Before your team of developers starts working on the MVP, it’s crucial to organize categories like ‘must-have,’ ‘nice-to-have’, and ‘don’t care’ and develop an MVP cost of including these features. Then ask the developer to work accordingly. This will lessen the chances of failure.
d. Users’ understanding
One of the main principles of any business is to understand the users well. Product Development and customer development should go hand-in-hand. Both are very important, and neither can be ignored. By testing your product, you clearly understand what your users want and how well your product aligns with the market demand before it gets too late.
“Beautiful Product Development in an ugly market segment simply makes no sense.” – Dan Adams
Choosing customer segments intelligently allows tailoring the marketing mix to more focused customer needs. Geoffery Moore presents the Innovation Adoption Lifecycle in his book, Crossing The Chasm. He explains the importance of targeting the market while building and selling an MVP to gain consistent feedback. This, in turn, can help in Product Development.
Unlike the market demand, MVP pricing depends on the business and functional requirements. If we take the example of an eCommerce website, the possible MVP options could be:
- The first version of the MVP is simple, where users navigate as per product categories such as apparel, appliances, healthcare products, etc.
- The second version might be more complex – collect data related to customer preference and make recommendations accordingly.
- The third version will be even more complex, keeping the business perspective in mind, which is more expensive to develop.
The product type to be built is also a key factor when determining the MVP cost. For example, gaming apps need many graphics and other built-in mobile mechanisms, whereas a business app deals with content, database management systems, and high-security features.
e. Technology stack for MVP development
Organize and identify the estimated technology stack for your MVP. Whether you are a techie or a novice, you can always ask for recommendations and see what your development team suggests.
While planning MVP for a startup, you can consider a few tailored solutions that can be easily coordinated.
- Ruby on Rails for your backend because it’s 30–40% faster to develop with Ruby on Rails compared to similar technologies.
- React Native, a cross-platform app development framework for Android and iOS apps, as about 90% of code can be reused with it.
However, if you want to avoid future challenges, take suggestions on whether you should use a native or hybrid solution.
Rails and React Native are definitely not the only frameworks out there. While doing your due diligence, it’s worth considering other options too. Choosing the right tech stack ensures optimum project quality and future growth to create a good impression on the target audience.
f. Time required to build an MVP
The time taken to complete the first version of an MVP should not exceed more than 2 weeks, which covers features like Ecosystem Map, Stakeholder Map, Persona, Empathy Map, User Journey Map, and Prioritised MVP Backlog.
The cost ranges from $15 to $75 per hour. The early budget varies a lot and relies on the company’s hourly rate and the number of developers associated with the project.
For example, a company works for 2 months with 8 developers for $20/hour, and another works for 4 months with 4 developers for $20/hour; which one is better?
The answer is, of course, the former, because manual power was increased and the time taken to develop your product was decreased. This helps with faster time to market and a better ROI.
The average asking price to build an MVP starts at $10000. But it depends on the complexity of the project. Each project has its specifications, which further influence the timeline and budget of MVP Development.
The benefits of shorter MVP development time
- It leads to lower MVP Development costs.
- The faster you release the product to your target audience, the quicker the feedback will be. This enables you to make improvements and changes to your product and quickly release software with an updated version.
- It reduces the risk of your idea being stolen.
The road to having an MVP that functions beautifully is not easy.
To turn your ideas into reality and get onto your target audiences’ radar, formulate a business hypothesis, identify the main functions, and pick a good MVP development company for your project.
Tips To Optimize MVP Development Cost
a. Prioritize MVP features
One of the best ways to optimize MVP development costs is by prioritizing the essential features and functionalities of the product. This means focusing on developing only the features necessary to launch the product in the market and deliver value to early customers.
Startups should create a list of features based on customer feedback, market research, and business goals and rank them in order of importance. Prioritizing features in this way helps startups avoid over-engineering and building features that customers may not need, reducing development costs.
b. Choose the right technology stack
As we discussed above, startups should choose a technology stack that is both cost-effective and efficient. Choosing the right technology stack can reduce development time, as developers will be able to build features faster with technologies that they are familiar with.
c. Partner with a reliable development team
Partnering with a reliable development team can help startups optimize development costs and ensure they deliver a quality product. A dedicated development team should have experience in MVP development, be familiar with the chosen technology stack, and have a proven track record of delivering successful projects. Working with an experienced development team can reduce development time and costs, as they can guide best practices and potential pitfalls to avoid.
Startups should consider partnering with a development team that offers flexible engagement models, such as a dedicated team or time and material model. These models allow startups greater control over development costs and prioritize development tasks based on budget and timeline.
How Net Solutions Built An On-Demand Mobile App Prototype For Frictionless Payment
An Ed Tech Startup approached Net Solutions for a mobile app development project that would address some pertinent questions about the education sector–aligning the right tutors for the student community and providing frictionless payment interaction between tutors and students.
The Challenge: Creating a mobile app prototype(s) that would fulfill the expectations of the tutor-student community using this app.
Net Solutions built two interactive mobile app product prototypes for the tutor-student community–Teacher Application and Student Application–using the following mobile app prototyping tools:
- For the high-fidelity prototype, we used InVision
- For the low-fidelity prototype, we used Axure RP
Frequently Asked Questions
How to calculate MVP in Scrum?
MVP is calculated by identifying the most important features that will deliver value to the customer and breaking them into user stories. The development team then estimates the time and effort required to develop these user stories and prioritizes them based on their value to the customer.
Is MVP lean or agile?
MVP is a lean concept that is often used in Agile development. It is a product development strategy that aims to deliver value to the customer with minimum features and functionalities required to satisfy early customers and validate the product’s viability in the market.
What is MVP in Jira?
MVP in Jira is a product development approach where the product team uses Jira, an agile project management tool, to manage their MVP development process. It involves breaking down the product development process into sprints, creating user stories, and tracking the progress of development tasks.
What is the difference between MVP and MMP?
MVP (Minimum Viable Product) is the most basic product version that delivers value to early customers and validates the product’s viability in the market. MMP (Minimum Marketable Product) is a complete product that includes additional features and functionalities required to reach a broader market. In other words, MMP is the minimum version of the product that is ready for commercial release. At the same time, MVP is the minimum version ready for customer feedback and validation.
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