MVP development offers several advantages to businesses and it is common knowledge that MVP development incurs less cost than full-fledged product development.
However, the answer is not enough for most business decision-makers – knowing the ballpark estimate of MVP development cost gives a far clearer picture and allows businesses to plan, budget, and strategize accordingly.
This blog breaks down MVP development costs based on the list of factors that influence it.
Progression from an Idea to an MVP
Turning an idea into a Minimum Viable Product (MVP) involves several stages that require time, effort, and expertise. Below is a detailed breakdown of the costs incurred during each phase of MVP development.
Discovery
The discovery phase is crucial for laying a solid foundation for your MVP. This stage involves the following tasks:
Requirement analysis:
Understanding the project requirements and defining the scope.
Wireframing:
Creating initial sketches of the user interface to visualize the layout and functionality.
Proof of concept development:
Developing a basic version of the product to validate the feasibility of the idea.
Prototyping:
Building a more detailed model to test specific features and functionalities.
Estimated time required:
This phase typically takes a few weeks to a month and costs around $10,000 – $12,000
Development
The development phase is where the actual product is built. This stage requires the following expertise and tasks:
Expertise required:
Designers:
Designers with relevant experience and expertise to create an engaging and user-friendly interface.
Developers:
A team of senior, mid-level, and junior developers proficient in technologies required for the project. Developers typically write the code for the application’s functionalities.
Project Manager:
Typically, one project manager who oversees the project and ensures that it stays on track.
QA Engineers:
To test the application and ensure it is free of bugs.
Tasks involved:
UI/UX Design:
Creating detailed designs for the user interface and experience.
Feature programming:
Writing the code for the core features of the application.
Feature testing:
Ensuring each feature works correctly through rigorous testing.
API development and integration:
Developing and integrating application programming interfaces to enable various functionalities.
Feedback implementation:
Incorporating feedback from the client and users to improve the product.
Market deployment:
Deploying the MVP on the intended platforms, such as app stores.
Estimated Development Time:
It takes around 6-8 months to develop an MVP.
Accumulated cost based on the talent’s hourly rates:
The cost can vary significantly depending on the complexity of the project and the location of your development team. On average, it ranges between $40,000 and $80,000.
Options for MVP development
In-house development
Scenario 1 – Already have an in-house team
How this works: If you already have an in-house team, the MVP development process involves utilizing your existing resources to build the product. Your team will be responsible for all aspects of development, from initial design to deployment and maintenance.
Pros:
- Control: You maintain complete control over the development process.
- Communication: Easier communication and collaboration since the team is within the same organization.
- Confidentiality: Reduced risk of intellectual property theft.
Cons:
- Resource Strain: Your current projects might suffer if resources are diverted to the MVP.
- Limited Expertise: Your team might lack the specific skills required for the MVP.
- Cost: Fixed costs associated with maintaining the team, regardless of workload.
Scenario 2 – Hiring an in-house team
How this works: This involves recruiting new employees specifically for the MVP project. This can include developers, designers, testers, and project managers.
Pros:
- Dedicated Team: A dedicated team focused solely on the MVP can increase productivity and quality.
- Tailored Skills: You can hire team members with the exact skills needed for the project.
- Long-term Value: The team can continue to develop and maintain the product post-launch.
Cons:
- High Initial Cost: Recruitment, salaries, and benefits can be expensive.
- Time-Consuming: The hiring process can be lengthy and might delay the project start.
- Uncertainty: If the MVP fails, the investment in the team might not yield the expected return.
Additional Consideration: Only consider hiring an in-house development team if the estimated profits from the MVP are projected to outweigh the costs of development.
Staff Augmentation
How this model works: Staff augmentation involves hiring temporary external developers or other professionals to supplement your existing team. This can be done through contract work, freelancers, or agencies.
Pros:
- Flexibility: You can scale the team up or down based on project needs.
- Cost-Effective: Lower costs compared to hiring full-time employees.
- Access to Expertise: Gain access to specialized skills that your in-house team might lack.
- Speed: Quickly ramp up your development team without the lengthy hiring process.
Cons:
- Integration: External staff might take time to integrate with your in-house team.
- Communication: Potential communication barriers if the augmented staff are remote.
- Dependency: Reliance on external personnel who may leave once the contract ends.
- Quality Control: Maintaining consistent quality and oversight can be challenging.
Outsourcing to a Software Development Company
How this model works: Outsourcing involves contracting an external software development company to handle the entire MVP development process. This includes everything from initial design and development to testing and deployment.
Pros:
- Expertise: Access to a team with broad experience and specialized skills.
- Focus: Allows your in-house team to focus on core business activities.
- Speed: Development companies often have established processes and can start quickly.
- Cost-Effective: Potentially lower costs compared to maintaining an in-house team, especially for short-term projects.
Cons:
- Control: Less direct control over the development process and priorities.
- Communication: Potential communication issues due to time zones, language barriers, or different work cultures.
- Quality and Reliability: Varying quality between companies; need to thoroughly vet potential partners.
- Security Risks: Increased risk of intellectual property theft or data breaches.
Evaluating the Software Development Company:
- Reputation: Research the company’s history, client reviews, and case studies.
- Expertise: Ensure the company has experience in your industry and with similar projects to gauge the effectiveness of their MVP development services.
- Communication: Assess their communication practices and ensure they align with your expectations.
- Transparency: Look for a company that provides clear timelines, cost estimates, and regular progress updates.
- Post-Launch Support: Consider the availability of ongoing support and maintenance services after the MVP launch.
Additional Factors that Influence the Cost of MVP Development
When developing a Minimum Viable Product (MVP), various factors can significantly impact the overall cost. Understanding these elements can help in better planning and budgeting for the project. Here are some crucial factors that influence the cost of MVP development:
Technology Stack
The choice of technology stack is a pivotal factor in determining the cost of MVP development. If the project requires the use of cutting-edge or highly specialized technologies, the cost will likely be higher. This is primarily because experts in these niche areas are often scarce and command higher salaries. For example, employing a tech stack that includes advanced machine learning algorithms, blockchain technology, or uncommon programming languages can drive up costs. Conversely, using more common and widely adopted technologies can reduce expenses, as there is a larger pool of available talent.
Location
Geographical location plays a significant role in the cost of MVP development. The hourly rates for developers and designers vary considerably around the world. Typically, Asian countries such as India, Vietnam, and the Philippines offer the most cost-effective options, with lower hourly rates compared to their counterparts. In contrast, North America and Europe are among the most expensive regions for hiring tech professionals. For instance, a developer in the United States or Western Europe might charge three to four times more per hour than a developer in Southeast Asia. Thus, choosing a development team from a region with lower labor costs can significantly reduce the overall project budget.
Project Scope
The scope of the project is another critical factor affecting the cost of MVP development. This includes the number of features and functionalities, the complexity of the application, and the level of UI and UX design required. A project with a vast array of features, intricate functionalities, and sophisticated user interface design will inherently cost more than a simpler, more streamlined MVP. For instance, an MVP requiring advanced data analytics, real-time synchronization, and custom animations will necessitate more development time and expertise, thereby increasing costs. Additionally, high standards for user experience and interface design will demand more resources in terms of design and testing, further driving up the expenses.
It is difficult to give exact numbers for MVP development cost estimations, there are multiple factors of consideration including the nature of team onboarding, the technologies selected, and the market you are targeting.