Building startups is exciting, they said. It is always about new ideas on the brink of becoming products and entering the market and users’ lives… Well, that is a romanticized way of looking at it. Besides being exciting, startup development goes hand in hand with numerous fears and concerns. And the top fear title goes to the issue of cost.
Right, you may have a great idea in your mind, even a more excellent plan of implementing this idea. But all this may strike off the rocks of strict budget limits. So how much is enough to build an MVP?
As a Business Development Manager at Uptech, I have closed deals with many startups with both big and limited budgets. In this article, I will try to respond to these concerns by unveiling:
- How much MVP development costs;
- What factors fall into the price of MVP development;
- How the MVP development price is constructed;
But first, let’s figure out what MVP is and why you should build itt. Let’s start!
What is MVP and Why Build It?
MVP is the first version of the product, which includes only the basic features of the app. Usually, these basic features complete the essence of the app itself and display its innovativeness.
Imagine it as a watch, which is also a run tracker, player, and audio organizer. Basically, this is still a watch. That is how it works with startups – you highlight the features that form the basis of your product and make a viable product with the least effort and time. Congrats, you’ve got your MVP!
Here is how MVP helps you in Product Development:
- Collecting feedback. The biggest value of MVP tests is users’ feedback. With users’ feedback you can improve and iterate your product based on real opinions, not some ephemeral hypotheses.
- Saving up your resources. As sadly as it is, MVPs tests can show that users are not ready to use your app or pay for that. Well, that happens too. But the good news in this case is that you had not wasted months of work for the app development, that proved a failure.
- Reduced time to market. As MVP takes much less time than conventional development, you are most likely to launch it in 1-3 month, which can be much faster than your competitors.
- Getting investments. Besides only testing, an MVP is also an instrument for raising funds for your business. A viable product can be presented during pitches or during crowdfunding activities.
Check out our Ultimate guide & Checklist on building MVP.
If you want to learn more about why build MVP, read our article How to build an MVP.
Factors Affecting Your MVP Price
Now we can talk business as we have figured out what MVP is and how it works. So what is the price of MVP? That's a complex question that is impossible to answer without looking at the core factors affecting each case's cost. So let us take a look!
Scope of work
Among the factors that affect the price of MVP development, the scope of work is the main one. The scope of work covers two components:
- Features that will be included in the MVP;
- The complexity of implementation of such features.
These two factors especially matter when we talk about MVP development and how much it can cost. MVP should only contain features that make it viable to function and perform an idea. And, frankly, this is the most complicated part. It can be challenging to highlight the features that form this core of the product because everyone can have different takes on it.
Prot Tip: Usually, startup cofounders try to make MVP in the simplest way possible to test the idea and raise funds for further development. Usually, not only the number of MVP features will be limited. Also, both the features and design will not be complicated for such an app.
At Uptech, we usually consult our clients about the best way to build their MVP, which will be within their budget limits and time constraints without compromising the quality.
- We always ask the cofounder to tell about their idea and define the benefits of this potential product. Also, we always listen to how the client sees the MVP and convert these comments into the requirements.
- The product manager analyzes the requirements and sets the roadmap for the project. Besides that, the PM will try to come up with the most reasonable list of functionalities.
For example, if you want your app to have authorization functionality, there is a way to do it simpler by organizing the authorization via third-party accounts (like Google or Apple).
Time of development
Time of MVP development is another factor that influences the total cost. In the case of MVP development, time limits are usually shorter – 1-3 months. Limited time development helps co-founders create a competitive product, which will make a statement on the market earlier than anyone will realize the idea.
Complexity of UX/UI Design
UX/UI design is also an essential factor affecting the price of MVP development. Yet, sometimes a simple design suffices to develop a reasonable MVP.
However, when the design plays a vital role in the essence of an app, a more complicated design may be required with animations, 3D elements, and other custom features.
Number of platforms
Will you build an iOS or Android app? Or maybe it will be cross-platform? Will it also be a web app? Answers to these questions essentially affect the scope of work and the price of MVP development.
Third-party apps integrations
Sometimes you do not need to build a feature right from scratch. It is much easier to integrate a ready-made solution and customize some of its features. However, building integration is also time-consuming, so that might affect the cost if your MVP has integrated features.
Hourly Rate
Hourly rate is another factor that plays into the total cost of MVP development. The influence of this factor is especially palpable when comparing it across different regions. For example, the average hourly rate in the USA and Europe is around $150 per hour. However, if you move further to the Eastern-European regions, the situation might surprise you in a good way.
At the same time the average hourly rate in Eastern Europe is $45 per hour. This comes with high professionalism and a good English knowledge of Eastern European programmers. By the way, the time difference is also not dramatically different.
Team Size and Type
The size of the development team is usually defined by Project Managers based on the project requirements and stakeholders’ constraints. Many mistakenly think that the more people work on your project, the bigger your monthly invoice is. Yet, a bigger team size decreases the development timelines. In terms of MVP development, this can be a go-to option.
In the same way, team type can essentially affect your paycheck. Here are the most popular team types:
- Dedicated team: every teammate booked for an entire working timeline. It can be pricey. But if you gather the right team, the development speed will be higher, which will result in a better product.
- Time&Material: in this model, the work is billed based on the time spent by the team. For a small-middle scope project, it is always 1-6 months. And, if there are delays due to the feedback loop – this time is billable too.
- Fixed price. Here the price for the development is agreed upon from the start of the development and is unchangeable to its end. Sounds like a great plan, doesn’t it? But in reality, neither you nor the development team can forecast all risks that may hinder the work. Also, you can lose some flexibility with the scope.
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MVP Cost: Components, Estimate Examples and Team Types
MVP price is a relative thing, that is constructed of different components. Here is a list of such components:
- Services (design, dev, Qa, etc);
- Platforms (mobile: Andr/iOS/ both, web);
- Product USV (unique sales value – in tech or service);
- Design complexity and number of iterations;
- Scope of product and number of user roles;
- Stakeholder maturity – how well does he know the market and domain?
- Third parties vs Custom development (Custom CMS or Admin panel will be higher in cost).
Estimate Examples
In my experience, I have had a client who wanted to develop a food delivery app. They had niche expertise and already had a list of restaurants ready for partnership. But the goal they wanted to achieve was to digitize business and expand.
Check out our app development cost calculator to get estimate for your app.
After market research and user interviews, our team came up with a list of features for the MVP version of the app. This was a food delivery app, where:
- Restaurants could upload their menus, see basic analytics;
- The client as a super admin can manage users;
- The client could create new restaurants;
- Users could order food;
- Monitor delivery status;
- Select payment method.
The average MVP price for a delivery app like this will be around $150,000 for 3,000 hours of work done. However, there are always details affecting the final price. Here is how the average price will be calculated for this type of web app development:
Yet, things can be a little different for mobile development, as it includes building an app for different platforms. For each mobile platform, it will take an additional $35k. For instance, you want to make a real estate app that would operate on three different platforms: web, iOS, and Android. So the single web platform will cost you approximately $30k plus $35k for each mobile platform individually. The final calculation will be approximately 100k.
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Conclusion
The price of MVP development depends on various factors like scope of work, a number of platforms, or integrations. For each app category there is an average market cost. However, to get the exact number of MVP development costs, you should address experts.
At Uptech, we always try to adapt the MVP feature list within your budget without compromising the quality. So if you want to know the price of your MVP, contact me, and together we will calculate the price of your product.