MVP Development Cost (Breakdown Of How Much It Costs To Develop An MVP)

Imagine you've got a great idea for a product. You know it can solve a problem. But you need to figure out where to start. As you research, you discover that creating a minimum viable product to test your assumptions before launching can save you time and money. But you quickly become overwhelmed by the costs. You start searching for answers. There's a lot of information on MVP development out there. But you want to know how much an MVP will cost you. This blog will help you answer that question by breaking down the factors influencing MVP development costs.

At NUMI, we specialize in product design that helps startups and established businesses build exciting new products. Our approach to MVP development can help you uncover and reduce costs while building a solid foundation for your product design process.

What is an MVP?

A Minimum Viable Product (MVP) is just what it sounds like. It includes only the bare minimum functionality needed to bring a product to market. That is why, in recent years, the concept of a minimum lovable product (MLP) and pursuing customer lovability has emerged as a more holistic approach that contradicts an MVP. This guide covers the history of the MVP and its advantages and disadvantages.

The reported goal of the MVP is to accelerate learning in the early stages of product development with minimal investment of money and resources. However, the concept of an MVP can also be applied to existing products to understand whether a new feature set is valuable to customers.

The Role of MVPs in Validating Product Potential Quickly

An MVP typically asks, “What is the cheapest and fastest way we can start learning?” Creating an MVP allows companies to quickly determine whether a product has the potential to succeed, allowing them to make more informed decisions about when to persevere with an idea and when to abandon it.

The word minimum is essential. You need to deliver enough value that early customers want to use the product, can imagine what will be possible, and provide useful feedback for future product development.

And you can build various types of MVPs, like:

• Single-feature MVP: As the name implies, a single-feature MVP has only the main

feature of your product, and it’s one of the most common MVP types out there

• Pre-order MVP: a pre-order MVP is when you take pre-orders and crowdfund to generate a buzz before you build your product
• Concierge MVP: a concierge MVP looks and acts just like a regular app, but the back end is run manually by humans
• Fake door MVP: fake door MVPs are usually landing pages built to gauge market interest before building an MVP or prototype

Building an MVP is the best way to ensure your idea will succeed in your target market.

Examples of MVPs: The Proof is in the Pudding

The MVP isn’t just a testing ground or prototype that gets dismissed in the long run. Plenty of products and services on the market started as MVPs and expanded into institutions in their own right.

Amazon

In the early 90s, Jeff Bezos read that the e-commerce industry would be the next big venture in sales and took the opportunity to discover which markets would be most successful. He eventually landed on a bookstore as the minimum viable product, which he ran from his garage. 

The success of his bookstore led to the demand for other products, like electronics, clothing, and shoes. His first step using books as the MVP gave him the customer insight to take Amazon to the next level. Who would have thought that a small bookstore on a basic webpage would expand to the third-largest enterprise in the world in just 20 short years?

Spotify

In 2006, streaming services started and failed repeatedly due to limited and low-quality libraries, high subscription prices, and unstable streaming. Daniel Ek and Martin Lorentzon built Spotify as a landing page where they could test their streaming technology to beta users and fund it with on-page ad revenue. 

Their ultimate goal was to make playback fast and stable so they could convince music labels and investors of the product’s quality. Once they had passed market testing, Spotify and its subsequent app were released to the public, becoming the streaming behemoth we know today.

Dropbox

When Dropbox launched in 2008, cloud stage had been in use for a while, but small businesses were still getting up to speed. For their MVP, the founders of Dropbox created this video MVP explaining how their product worked.

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MVP Development Cost (Breakdown Of How Much It Costs To Develop An MVP)

The cost of developing a Minimum Viable Product (MVP) depends on multiple factors, including its complexity, the features required, and the development team's expertise. Here's a detailed breakdown of the typical expenses, categorized into key development stages:  

1. Product Discovery Phase: $4,000 - $8,000  

This is the foundation of MVP development, where the idea is refined and aligned with business objectives. During this phase: 

• Activities: Market research, user persona creation, brainstorming sessions, and requirement gathering.  
• Deliverables: A clear project vision, roadmap, and prioritized feature list.  
• Timeline: Typically takes 1-2 weeks. 

This step ensures that the MVP is designed to meet customer needs while aligning with your business goals.  

2. Prototyping and Design: $6,000 - $10,000  

The focus here is on creating wireframes and designing user-friendly interfaces.  

• Activities: UI/UX design, iterative feedback loops, and creation of interactive prototypes.  
• Deliverables: Visual designs that resonate with users and demonstrate the MVP’s core functionality.  
• Timeline: Generally requires 2-4 weeks. 
  

This stage helps stakeholders visualize the product and refine its user experience before moving to development.  

3. MVP Development: Starting at $30,000  

This is the most intensive and expensive phase, where the product is built.  

• Activities: Coding, integrating core features, and backend development using agile methodologies.  
• Deliverables: A functional MVP with only essential features to test the market.  
• Timeline: Typically spans 3-5 months. 
  

Costs vary depending on the project's complexity, the technology stack, and the development team's rates.  

4. Quality Assurance and Optimization: $8,000 - $12,000  

QA ensures the MVP is reliable, scalable, and user-friendly.  

• Activities: Testing across devices and environments, performance optimization, and bug resolution.  
• Deliverables: A polished MVP ready for launch.  
• Timeline: Usually takes 2-4 weeks. 
  

This phase is critical to ensure a smooth user experience and avoid negative feedback post-launch.  

5. Post-Launch Costs  

After the MVP is released, ongoing costs ensure it remains functional and scalable. These include:  

• Maintenance and Support ($400 - $1,000/month): Regular updates, bug fixes, and technical assistance.  
• Scaling (By Request): Infrastructure upgrades and feature expansions as user demand grows.  
• Marketing and Advertising (Custom): Promotional strategies to attract users, with costs depending on the campaign's scale and scope.  

Factors Influencing Costs  

• Development Team Location: Rates vary by region, with North American developers charging $100-$250/hour and developers in regions like India or Eastern Europe charging $20-$100/hour.  
• Technology Stack: Using open-source tools or low-code platforms can reduce costs.  
• Complexity of Features: A simple MVP with basic functionality will cost significantly less than one with advanced features.  

Total Estimated Costs  

• Minimum Range: $48,400 (basic MVP with minimal post-launch support).  
• Maximum Range: $60,000+ (complex MVP with advanced features and robust QA). 
  

This breakdown provides a comprehensive view of the cost structure and ensures transparency in budget allocation for MVP development.  

Hidden Costs in MVP Development  

In addition to the above factors, some costs associated with MVP design, development, and launch may surprise you. Be sure to control these costs where possible and factor them into your budget when unavoidable.  

• Scope Creep: As designers and developers work on a project, it may be tempting to start adding new features, expanding the scope of the original vision. Successful MVP development means monitoring scope creep and learning to say “no” to keep the scope of work in check.  
• Regulatory Compliance: Adhering to regulations specific to certain industries and regions can raise the budget, but ignoring them could sink your company. When determining your budget, explore all potential regulatory hurdles (e.g., GDPR for data, HIPAA for U.S. healthcare).  
• Security Concerns: Security is vital when building an MVP, especially if handling customer data or conducting transactions. Be sure to factor security into your initial costs.  
• Marketing: Marketing may be an important part of your launch strategy, so factor in those costs. 
  

If you have doubts about whether you’ll incur these costs or how to mitigate them, consult an experienced development team before finalizing your budget.  

7 Factors Influencing The MVP Development Cost

1. Complexity and Number of Features: Core Functionality is Key

The most critical factor determining the price of software development, particularly MVP app development, is the product’s complexity and number of features. Since MVPs are relegated to core features, they will cost less than a similar full-fledged product with a wide range of features. 

On a fundamental level, product complexity is tied to things like the number of screens a user will encounter (since each screen requires labor) along with each feature’s front-end and back-end requirements. Since each feature takes time and labor to design and build, a budget-conscious app only includes what’s necessary to validate an idea and gather feedback. 

2. Choice of Technology Stack: Getting It Right the First Time is Critical

The technology stack you choose initially is not only a key factor in determining initial costs, but it will impact future costs as you scale. That’s why choosing the right tech stack for your project is essential. A few factors to consider when it comes to choosing your tech stack are: 

• Your tech team’s experience working with the technology you choose
• Maintenance requirements for your tech stack
• Your tech stack’s scalability
• Your product’s tech requirements (based on size and complexity)
• Security requirements. 

If you’re not sure which tech stack to choose, don’t be afraid to consult outside resources. Even if you have a large in-house development team on staff, it never hurts to get an outside opinion on your tech requirements. Getting it right the first time is important because changing your tech stack late in the game can be time-consuming and expensive. 

3. UI and UX Design Complexity: Aim for Simple But Effective

The User Interface (UI) design for MVPs is relatively simple but should still be clean, attractive, and effective. The idea is that users intuitively understand what they need to do to accomplish their aims. The UI feeds into the MVP User Experience (UX), which should incorporate best practices so users have a pleasant, hassle-free experience using the product. 

Creating a UI and UX for your MVP means testing design concepts with your target audience and using prototypes before building the product. That will give you a sense of what works and needs to change. Certain circumstances require a more complex UI and UX to make your product viable. Some products are more complicated than others and may require a more sophisticated interface, which naturally demands a more sophisticated UX design. The trick is to make it as simple as possible without impacting core functionality and ease of use. That will allow you to validate your idea and gather meaningful user feedback. 

4. Composition and Location of the Development Team: Who Will Build Your MVP?

Are you planning to build an in-house team that handles product development from start to finish (including business analysts, UX researchers, project managers, and more)? Are you thinking of hiring freelancers? Are you considering outsourcing part or all of the project to a full-service software development company? All these factors will impact your costs to design, build, launch, and test your MVP. 

5. Timeline: The Sooner You Launch, the Better

A straightforward MVP can often be ready for launch within a month or two, but the degree of complexity will naturally impact the timeline. If you’re looking to expedite the process, many software development firms can make that happen, but it will naturally increase the costs. 

Why does reducing the timeframe increase cost estimates? You’ll need more resources to expedite the:

• Development process
• Designers
• Rapid market research
• Developers
• Tester
• Project managers' oversight

The good news is that if you have strategic reasons to shorten the development time, many companies that offer MVP development services can help. 

6. Integration Requirements: More Complex Integrations Increase Costs

Will your MVP require complex integrations with external apps or third-party services? If so, that will likely increase app development costs. Your development team will probably need to build APIs, engage in data mapping, and perform other tasks to ensure that everything works seamlessly and that the app meets minimal user expectations. 

7. Scalability and Performance Requirements: High Traffic Will Impact Your Costs

Some MVPs don’t have massive performance requirements since entrepreneurs sometimes test the first version of their product on a small number of users, as Uber did with its initial app idea. For its MVP, Uber used an invite code that users could share with their friends, ensuring they only needed to handle a small number of requests initially. 

Other MVPs are made available to the public immediately, which means their user base might scale quickly. These apps have higher performance requirements for handling the potentially large influx of traffic, which means they may require a different tech stack. It naturally follows that the higher the scalability and performance requirements you’ve got, the more it will impact the cost of building your MVP. 

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6 Best Tips To Reduce The MVP Development Cost

1. Leverage Low-Code/No-Code Platforms

Low-code and no-code platforms allow startups to create functional MVPs with minimal programming knowledge. These tools speed up development and reduce costs significantly by eliminating the need for a large development team. Platforms like Bubble, OutSystems, or Mendix can enable quick prototyping and iterative development, helping you validate ideas faster without breaking the bank.  

2. Utilize Open-Source Libraries and Frameworks

Open-source libraries and frameworks are freely available and can greatly accelerate development while cutting costs. Tools like Flutter and React Native are excellent for creating cross-platform mobile applications, delivering native-like experiences for iOS and Android with a single codebase. This approach reduces time-to-market and development costs while maintaining a robust and engaging user experience.

3. Adopt Cloud-Based Development

Cloud platforms like AWS and Azure are cost-effective alternatives to purchasing expensive hardware and setting up on-premise infrastructure. Cloud-based solutions offer scalability and flexibility, ensuring your MVP can handle increasing user demands as your audience grows without requiring significant upfront investments in servers or software.

4. Outsource MVP Development

Outsourcing development to regions with lower labor costs is a proven way to save money. While North American developers may charge $100-$250 per hour, highly skilled developers in countries like India or Eastern Europe charge between $20-$100 per hour. 

Outsourcing reduces hourly costs and eliminates expenses related to hiring, training, and maintaining an in-house team, such as infrastructure and employee benefits. According to a Deloitte study, 63% of companies consider outsourcing a powerful cost-cutting measure.

5. Collaborate with a Skilled MVP Development Team

Working with an experienced development team can streamline the process, reduce risks, and ensure efficient resource allocation. Teams familiar with agile methodologies, such as:

• Scrum
• Can adapt quickly to changes
• Deliver iterative feedback
• Identify issues early

Look for teams offering flexible engagement models, like hiring dedicated developers or opting for a time-and-materials approach to align costs with your project needs.

6. Focus on the Essentials

Focusing only on the core features necessary to validate your idea and avoiding adding complex functionalities that aren’t critical for initial testing will keep your MVP lean. This disciplined approach will save time and resources while ensuring that you launch a streamlined and impactful product.

Why is it Important to Budget Your MVP Development?

Creating a detailed budget for developing your MVP helps you allocate resources appropriately. The organized approach allows you to prioritize essential features and activities so your critical tasks receive the attention and funding they need to succeed. This process ensures your product can launch and meet its intended purpose.

Clear Expectations: The MVP Budgeting Advantage

Establishing a budget sets realistic expectations for all stakeholders involved, including team members, investors, and clients. Transparent cost estimation builds trust and helps prevent misunderstandings later in the project. When everyone is aware of the financial constraints, it fosters collaboration and accountability.

Risk Mitigation: How Budgeting Reduces MVP Development Risks

Anticipating financial concerns through careful budgeting allows you to identify potential issues early on. This proactive approach can decrease the likelihood of project delays and failures by enabling you to address challenges before they escalate. Having a contingency plan within your budget can further safeguard against unforeseen expenses.

Scalability Planning: Future-Proofing Your MVP Budget

A precise budget not only supports the initial development of the MVP but also lays the groundwork for future scaling and expansion. By understanding your financial limits, you can make informed decisions about how to grow your product post-launch, ensuring that you have the resources needed to adapt to market demands.

Strategic Decision-Making: The MVP Budgeting Process

Budgeting encourages thoughtful decision-making regarding technology choices, development methodologies, and feature prioritization based on cost-effectiveness and potential return on investment. A limited budget forces you to evaluate options critically, maximizing value while minimizing unnecessary expenses.

Financial Stability: How an MVP Budget Helps Maintain Cash Flow

Creating a comprehensive budget ensures financial stability throughout the development process. It helps prevent overspending or running out of funds mid-project, which can jeopardize your MVP's success. A structured budget provides a clear financial roadmap aligning with your business strategy.

Planning for Hidden Costs: The Importance of MVP Budgeting

Many projects encounter hidden costs that can derail budgets if not anticipated. By budgeting for these potential expenses, such as:

• App store fees
• Legal costs
• Marketing expenses 

It is often recommended that you set aside around 20% of your total budget for unforeseen costs to avoid surprises that could impact your project's viability.

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