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How Much Does It Cost to Develop an MVP?

by Сodica 2 months ago in startup
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Discovering the precise cost of MVP creation is not a simple deal. The price will vary according to the many aspects, including the MVP features and your chosen agency.

The article was initially published in Codica blog.

Discovering the precise cost of MVP creation is not a simple deal. The price will vary according to the many aspects, including the MVP features and your chosen agency.

But how do you know what the right MVP creation price is? Read this article to know the cost range that enables the development of a functional web product.

What is an MVP?

An MVP or a minimum viable product is the first workable version of the web solution that has a key value and can be rolled out to the market.

Before launching a web product with many features, it is preferable to build an MVP.

Pros of testing your business idea with an MVP

Check your assumptions. You can launch an MVP to market and test it with real users.

  • Faster market launch. With the help of MVP, you can launch your product as quickly as possible.
  • Receive user feedback. The user feedback helps you understand what features your solution needs.
  • Optimize the resource use. The MVP includes only core features, so the development takes less money and time.
  • Fundraising. You can present an MVP to investors and get funds to build a fully functional product.

Famous examples of MVPs

Amazon

Jeff Bezos, the marketplace founder, started by testing his suggestions. He focused on a few categories: books, videos, and others.

You can apply his experience when creating your MVP. Growing the audience in one field is suitable for a startup. Thus, you can expand your business later by adding more categories.

Source: versionmuseum.com

Airbnb

Airbnb started in 2008. At that time, Brian Chesky and Joe Gebbia offered their apartment to the participants of the design conference in San Francisco. So, they verified the idea of renting out an apartment in a bed and breakfast format. Having checked the idea, they were able to demonstrate it to investors.

Source: quora.com

The proof of concept vs prototype vs MVP

MVP is often mistaken for a prototype or proof of concept. Let’s distinguish what the three approaches are.

Proof of concept is a preliminary outline and trial of a web product idea.

A prototype is a clickable draft that shows how the solution will work.

An MVP is an earlier version of a product with key functionality. The main difference between the above approaches and MVP is that only MVP can be launched to the market.

What are the components that form the MVP price?

Creating an MVP of high quality will cost you between $30,000 and $120,000. The MVP pricing depends on a few factors. Below we consider what they are.

Project’s scope

The features you include in the product determine how long it will take to create it and which resources will be needed for development.

You create an MVP to demonstrate your solution's main value. So, prioritize the features to be included.

Partner in development

In-house development team

The in-house team is located in your company. Indeed, you can make modifications to your project as needed very fast. Still, this option requires extra costs. Furthermore, you need to manage and adjust the product creation.

Freelance specialists

Freelance experts typically charge less than specialized agencies. Still, this benefit involves picking thoroughly as you want to hire a reliable professional.

If you hire a freelancer, be ready that the MVP creation price will vary depending on the expert’s hourly rate.

Specialized development agency

If your MVP requires high confidentiality, contact a specialized firm. These agencies have profound expertise in the specifics of the MVP development process.

To discover the expertise of a development firm, check testimonials on such review platforms as GoodFirms or Clutch. Furthermore, you can contact their previous clients.

Tech stack

The tech stack should help create a stable, lightweight, and secure solution that works across platforms and browsers.

Only the development partner will give the final MVP cost based on the technologies selected.

The hourly wage of a development partner

Location and expertise are the key factors that impact the hourly rate of a development partner.

Location

So, the cost of services given by the developers from various regions will differ. For instance, earning $50 per hour in Eastern Europe will be the same as making $250 per hour in the USA.

Expertise

Depending on years of working experience, developers are divided into three groups:

  • Senior,
  • Middle,
  • Junior.

A middle expert is an optimal selection regarding quality and expenditure ratio.

Another aspect is the developer’s specialization. Developers with specialization in a certain domain may take a higher hourly rate. This means extra spending.

Contract type

There are two most widespread options for signing the project terms with a web development partner. Let’s consider their pluses and minuses.

Fixed price contract

A fixed price contract is an agreement between the client and service provider for a specific amount.

The pros of such an agreement are clear payment sum flow and management transparency. Still, the client may overpay because such contracts comprise a 15% - 40% margin.

Time and material contract

This type of contract means paying for work according to the developer’s hourly rates. This model enables you and the team to make more changes during the development process than a fixed-price contract.

Stages of MVP development

There are development stages that ensure efficient work on the minimum viable product. These phases are the following:

  • Product discovery;
  • Prototyping and design;
  • Development;
  • QA (quality assurance);
  • Maintenance and support;
  • Scaling.

We follow them at Codica. Let’s see what these steps mean and what is the price range for each of them.

Product discovery stage: $1,800 - $3,600

The product discovery process is the preliminary check of your idea. This stage enables you to validate that your web solution will be in demand.

The development team researches the market background and an idea of the project.

After this stage is finished, the client gets documents of the project requirements, budget, and time.

Prototyping and design: $2,400 - $4,800

At this stage, a designer makes preparatory sketches of the MVP structure. These are wireframes.

When the development team and client agree on wireframes, the designer makes clickable presentations of the structure and flow of the minimum viable product. These are prototypes. They show how the product will work.

The designer shows prototypes to the client to agree on the positioning of buttons, fields, and menus.

MVP creation: $24,000 - $96,000

This phase suggests that all development team works on your MVP. Your development partner must use effective and up-to-date technologies.

The product development process should be open to the client.

QA and optimization: $4,800 - $19,200

To win users’ interest and attention, you should provide a product of the highest quality.

Quality assurance lets you test that your MVP works correctly and is convenient in use. This step also comprises code review.

Maintenance and support: $400 - $1,000

After the MVP has been created, maintain its good work. By the way, along with maintenance expenses, there are costs for third-party integrations and server costs.

Scaling (optional)

As more people use your solution, it will be necessary to add more functions.

The MVP needs to be scalable to make those modifications. Of course, your tech partner will tell you the precise cost regarding the functions you would like to add to your MVP.

Promotion (optional)

Well-considered MVP promotion will assist you in winning users’ attention. There are two most common types of marketing: inbound and outbound.

Inbound marketing comprises making and sharing exclusive content about your solution through blogs. In contrast, outbound marketing reaches goals through social media and advertising.

The costs for inbound marketing vary from $4,000 to 15,000 in a month. Notably, the survey states that inbound marketing requires less expensive than outbound marketing.

How much does it cost to develop an MVP?

Based on each stage of MVP creation, we defined the time and budget you needed. Creating a profitable minimum viable product will cost you from $33,400 to $124,600 and take from 850 to 3145 hours.

Summary

The price of creating an MVP varies between around $30,000 and $120,000. The cost depends on the scope of work, development phases, the type of contract, the type of the team, and their hourly rates.

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