Work on a minimum viable product (MVP) goes through the same software development life cycle as a full-blooded product, but it’s developed much quicker, and its go-to-market is shorter.
First of all, the MVP cost depends on a business task a business owner wants to solve. And the features, in their turn, subject to execution logic. As many non-core features are set aside for implementation, the price of an MVP is naturally lower. In our practice, MVP app cost starts with $19,000 for more or less simple functionality up to $50,000 for pretty complex core features. Additional features are added as the product evolves.
Secondly, it much depends on how you decided to implement your idea:
- employ a developer
- contract a freelancer
- outsource MVP to a custom software development company
The in-house development team is the right choice for a mid-sized stable company that can afford such an expensive unit. For a startup, for example, it’s a costly decision, especially when a development team works for a share. Moreover, there may ocсur employee dismissal or errors in assessing the competencies of the staff. To contract a freelancer is one more accessible way to build a minimum viable product. As a rule, 1 freelance developer is cheaper than having an in-house team or outsourcing development to a specialized company. But often you’ll need to find not only a programmer but also a designer, a QA, a business analyst, which makes the whole picture not so attractive. Besides, there is a risk of NDA violation by a freelancer, part-time work, and combination with other projects, downtime, etc. In the case of an outsourcing company, the risks include the lack of quality guarantee, budget mismanagement, lack of transfer of rights to the product.
So, in MVP development cost evaluation, it’s essential to find the best quality for the lower price and (and it’s pretty important!) the guarantee. So, it’s highly recommended to find a reliable outsourcing company that carries out development services for startups. The vendor must provide a guarantee period for the developed MVP, NDA, and rights transfer agreement for you to know your rights are reserved.
So, how much does it cost to build an MVP? You can use the comparison table after contacting the vendors or evaluate the labor costs in the case of a full-time team member. Frequently, the cost will vary much depending on:
- the number and complexity of MVP features, which was mentioned in the very beginning
- the region of outsourcing and team qualification
- technological stack you want
- contract type
How Much Does an MVP Cost in Different Outsourcing Regions?
Regions of outsourcing go in the following order by the increase in the minimum price per hour for an employee: Asia, Eastern Europe, Latin America, US. On the diagram, you can see hourly rates in $ of different specialists and how they differ by region.
The region of Eastern Europe is considered to be the best combination of price and quality of development. Let’s calculate the cost of MVP development outsourced to eastern Europe. Let’s estimate as an example working hours for an MVP as BA – 120 hrs, Designer – 150 hrs, Mid-level developer – 450, Mid-level QA – 120 hrs, which makes up 40*120+35*150+35*450+30*120=29 400 USD.
Dice published a US Tech Salary Report for the year 2018. From it, top 10 the highest-paid programming and scripting languages in 2018, descending per month:
- Golang ($11069)
- Perl ($9224)
- Shell ($9127)
- Java/J2EE ($8763)
- TypeScript f ($8640)
- Python ($8632)
- Ruby ($8632)
- Swift ($8469)
- C# ($8463).
To decrease the costs, one may strive to replace more expensive technologies with similar ones but requiring lower development budgets.
Also, there is one more option not to build user interfaces from scratch but use ready-made components. Many of them are specific solutions to the application solving certain tasks. If the application contains, for example, a scheduler, then the component does not need to be developed. There are many examples of such systems – booking systems for hotels, medical centers, logistics platforms, and many more. This approach significantly reduces the MVP cost. A scheduler component, for instance, you can find by DHTMLX, DayPilot, Bryntum, and others.
One should also remember that to build a minimum viable product will cost differently depending on the contact type. At XB Software, there are 3 main contract types. They are Fixed Price, Time & Materials, and Budget With Float Scope. In practice, Budget With Float Scope gives the best development savings for MVP. Then go Time & Materials and Fixed Price, respectively. The 3 contract types are observed thoroughly in this article. Still, some words must be added about the most efficient contract type that allows to reduce and control MVP app development cost.
Budget With Float Scope gives an opportunity to the client to develop an MVP that fulfills essential business tasks. And the cost to develop an MVP is guaranteed within the budget. It’s the client who voices the budget, and it’s the vendor who puts the necessary features into the budget. Parties agree that the price won’t be exceeded if there will be no additional functionality requests from the client. Building MVP for startups with Budget With Float Scope (BFS) is possible due to the fact that XB Software offers 3 different packages. In one of them, Go!, you’ll find the offer to develop an MVP for $19,000. Such a competitive offer became possible thanks to experience in working with startups, understanding their needs, professional project managers, and own products that accelerate development.
The price of an MVP development may significantly vary depending on such factors as the number and complexity of MVP features, the region of outsourcing and team qualification, technological stack, and contract type. It’s quite challenging to predict, but it’s possible to control via Budget With Float Scop contract type and special packages for startups.
If you’re interested in learning if startup development packages suit your business idea, get a free consultation of XB Software professionals.