Every day, every hour, and maybe even this second, someone in the world comes up with a new startup to capture the market, attract users, bring value, and find success. We have no idea how many ideas are born in people’s heads and how many never materialize and go unnoticed. So why does this happen? There are no formulas for success; each new business formation is an entirely new case with unexpected twists and turns. In that case, the best thing you can do is to prepare the ground with the already known ways, and creating an MVP is one of them. Nevertheless, at this stage, many people encounter failures due to improper strategy selection, budget calculation, etc. In this article, you’ll learn how to build a successful MVP and how much this service will cost in 2023.

What is MVP & its essential functions?

MVP is a minimally viable product. It is the initial version of the application you want to show the world. It has only the critical features of an IT product, which should show the uniqueness of your idea and how it differs from your competitors. The primary purpose of the MVP is to gauge the public’s reaction to your proposal. It collects feedback and evaluations, based on which you can improve and ultimately achieve your target audience. The MVP is a test of user behavior; your MVP will generally not bring any reaction from the outside, indicating that your idea needs to be adjusted. However, it’s still better than spending an incredible amount on a full-fledged mobile app only to find out later that no one is interested. A startup is about learning from mistakes, stepping up, and changing your strategy and approach because only such cases are appreciated.

So, why does your startup already fail at building an MVP stage? There are several specific reasons for this. Below we list some of them:

Inadequate staffing
Inability to get in front of your competitors
Lack of a suitable business model
Inadequate development of marketing strategies
And last but not least, you could run out of budget

Of course, it is impossible to calculate how much does MVP cost to the last penny. Nevertheless, you can plan your budget in a range from minimum to maximum amount while choosing one or another action because the cost to build an app varies from many factors.

What does the cost of developing an MVP depend on: Top Reasons

To say what does it cost to build an app to a penny is very difficult, as many factors influence the final development price. Below we’ll highlight the most decisive of them.

Type of Product

One of the most challenging decisions for potential IT product owners is the choice of product type. What platform and programming language will form the basis of your application? Everyone wants to reach as broad an audience as possible, which also hits the budget hard. Fortunately, there is a way out of this dilemma – React Native. It’s a cross-platform framework that allows you to reuse almost all the code, and it takes much less time and money to develop an application for iOS and Android.

UI/UX design

The design also plays a vital role in MVP investments, as app owners want to make their apps as user-friendly as possible while keeping up with current trends. Nevertheless, it is essential to remember that you only need a minimal set of features to develop an MVP investment. App design is created in three stages:

Preparation – meeting and making a plan with designers
Prototyping – creating a general design shell, including essential functions
Creation of visuals – at this stage, color gamma, fonts, and animations are added to the design. This is very important because, later on, this is what will differentiate you in a competitive market

The fewer features and gimmicks you want to include in your design, the less it will cost. But no one wants to make it too empty, so you should clearly define what key features and animations you want to see in your MVP at the preparation stage.

Type of development team: in-house or outsourced

In-house development implies that you already have an established IT department with formally settled employees with enough knowledge and experience to work on the MVP. However, this option is often not a priority because maintaining an entire IT department is expensive. So what should startups or other companies that can’t afford to budget for such expenses do? The answer is to hire outsourced professionals who will work with you for a certain period. You are not responsible for their sick pay, vacation pay, or providing them with the tools they need. In addition, you can adjust the cost of outsourcing services depending on the region you choose. For example, hiring an outsourcing team in America will cost you more than outsourcing from Eastern Europe. This is due to the difference in living standards in different parts of the globe, so you can find qualified specialists for a much lower fee this way.

Thus, for a development team in Asia and Eastern Europe, the optimal price for a job per hour is between $20 and $50, while developers in the United States charge from $200 per hour.

Centum-D offers outsourcing services for any task, including MVP development. Our specialists work responsibly and qualitatively, always guided by the client’s wishes.

Number of functions and their complexity

Often during the development of your idea, we get more and more pictures that we want to implement. However, as we have already determined, the fewer functions in your MVP, the cheaper it will cost. You should divide the features you want into the essential parts you can do without, the extra features, and the ones you don’t. This way, you can gradually introduce other features at a later integration and now focus on what is more important.

Global goals are great and necessary, but not at the beginning of the journey; now, it is more critical for you to take the first step and get user feedback – then a chain reaction will start.

Why do you need an MVP, and how do you build it successfully?

Many people are mistaken in their conclusions about the purpose of building an MVP. They assume a minimally viable product is only needed to accelerate the company’s market entry. But the real meaning of an MVP is to test the economic viability of their project. Today, about 2/3 of startups fail in their ventures for some reason, but if you take MVP for startups wisely, you significantly increase your chances of success. A minimally viable product carries business benefits such as:

A better consumer research – knowing the opinion of the environment, you can build a more relevant app that is sure to be in demand
Attract investors – MVP will help interested parties to evaluate the project as it is, not just on paper and in theory. Potential investors will be able to better assess your potential with it and thus help you with your financial problems
Reducing the cost of development of the final product – by planning the MVP properly, you can easily navigate implementing additional features in your final product. This way, the development process will go much faster, reducing costs and shortening the time to market for your product

Once we are convinced of the value of a minimum viable product for business, another question arises: how to build an MVP to make it successful? There are several steps to follow:

First, do some preliminary preparation

The preliminary preparation consists of market research and analysis and your actions. You have to make sure that your MVP solves some actual problem in the market, and therefore it will be in demand. Answer yourself the question, why use your application? Who will benefit from it? Also, don’t forget to watch your competitors and how they produce their MVP.

Second, define a list of features

Your IT team will help you define the key features, but you should also think about the desired components of your IT product. Remember, when you build an MVP do not overload it, you do not need to run complex frameworks right away, do it gradually.

Third, analyze the feedback

Create surveys, and ask users to evaluate your application. Your first users will serve as your testers. You can use your feedback to your advantage, whether good or bad.

How to reduce the cost of creating an MVP?

The cheaper – the better, and the money you save can be reinvested in further app development. So, how can you save money on developing a minimum viable product?

Basic design – indeed, your strategy needs to be distinctive, but this can be done in several iterations as your project thrives
Use third-party modules – this involves using pre-built modules instead of coding them from scratch
Consider the number of users – Since MVP is a new, previously unknown product, the number of users who will want to use it will be pretty limited – and this is not a bad thing, on the contrary. Backend development is costly for entrepreneurs, but if you are counting on a smaller number of users, the server part of the application will be simpler and less expensive
Prefer more experienced professionals – junior developers, of course, charge less for their work. Still, professionals work faster and help you get your MVP to market more quickly with fewer working hours

Little tricks like these can save you a tidy sum in the end. Save money where you can, but not when it comes to the expertise and professionalism of your IT team.

The best examples of MVP applications

Many entrepreneurs must have heard more than one compelling story of how a company could transform a simple MVP application with millions of users and millions of dollars in sales. The stories of creating these MVPs will help you better understand the purpose and principle of a minimally viable product, so below, we’ve highlighted the most striking examples of MVPs.

Amazon

The owner of Amazon started the development of MVP with a market analysis. As a niche for further sales, he chose several product categories, such as CDs, books, videos, etc. The highest turnover came from books, the fulcrum for further development.

Airbnb

The owners of Airbnb tested the idea of a bed-and-breakfast in their apartment and then presented the idea to investors, gaining $600,000 for their further development.

Spotify

The owners of Spotify came up with the idea of creating a free app to listen to music and generate revenue through advertising. Still, before the idea came to fruition, an MVP was launched in testing, which proved that people were willing to buy paid subscriptions to listen to music without advertising.

Conclusion

An MVP is a great way to test your idea, raise capital, and save time and money. Creating an MVP is good practice for startups and established companies alike. It will give you an idea of where to go next, and along with a rough understanding of pricing for creating a minimum viable product, you will be able to better plan your budget and cut costs.

Why develop an MVP, and how to do it successfully? How much does it cost in 2023?

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