MVP Development Cost in 2022

MVP Development Cost in 2022

Are you trying to make your ideas come to life but don’t know where or how to start? Does the MVP development cost bother you because you don’t know how much money you need? Luckily, we’ve got all the answers!

In this article, we will go through various stages like what is MVP, what are MVP development costs, different ways of development, examples of the best MVPs, and a custom real-life MVP scenario where we estimated and broke down the costs of a hypothetical MVP. Without further ado, let’s get started.

What is MVP?

“The Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” – Eric Ries

But what does it mean?

MVP or Minimum Viable Product is a working version of your application that meets the minimal requirements, i.e., features functionalities that allow the product to meet its predefined expectations. In simple terms — the MVP is the simplest working app. By developing the MVP, the team can gather necessary feedback and implement changes if needed. If you plan on outsourcing the MVP development to Poland, the costs would most likely oscillate between $18,800 – $23,000 USD, both development and design included.

Now, back to the MVP itself.

The term MVP was first introduced in 2001 by Frank Robinson (the co-creator of SyncDev), followed by Eric Ries and Steve Blank, who made it even more popular. Speaking of SyncDev, their definition of the MVP can be divided into two: a problem and a solution.

  • A problem — too many features that don’t necessarily make the product better but influence the time of the development and in some cases make it less efficient.
  • A solution — a product of the right size with enough basic features for the client to feel satisfied. They once even said: “Technically, it is the product with maximum ROI divided by risk”.

On the other hand, let’s now see what Mr. Ries himself had to say about building the MVP:

What’s worth mentioning is that MVP is a core Lean Startup component, which essentially makes development cycles shorter and more effective (if executed correctly).


But what is a Lean Startup? To put it simply, it is a methodology of startup management that allows companies to deliver products in a quick and efficient manner. What’s more, it originally applied to companies in Japan and it was all about getting to know the difference between what brings value to a company and what can go to waste.

MVP Alternatives

Minimum Loveable Product

MLP, also known as the Minimum Lovable Product, is a famous alternative to the subject of this article — the MVP.

In 2013, the Minimum Lovable Product was first mentioned by Brian Haaff. It essentially serves the purpose of an MVP counterpoint where instead of focusing on the minimum working functionalities, developers pay attention to features that will make users fall for the product right away!

So what differentiates MLP from MVP? It’s actually pretty simple! The key difference is to think of your potential customers and answer certain questions. What features would they love the most? What functionalities will make them happy and their work easier?

Once you do that, you’ll be able to develop an application that your customers will most likely fall in love with!

Minimum Awesome Product

Since we mentioned the Lean Startup methodology before, we shouldn’t omit the MAP (Minimum Awesome Product) as it’s one of its concepts. The definition of a MAP is quite simple — it is an MVP with features that can amaze your customers.

It may seem like a Minimum Viable Product, but in reality, it has some tweaks that go slightly beyond your standard definition. So how do you make MVP amazing? Well, you can make it faster and smoother, and include a top-notch, catchy design. After all, a crisp user interface has a great influence on people. If you manage to create a “wow” experience for your customers, you can be sure that they will keep coming back.

In fact, let’s take a look at the MVP vs MLP vs MAP comparison:

 MVP vs MLP vs MAP Comparison
MVP Development Cost – MVP vs MLP vs MAP

Now that we’ve quickly explained what an MVP is, let’s shift our focus to different reasons why developing the Minimum Viable Product is important.

5 Reasons for Building the MVP

Developing the Minimum Viable Product is not something that’s unjustified as there are valid reasons behind it. Let’s take a look at them.

Feedback

Feedback is one of the most important factors in developing the MVP. Thanks to it, developers can gather valuable information about feelings and thoughts on the product. The gathered user feedback can help developers understand which parts of the product were among the most popular ones or which ones required a revamp.

Saving Money

Building an MVP may save you quite a lot of money and time. Why? Well, the answer is pretty straightforward. Instead of developing a full-fledged application and dedicating huge amounts of resources, you can build the MVP and test your vision. Will people like what they see? Will they use the app? What features will they find the most useful? These questions will be answered and you’ll see whether your product development is going in the right direction or maybe it requires a change.

Attracting Investors

By developing and showing off the completed MVP, you can attract potential investors and stakeholders. Presenting your product, its features, functionalities, the user feedback, and how the application performs, may turn out to be game-changing when it comes to finances.

Time for Further Development

Releasing the Minimum Viable Product can greatly influence the development of the final application. By developing the minimum version with basic functionalities, you’ll be able to assess what features may be lacking or which ones require more work. After receiving the already mentioned feedback, you’ll still have plenty of time for updates and further development.

Reduced Time-to-Market Rate

Time-to-market is a period of time between creating a product concept and its release to a wide audience.

Thanks to releasing a working product as soon as possible, you get an early chance of showing the application to users sooner than later. So why is it so important when it comes to MVP? It’s because the sooner you release the product, the faster you’ll be able to attract potential investors, gather feedback, and you’ll still have time to improve its features if necessary.

Verifying The Idea

Verifying the idea is a significant factor in the whole process. Thanks to it, you can not only see if your vision makes sense, but you can also check whether there’s a market demand for such services or not.

If your idea works well, then you’ll have a clear answer, and the decision to continue the development will be only yours to make.

MVP Development – Which Way to Choose?

“Try and find places where you have an area of responsibility that you can hand over to somebody else. Because the fact that you’re already struggling to do it means you know what the job requires and why it’s hard, so you’re more likely to hire somebody good (…).” – Eric Ries

Choosing the right way of developing the Minimum Viable Product may be quite difficult as there are various ways of doing so. Outsourcing, in-house team, or even freelancers, which of these should you choose? Let’s find the answers together.

Outsourcing

Software development outsourcing is one of the most popular and at the same time effective methods of getting the job done, so to speak. By letting the outside team handle the production of your application, you can actually gain some serious benefits and lower the MVP development cost.

Before we head to the pros and cons of outsourcing, let’s quickly list the options. If you decide to outsource your project, you can choose from different software development outsourcing models, such as:

  • Staff augmentation — an efficient IT outsourcing model where an outsourcing partner provides you with remote employees to join your team. The development risk and ownership lie on you, i.e., the client as you need to manage the team and the project yourself.
  • Team-based (dedicated team model) — instead of getting a number of employees, you hire an entire team that’s already experienced in working with different projects and with themselves. What’s more, you are a vital part of the team, with the risk and ownership being shared between you and the hired team.
  • Project-based — in this model, you assign a single project to the outsourced team. Compared to the other two, this model features the highest risk as you do not take part in the development.

There are also two outsourcing pricing models:

  • Time and materials — for companies with a vision for their product who may want to make changes during the development process. The main benefit of this model is its flexibility as it features fewer audits and is less specific, which results in faster development.
  • Fixed price — for those with a clear vision of the product who already have a fixed budget for the product. Additionally, you have to allocate a money buffer in case additional tweaks are needed, resulting in more money needed for the entire development.

Right, now that we’ve gotten the outsourcing models out of the way, we can focus on the pros and cons of such a solution.

Pros

Less Costs

First and foremost, outsourcing software development can save you quite a lot of money, especially when comparing off-shore to on-shore outsourcing. Let’s take a look at the pricing examples of two huge IT markets.

In North America, it’s pretty pricey as the average hourly rate for a software developer is approx. $50, whereas in Poland, for example, it oscillates just around $18. In fact, let’s see the comparison.

Average Software Developer Rates
MVP Development Cost in 2022 – Software Developers’ Average Rates
Highly-Skilled Professionals at Hand

Next up, you can rest assured that the outsourced software development team will consist of highly-skilled professionals. What’s more, you get rid of the need for training, onboarding, or recruitment.

Nowadays, most developers use the newest technologies and are familiar with a lot of already existing software. If you carefully scout the market in search of the best custom software development company, you’re not only going to cut expenses, but also have a world-class product. It really takes the weight off your shoulders and makes development much less stressful. It’s the best option for those who do not have the needed experience for recruiting their own in-house or freelance team.

Different Models to Choose From

By choosing outsourcing, you can save both time and money. How? It’s pretty simple! You save time and money simultaneously by not conducting an entire recruitment process. Instead, you find a reliable software company that ticks all the boxes. That can result in faster delivery of the product since you don’t waste time and resources on the recruitment.

Experience

If you decide on hiring an outsourced team, you most likely won’t be disappointed. The developers are already an experienced team that works with mobile app development, web development, and plenty of other projects. The experience will only result in an increased chance that your idea will come to life and succeed on the market! Later, you can create a creative billboard design and show your brand off-line as well.

Cons

Communication Issues

When it comes to outsourcing, there are some issues that may influence MVP development. One such example could be problems with communication if you decide on off-shore outsourcing. However, most companies do require English nowadays, so that issue has essentially solved itself. In fact, Poland ranks 16th on the English Proficiency Index.

There’s also one more factor that needs to be addressed and it’s the time zone difference. Outsourcing to Europe, for example, will require you and the outsourced team to adjust your schedules to conduct meetings at hours that suit you both. However, in an era where we are surrounded by electrical appliances and we are constantly connected to the web, it shouldn’t be a problem. What’s more, taking into consideration all the pros of Eastern Europe and its time zone, it makes a great compromise between the US, Europe, and Asia.

With a little bit of goodwill, both sides can easily find slots in their calendars to meet and discuss any subject. As a matter of fact, we at MPC, have already worked with many companies from North America and we have successfully delivered polished products to our partners (SHANE, BoredTeachers, Placester, and more).

Cultural Differences

Yet another factor that might influence MVP development are cultural differences. However, it’s more of a holiday, habit, and cultural issue. We all know that different holidays happen in various cultures all around the world. Different break times and their length, the working etiquette, various ways of solving problems, it can all differ from one culture to another. The question is — how to deal with such issues?

Firstly, diplomacy is always a good solution, so talk, talk, and talk. Find a team that understands the importance of good communication and efficiency and talk everything through beforehand.

Secondly, for companies located in the United States, outsourcing software development to CEE countries could potentially be a win-win situation due to the similarity of cultures.

Most of the available software development companies out there know that in order to provide a great service, they must adjust to their client’s needs. Interestingly enough, developers from a different country may bring a new wave of fresh ideas to the project, so is it really a downside?

Less Control

Many people claim that by choosing outsourcing you lose control over your product. Is it really true? Well, partially.

We understand that some people may feel that way. That’s why it’s important to eliminate such feelings by having weekly or daily meetings. By doing so, you can not only see the entire development process, but you can also interact and influence the process by giving feedback and advice. After all, it’s your idea and the outsourced team is there to make it a reality.

In addition to already mentioned meetings and for the client’s convenience, MPC teams create dedicated channels on Slack to allow direct and instant communication with any member of the remote outsourced team.

In-House Team

Having your own in-house team can certainly have some benefits. But does it mean that it features only the upsides? Not a chance. That being said, let’s focus on both the pros and cons of having an in-house development team.

Pros

Direct Management

By having an in-house team in your office, you can directly manage the team members, without the need for remote meetings, etc. And it’s not just for one project. The entire team is there to stay, so you also have to take that into account. An in-house development team is recommended for those who can sustain having one and who can assign more work once the desired project is done and over with.

However, due to the pandemic, the work environment has changed, with more and more companies allowing remote work for their employees. That being said, in 2021, 42% of companies around the world allowed a hybrid model where some parts of the team worked in the office, whereas the others — remotely. Now, let’s compare it to 2020, where 37% of companies allowed for that model. We can clearly see that day by day, more companies are letting their employees work at home, which slowly but steadily blurs the line between in-house teams and outsourcing.

Dedication and Motivation

Since the members of the team are already a part of your company, you most likely know each other pretty well — at least on the professional level. This can eliminate the need for explaining your company’s values, goals, etc. Problems start to emerge when you don’t have the team yet, which brings us to…

Cons

Costs

Having an in-house development team is not all that great when you take a look at costs. Starting from conducting the recruitment process, through all interviews, onboardings, adjusting, and training — it all can sum up to huge amounts of money, resulting in the higher MVP development cost. For your convenience, let’s dissect the expenses:

Time-Consuming

As previously mentioned, setting up an in-house development team can actually take up a lot of time. The recruitment process alone usually takes up a couple of weeks, let alone onboarding and getting to know the company. And even if you decide on forming a team, the contract termination of some potential candidates can take months, which additionally prolongs the recruitment. On the other hand, the in-house team falls short when it comes to time spent on the entire process, which whether we want it or not, benefits the outsourcing method.

Freelancer

Hiring freelancers may seem like a great idea. After all, this solution seems cheaper than the other two. Judging by that fact alone, many companies may feel drawn to such a solution. However, in this paragraph, we are going to dive into the subject and explain why it may or may not be the best solution for you.

Pros

Costs

When it comes to the costs of hiring a team consisting of freelancers, it indeed might be cheaper than an in-house development team or the outsourced one, but does it mean that it’s better?

When we take into consideration the costs of hiring a freelance software developer (starting from just $15), we can clearly see that money-wise, it’s a great investment, compared to the other two.

Availability

With plenty of websites available on the market where freelancers can acquire clients (like Upwork or Fiverr), it’s really easy to find one that meets your needs.

Cons

Quality

The main issue that may arise when it comes to freelancers is their quality of work. What we mean by that is that a freelancer most likely works on more projects than just yours. Furthermore, it’s much harder to verify the experience of a freelancer. They may also drop your project or be unavailable at times (for any reason like sickness or vacation). And that may, unfortunately, create problems.

Whether it’s an in-house team or outsourced, people from both of them are dedicated to your project. As you can see, that’s not the case here. Of course, such a thing may as well happen with a freelancer, but chances for that are relatively low.

Control

Working with a freelancer can result in less control over what they do. When it comes to an in-house team, it’s pretty much self-explanatory as you work closely. Outsourcing? Well, pretty similar to an in-house one but you’re working with a remote outsourced team. As we mentioned before, it can all be managed to your benefit. But hiring a freelancer can, but not necessarily mean, one thing — trouble.

And by trouble, we mean the lack of control over what they actually do. It may be harder to reach a freelancer than to, for example, have daily meetings with your outsourced team. Moreover, freelancers are not subjected to any structures and processes, which may but not necessarily will result in chaotic development.

Stages of MVP Development

Similar to many other things, MVP also has different stages of development. In this paragraph, we’ll focus on that aspect.

Stage 1 — Meeting

The first step is rather obvious. Both the client and the team responsible for the MVP should meet and discuss the vision thoroughly before proceeding with anything else. Learning the idea, problems, challenges, expectations, and getting to know each other is a step that cannot simply be omitted.

And that’s just how MPC’s discovery workshops are. Thanks to them, our team can understand your business goals, initial budget, core features, and timeframes. There are also other subjects that need to be discussed, such as market research, competitors (along with their pros and cons), target audience, and more.

If you don’t have a budget large enough and the MVP development cost scares you, then maybe working out a proof of concept to attract potential investors could be a good solution. 

Stage 2 — Planning

In stage 2, we’re going to shift our focus from meeting to planning. It is the most crucial step for the entire MVP development process as it’ll tell you how and when you should start working on certain components of the application.

What’s more, during the planning phase, developers have to choose the right technology stack for the product.

Stage 3 — Development

The last but not least step is the development itself. Everything planned out in Stage 2 now needs to be put into motion. Depending on the complexity of the components, the nature of the app, and the used technology stack, development time may vary.

The Best MVP Examples

For your convenience, we’ve decided to include three real-life examples of companies that developed the MVP and became successful, and one custom scenario where we dive into the costs of different MVP components, the time it takes to build it, and much more!

Airbnb

Airbnb Before and After
MVP Development Cost in 2022 – Airbnb MVP Example

Year by year, Airbnb is getting more and more popular. As a matter of fact, in 2021, the company’s value reached $113 billion dollars. Now that’s quite a score. However, it wasn’t always the case.

Let’s head back in time to the year 2008 when Madonna had only 4 minutes, Katy Perry kissed a girl, and Airbnb launched. However, it was a year prior when Brian Chesky and Joe Gebbia had the idea, that would now turn out to be a pain in the neck for the hotel industry. But how did that idea even come up?

Brian and Joe, two friends from the Golden City of San Francisco, struggled with paying their rent. At the same time, they wanted to create something that would turn their lives around. Fate would have it that at that time, a conference would soon be hosted in the city. Thinking of the high prices of accommodation in San Francisco, the friends thought it would be a good idea to rent a room. And that’s how the first AirBedandBreakfast ad came to life. Soon after, three people would take up on the offer to share a loft room, each sleeping in their own airbed provided by Brian and Joe. Of course — breakfast included. All that for just $80 per person, per night.

And hey, guess what? It was the MVP. They had the idea, created a simple website, tested it out, validated the market, and it succeeded. Soon after, they started the development of what we now know as Airbnb.

Twitter

Twitter Before and After
MVP Development Cost in 2022 – Twitter MVP Example

One of the most popular and successful companies has indeed started with an MVP. The world’s most famous online bird has been on the market for quite some time already. But did you know that Twitter wasn’t supposed to be what it is today? The platform that we now know was meant to be an alternative to traditional SMS messaging. So how would that beat SMS? Well, the answer is really simple — by being free of charge.

The question is what would be the MVP development cost of such an app nowadays? In Twitter’s case, it wouldn’t take such a long time compared to other MVPs, and it wouldn’t be as expensive as well. Time-wise, it would probably take 3-6 months of development. According to Henrik Werdelin, who is responsible for building various companies, if you were to develop the Twitter-like MVP nowadays, it would cost you up to $250,000.

Facebook

Facebook Before and After
MVP Development Cost in 2022 – Facebook MVP Example

Oh, hi Mark!

Yes, yes. The world’s most popular social media platform was also once developed as an MVP. However, the time and money that would be used for the development are significantly higher than those for Twitter. In fact, developing a Facebook-like MVP would most likely take the entire 9 months and cost approximately $500,000! Now that makes up for a hefty price.

Let’s take a look at Facebook’s before and after design.

Quite a change, isn’t it?

MVP Development Cost – A Real-Life Estimation

For the sole purpose of this article, we have prepared a custom example of the Minimum Viable Product that includes various components. For your convenience and to show the approximate MVP development cost and time, we’ve prepared a restaurant app MVP example.

Product Canvas
NAME

Gennaro’s Pasta and Pizza – A Genuine Italian Cuisine.
TARGET PERSONAS

Mike: 30 years old, loves Italian food, bored of typical chain restaurant pizza.

Giana: a 60-year-old Italian lady who misses her country’s original cuisine.
GOAL

Acquiring more clients.

Improved customer retention.

A higher number of take-out orders.

Easier booking.
FEATURES

Main page view, opening hours, menu, information about the restaurant, phone number.

Login page with password reminder option.

Booking the table with a cancellation option.

Admin view (date of reservation, phone number, orders).

Take-out option with cash only.
METRICS

Number of reservations.

Number of take-out orders.

Number of AppStore / Google Play downloads.
FUTURE FUNCTIONALITIES

Integrating a payment gate and credit card support.

Extended booking option with the ability to choose a table, number of people, and hour (all done via the app).

Implementing features mentioned in the user feedback.

Loyalty program and special deals sent via push notifications.
MVP Development Cost – Product Canvas

The hypothetical restaurant serves genuine Italian cuisine and is located in Queens, NYC. The client wants to meet the growing customer demand for a mobile application that includes general information about the joint, opening hours, address, online booking, registration, and the take-out option. Therefore, our team has prepared a real-life estimation to show you how much time and money such an MVP would require.

Without further ado, let’s proceed!

Estimations

Since we have already showcased the canvas in Stage 2 of MVP development, we should now focus on the subject of this article, i.e., MVP development cost and time.

The restaurant app that we have just mentioned consists of various components. Each of them has to be developed separately in order to create a working MVP. That being said, let’s take a look at the components, their approximate cost, and the time spent on their development.

FeatureDetailsApprox. timeDevelopmentDesign
WorkshopsDiscussion about the exact needs of the project2 days$500$500
Main PageOpening hours, restaurant details, phone number, address1-week$1,800 – $2,200$1,000
Login PageLogin, registration module, password reminder1-week$1,600$800
Booking PageDate, hour2 weeks$3,000 – $4,000$1,200 – $1,800
Manager ViewDate of reservation, hour, phone number2 weeks$3,500 – $4,500$1,200 – $1,800
Take-OutTake-out option, cash only2 weeks$2,500 – $3,000$1,200 – $1,800
Sum8 weeks$12,900 – $15,300$5,900 – $7,700
MVP Development Cost – Custom MVP Estimations

As you can see in the table above, the entire development and release of our hypothetical restaurant MVP would take approximately 8 weeks and cost $18,800 – $23,000 USD.

Furthermore, the team for the entire project should consist of:

  • Project Manager
  • Flutter/React Native Developer
  • Firebase Developer
  • UI/UX Designer
  • QA Specialist

Conclusions

As you can see, MVP development is not something that can be done in an instant. It requires careful planning, preceded by meetings (in MPC’s case — discovery workshops), and finally, followed by the development itself.

Thanks to the real-life estimation of the MVP development cost in 2022, you’ve just got a valuable insight into the entire process. If you had any doubts about the Minimum Viable Product before, we firmly believe that now you should be able to make the decision. If you have any questions about the development or any other process that we mentioned in the article, don’t hesitate to contact us! See you next time!

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