How Much Does It Cost to Build an MVP? + 7 Tips for Staying on Top of Your Budget

Table of contents

• Factors That Affect the Cost of Developing an MVP 

• Development Contract Types & How Agile Contracts Help You Save

• How to Calculate MVP Costs 

• NaNLABS’ Top 7 Tips for MVP Cost Control 

• Key Takeaways 

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Factors That Affect the Cost of Developing an MVP 

There's a long list of variables which can influence how much an MVP is going to cost, but the ones detailed below are by far the most impactful. Keeping a close eye on these elements when planning and scoping your MVP will significantly boost your chances of success! 

Application Complexity

The first factor to consider when estimating MVP costs is the complexity of the application you want to build. As it says on the tin, a Minimum Viable Product should only have features which are absolutely necessary to achieve its goals. So if you want to keep your costs down, don't be afraid to mercilessly cut out all the bells and whistles and narrow your scope down to what's essential to delivering your value proposition. This is called a 'lean development approach' and it helps minimize unnecessary development work.

That being said, a small number of features doesn't always mean a small bill. You can still end up with an expensive MVP if you opt for more challenging features that take a long time to build. Your development team should be able to point out these high-cost features before the work begins and possibly recommend alternatives with a lower price tag. 

UI & UX Design 

While both the User Interface (UI) and User Experience (UX) design play a big role in the success of any product, they can also quickly blow up your budget. The key is to strike a balance between functionality vs design when creating an MVP. 

As you did in your feature selection, we also recommend adopting a lean development approach towards your UI and UX design. Go for a design that is user-friendly and offers a good enough experience, but don't focus too much on aesthetics at this point. 

At this stage, your product needs to appeal to early adopters, who mostly care about added value and don't usually make emotion-based decisions. This rational crowd does their research before buying and won't be tempted by every new shiny object. So don't worry about that now. 

There will be time to make your application look just right later on, once you've validated your idea and nailed your product's features. 

Your Choice of Tech Stack

It's probably no surprise that your tech stack choice will impact your MVP budget, but sometimes the added expense doesn't have to do with the cost of the technology itself. 

Back-end Development

Certain technologies are not necessarily more expensive on their own but require a skill set that's hard to find. So it sometimes comes down to a simple matter of supply and demand. Relying on talent that's scarce on the market will automatically leave you with a steeper bill. 

You’ll have a harder time finding Scala or Rust developers, for example, than JavaScript or Python devs. If your goal is to make your MVP development process as cheap as possible, go for popular or open-source technologies wherever you can. 

Web Apps

For those building a web app, our message is simple: don't waste your resources trying to reinvent the wheel! 

Start building on top of what you can find in libraries such as MUI or Tailwind, and take it from there. You'll save a lot of time (and money) by not creating standard elements, like buttons and pop-up windows, from scratch. 

Don't worry! You can still customize these elements to provide a professional and unique user experience. But this frees up your team to focus on creating the elements that add real value to your MVP.

Cloud Architecture

When an MVP involves cloud architecture, you must be extra careful about how you set it up. Due to the elasticity involved in these kinds of services, if you don't have a professional team that can stay on top of it, you could end up with very high costs later down the line. 

Cloud DataBases tend to be especially expensive, so discuss your options with your development team beforehand and look for a smart way to set it all up.  

Mobile Apps 

If you're a startup working on a mobile app (except those building very niche mobile products), you probably don't need any app native development. 

In these cases, we recommend using technologies like React Native or Flutter, which will spare you the trouble of developing two codebases and paying for two different teams (iOS and Android). 

This also helps avoid feature disparities between your iOS and Android apps and allows you to develop and iterate faster based on the user feedback you collect.

Type and Location of Your Development Team 

Development teams can come with wildly different price tags, depending on the type and location of the team you hire.

Development Team Types

Building an in-house team is not only more expensive due to fixed costs but also demands a significant amount of time. And, of course, time is of the essence when launching a new product! Instead, most people will choose between working with a development agency or with freelancers. 

Hiring freelancers is sometimes cheaper, but managing these professionals individually often becomes a huge challenge. There is also a risk in relation to the availability of the freelancer later on when you need to iterate or scale your MVP.

Agencies are usually a great middle-ground between the high costs of in-house teams and the uncertainties surrounding freelancers. You can also find agencies like NaNLABS, which offer team augmentation services. This type of collaboration expands the possibilities of your in-house team by integrating it with a squad of nearshore developers, all handpicked to match your desired skill sets. 

Development Team Location 

As you can imagine, developers in regions with lower costs of living tend to charge lower hourly rates than those in high-cost areas. So hiring a team in another country could drastically reduce your costs and open a new range of possibilities for your MVP. 

To get a better deal, avoid hiring out of the US or Northern Europe, but beware of massive time zone differences and teams that can't speak your language. Experienced teams collaborate just as well remotely as they would in person, but few things will kill an MVP project faster than poor communication. 

An Important Note on Team Experience

Here's one final but VERY important piece of advice on team selection: the best way to save money is to get it right the first time! And to get your MVP right on the first go, you'll need an experienced team with a proven track record of what you're looking to build.

At NaNLABS, for example, we make it a point to offer samples of similar projects we've worked on when negotiating with new clients. We also regularly post case studies that illustrate our experience with MVP development, as you can see below: 

• Complete MVP Development in only 45 Days for a privacy management client

• Helping Popr.ai design, build and launch its MVP with Node.js

• Using MVP Development to Build a Communication Skills Web App

• MVP Development With React.js: How Our Client Went from Ideation to Scalable App in 90 Days  

Naturally, the development process is called a "process" for a reason, and you should expect adjustments to be made along the way. But your development team should have enough experience to properly advise you and build a solid MVP without a ton of rework. 

Remember: a cheap team will quickly become very expensive (not to mention stressful) once things need to be redone time and time again!  

Development Contract Types & How Agile Contracts Help You Save

On top of finding the right squad to work with, keeping your MVP costs down requires you to be smart about the type of contract you'll sign with your team.

Rigid fixed-price contracts are great for budgeting, but don't leave much room for the inevitable changes you'll need to make along the way. Time and material contracts give you total freedom to adapt as you go, but make budgets very hard to control and often lead to cost overruns. 

Our preference is to work with Agile contracts, which are essentially fixed-priced contracts with built-in flexibility. 

Designed to accommodate change, these contracts make it easy to adjust the project scope as needed, helping to ensure that the MVP is delivered on time and within budget.

Our Agile contracts, for example, include 90-day iterations to keep risks and deviations to a minimum. By using the "T-shirt sizing" method to estimate how much time or effort a task or feature will require, we guarantee total transparency and make it easier to control costs. 

We also work closely with the client to determine if a certain feature is worth its development cost and don't mind scope changes, as long as we're replacing items of equal complexity. At the same time, most of our projects include a set of “nice to have” items, which are non-mandatory features that we try our best to implement simply because we like to go the extra mile.

How to Calculate MVP Costs 

One of the main things you need to know before building an MVP is that it's nearly impossible to know exactly how much your project is going to cost because there are just too many variables involved. 

Luckily, you can still get a good ballpark figure using one of the MVP cost calculators available online or by breaking down your project into key components and estimating the cost of each one. Below, we'll list the main expenses you can expect when creating an MVP.

Pre-development Costs

• Market Analysis – This stage requires a lot of research to understand the market you'll be entering, analyze your competition, and identify gaps that your MVP can fill. All of this takes time, and you may need to pay for the help of specialists in this field or to access data that will be used in your analysis. 

• Target Audience Validation – Validating who your target audience is and what they value the most means spending on activities such as surveys, focus groups, and even travel if fieldwork is required. 

Development Costs 

We've already outlined the main factors that influence the cost of developing an MVP in the first part of the article. Now, to get really clear on what you'll be spending during the development phase, you'll need to estimate the cost of building each product feature.

This will be very hard to do if you're not a developer yourself, so be sure to consult a team with solid development experience to get these numbers. But, again, even the most seasoned professionals will only be able to give you a rough estimate of these costs since there's always a lot you can't predict.  

Post-launch Costs

• Testing & Iterating – These are the most obvious costs of the post-launch phase of your project and include continuously testing your MVP and gathering user feedback. The feedback collected allows you to make iterations until you arrive at your final product. 

• Marketing & Sales – As with any product, getting the word out about your MVP and acquiring your first customers requires a dedicated budget. Be prepared to spend on developing and implementing a marketing strategy and on hiring sales and business development personnel. 

• Maintenance – Regular maintenance and updates to address bugs and improve functionality are essential. And you'll likely also be spending on elements like servers, databases, APIs, and many other third-party tech components. 

• Customer Care – Once your product is up and running, you'll need to factor in the cost of having both people and a system in place to provide customer support and address any user inquiries. 

NaNLABS’ Top 7 Tips for MVP Cost Control 

Since the NaNLABS squad has over a decade of MVP development experience under its belt, we've decided to ask the team for their top cost control tips. 

1. Dedicate enough time to nail your project planning and scoping, and stick to a lean development approach.

2. Prioritize the features that are most critical to the success of your MVP. By developing the most important functionalities first, you automatically reduce delay and cost overrun risks.

3. If there's a need for research or exploratory tasks, use Timeboxing, which allocates a maximum time to an activity, to avoid big deviations.  

4. Use prototypes and mockups if you're struggling to make a decision about a certain feature. Coding is always way more expensive and should only happen when you're sure that the feature belongs in your MVP.

5. Avoid overengineering your solution and prioritize elastic infrastructures, which can expand as your demand grows.

6. Choose open-source tools over paid ones wherever possible.

7. Use paid third-party components whenever building them yourself is more expensive. If it works and you decide to scale, then you can build your own component with confidence that it's worth the effort.

Key Takeaways Around MVP Costs

So now you know that by carefully assessing factors like application complexity, tech stack, and team selection, you'll be a lot closer to a realistic and manageable budget. That's because the decisions made before the building work starts are actually the ones with the highest impact on your MVP costs. 

But be smart and go for agile contracts and experienced teams when hiring your MVP development services. You don't need to be an expert in custom software development pricing to know when a quote is too cheap for what's being promised. If it sounds too good to be true, it probably is, and you'll save both time and money by working with a team you can trust! 

That sketch sitting in your library? It’s time to share it with the world. From idea to launch, we can design, architect and code your MVP vision into reality in 3 months or less.

Get in touch. We don't byte!