How to balance the cost of MVP as a seed-stage startup
Developing an innovative product is a time and money consuming endeavor. The product should be simple and relatively cheap but at the same time, it should deliver on Return of Investment (ROI) and satisfy business objectives. This is why the right approach to startup MVP development is crucial.
Many startups have failed because they put resources into MVP, developed it, and then never market-tested before launching. These disappointing effects are how the idea of a Minimum Viable Product came about. An MVP is the smallest possible product you can produce to prove that you meet users’ needs. Is it expensive to create one and how can you properly balance the costs?
What makes an MVP an MVP?
First, we need to touch base on what we are talking about when we start planning the development of an MVP: to put it straight, we need to focus on the “minimum” in MVP.
Through years of working with MVP development startups, we have noticed that innovators don’t always know what goes into building an MVP. What they present during workshops at BinarApps is a vision of the finished product. They approach the task of MVP development as if it meant finishing the entire product right down to the smallest detail. That isn’t a critique – we understand everyone wants their digital product to be perfect. However, what MVP requires is keeping things simple.
For example: if you’re making a social media app, don’t develop 15 types of user notifications during the MVP development phase – focus on the 2-3 most important.
You don’t have to know everything about cutting costs – it’s what we’re here for. BinarApps helps you cut the idea for a digital product into smaller pieces and decide which should go into development first.
The easiest way to estimate the budget of MVP development
Consider the following:
- What platforms do you want to use? One is perfectly fine for MVP, be it Android or iOS.
- How many developers are going to be involved? Developing an MVP for one platform = one developer, so if you want your MVP to run both on Android and iOS, you’re going to need 2 developers and so on.
- How long will it take? At BinarApps, the suggested time for developing an MVP is 3 months but that depends entirely on the type of digital product we’re dealing with.
- What’s the hourly rate of the developer you want to hire?
- What else (besides code) would you like to get out of the process?
Now you can easily calculate the cost of developing an MVP by multiplying the developer’s hourly rate by 3 months of work. Every other service will cost you extra but remember that usually, you can get a better deal by ordering a bundle of services.
Ways to balance costs of MVP
Other things to consider when estimating a budget for startup MVP development:
- Be serious about taking on the role of Product Owner. The more responsibilities you take on yourself, the smaller the cost of adding extra services into your budget. That said, be honest with yourself about what you can and can’t do – don’t bite off more than you can chew. Sometimes, letting someone from the software house become the Product Owner makes things easier – and cheaper! We have had situations like this at BinarApps, especially with non-technical innovators.
- Start with a manual version of your idea to check whether customers are likely to pay for your product. You can start with a simple landing page that seems to have a product behind it. Many startups test such a solution to establish whether there is a demand for their product. If it turns out that the demand exists, you can start spending resources on building a prototype.
- Write down the features you need and maybe develop some mockups? Look for some technologies you might be interested in using.
- Decide on the design carefully. The total cost of your MVP development is strongly dependent on the complexity of the design you want to implement. The best approach is to estimate the UI to be used. The UI must be simple and easy to navigate so that the UX is engaging for users. Components most influence the MVP cost structure of UX is preparation, wireframe (a ‘skeleton’ for your product), and mockup (this presents your project ideas to clients). Regarding mockups – you can go one more step further and create an interactive one – this is a more expensive, yet effective solution to enhance customer engagement.
- Don’t ever skip any of the three phases of MVP development: analysis, development, and testing. In order for your MVP to be successful, these 3 phases must occur. Even if this sounds obvious, fulfilling these stages might be really tricky. Each step consists of many small phases. The first one, analysis, defines the main problems and highlights the main functions. It also sets approximate costs. When it’s all done, work on development – selected functions should be high quality, as well as easy to use. Then, the product needs to be tested – it’s critical to confirm the quality of the product and its implemented functionality.
Creating an MVP means focusing on the minimum. It’s okay to start small with the most basic functionalities, simple UI/UX design, and a version for just one platform. The most important part is to think carefully about the defining features of your digital product. We’re open to helping you with the process, as well as taking your MVP development startups to the next level.