Wanting to know the MVP cost, you may get answers that differ greatly from each other. If you hire a freelancer, you may end up paying anywhere from AED 18,000 to AED 55,000. But why did Facebook pay AED 1,000,000 in 9 months for MVP alone? What is the difference?
In this article, we will look at the cost of MVP, plus we will tell you what MVP is all about and why it is worth using it. Let us see:
- What is a minimum viable product and what is it for?
- How to create a minimum viable product?
- Why is MVP so important for the success of a product?
- What mistakes to avoid when creating a minimum viable product?
- What are the benefits of creating an MVP?
- How much does it cost to create an MVP?
- How to make an MVP?
- The way Connect Tech is helping business with their MVP
1. What is a minimum viable product and what is it for?
The minimum viable product or MVP is the initial product launched to the market to receive feedback from early adopters. It is, therefore, a partial version that serves to gather relevant information about the design and degree of acceptance.
Once MVP is ready, you do not have the final product but the initial version with basic features. The feedback received from the first customers allows you to improve the product. It will also help us when choosing the cost of the final product.
It also helps us in other aspects such as:
- Minimize software development costs and save money by not having to invest in features or functionality that do not attract attention.
- Decrease the risk of failure and uncertainty associated with new product launches, allowing you to create a product or service with a greater chance of success.
- Start building a loyal customer base through early adopters.
2. How to create a minimum viable product?
Identify market needs. The first step in the MVP methodology is to check if this product or service satisfies a need present in the market. You must ask yourself what problem it solves and why a person would buy it. You should also analyze the competition for similar solutions and/or unmet needs. This is also important when it comes to the MVP cost.
Profile your ideal customer. To create a minimum viable product, you must analyze your customer’s needs by going beyond their demographic characteristics. Understanding consumer preferences and habits will allow you to create a product or service with features and functionality that they will appreciate.
With data about the market, your competitors, and potential customers, you will be able to determine the features of the initial model. Categorize them as “must-haves,” “desirable” and “unnecessary” and use them to create the minimum viable product. If it is very costly to implement, as in the case of a car or a building, you can use physical or virtual mock-ups.
Evaluate the results. After launching the minimum viable product, you should seek feedback. Interview customers, survey them or run A/B tests to help you choose the product features that work best. If the data is positive, you can move forward with your idea. If not, you will have to modify what does not work or pivot.
3. Why is MVP so important for the success of a product?
If we stop to think about it, there are several products launched by major brands that required a high investment but did not have the expected success. Facebook itself, now the largest social network, was already a PMV. The platform passed the test by Mark Zuckerberg with his colleagues at Harvard University.
The minimum viable product is not only to define whether a product is a good bet or not. Creating a prototype and testing market acceptance provides valuable feedback. It is interesting to use the strategy to formulate the best product.
The final project may be quite different from that initial test, it will all depend on the public response. The important thing is that even as an MVP, your product maintains a core value proposition.
That is, why is your product valuable and necessary to someone, what problems does it solve, what are its market differentiators compared to other existing options? It does not matter if a product is an MVP or not, what is essential is that it has these values for the test to be truly efficient.
4. What mistakes to avoid when creating a Minimum Viable Product?
Work with a very broad audience. In the alpha and beta phases, the audience should not be too large, otherwise, several problems can arise. For example, in the alpha phase, the product may not yet be fully developed. If the audience is too large, you may lose control over the process and people will have a bad impression of the solution.
Also, keep in mind that this product or service is an idea that has not yet been implemented in the market. Therefore, it is important to keep it secret so that another company does not gather the information and develop it before you do.
Extending the testing time is too much. Another mistake you should avoid is overextending the testing time. This period is to evaluate the public’s feedback, find the necessary changes, and perfect your product, using design thinking techniques.
Not taking feedback into account. Unfortunately, many people create products or services for themselves without thinking about what the audience needs and wants. Remember that the characteristics of the audience are important when designing the solution and this is what you will test in the MVP.
5. What are the benefits of creating an MVP?
With the start of a new business idea also comes the hope and the illusion that its launching will be a success, however, in business this happy ending is not always achieved, where not only illusions are lost, but also time and money. 85% of new product launches fail, so a smart way to know if a product is worth investing time and effort in is to create a minimum viable product (MVP).
Creating a minimum viable product is an excellent way to test your business idea in the market since it is a prototype of the product you want to launch with basic functionalities and features, which you can present to potential customers to see if it meets their needs.
Among the great advantages of creating a minimum viable product are the following:
- Confirm that the product or business idea arouses interest in the consumer.
- Validate if the customer is willing to pay for the product
- Minimize the risk of failure.
- Improve product design and functionality, thanks to feedback from early adopters
- Reduce the costs of fabrication and application.
6. How much does it cost to create an MVP?
To get an answer to the question “how much does it cost to build an MVP“, let us look at the cost of MVPs from some well-known companies. These prices go up to AED 1,800,000.
If you are a medium-sized startup and your project is not too big, you can end up with something like AED 18,000.50 to AED 183,000.00 while hiring a software company with experienced developers. This does not mean that it will compensate for the quality. If you research well, you can find very talented developers in Eastern Europe as well as in Asia.
The cheapest way to build an MVP involves contracting a team of freelancers. You will require a developer, a designer and a beta tester. The whole project can cost you around AED 55,000.50. For example, a full stack developer can charge you AED 22,000.60, a designer AED 18,350.50, and a tester AED 11,000.00.
If you do not want to hire an in-house team, the second option is to outsource to a software development team. Many startups choose this option because it is more reliable and less expensive. The average price is AED 110 per hour. If you hire 4 people, you will end up paying AED 440 per hour. This is much better than paying AED 257 per hour.
6.1 What does the development price of an MVP depend on?
You may have noticed that prices vary enormously. The answer is that some freelancers confuse the entire MVP cost package with a prototype. You may end up paying something like AED 36,731 to a web freelancer if you only need a prototype. Some startups simply ignore the research phase and rush to develop a prototype resulting in a poor design and an incomplete final product.
First, it depends on the amount of work you want to do. A complete MVP package includes a research phase in which you identify business needs, find opportunities and decide what features to include in the final product. Then, and only then, can you translate your MVP functionality into a development plan and do the real work.
The second factor that determines the MVP cost is the location of the developers. Developers in Asia and Eastern Europe are reasonably priced, while the price for a developer in the U.S. and Canada can be twice as much.
Finally, the complexity of your project and the amount of functionality are also determining factors. The more complex your project is, the more hours it will require and, consequently, the more will be the MVP cost.
7. How to make an MVP?
Research the idea and market demand. According to CBI reports, more than 40% of new businesses fail due to a lack of market demand. Yes, you have a great idea, but it may not work in a saturated market. To contribute value, you need to be aware of these issues. What value am I adding to existing brands? Why would my customers buy my product or service?
Build and launch. At this point, you should have a solid foundation for building a prototype. You know if there is demand in the market, the pain points, and what core functionality you need. Now that you are clear on all this, you are ready to test your idea in the real market. Outsourcing to a qualified team is just as important as it is when it comes to building the final product.
Decide on the basic functions. You do not need to have all the nice features in your MVP. This will only result in a significant waste of resources. Focus on the basics and if the market accepts them, your other features will only add flavor to your product.
Collecting and analyzing feedback. Be sure to keep channels open to collect feedback. These can be the contact information of early adopters or even your contacts. Surveys can also work well but are a bit more expensive. After gathering information about the strengths and weaknesses of your product, it is time for analysis and adjustments. It is important to continue testing until the product is finalized.
8. The way Connect Tech is helping business with their MVP
Having said all this, we will also mention that you may want to dispense with an MVP if you are 100% sure of the efficiency of your product idea. However, the market is unpredictable, as experience has shown.
At Connect Tech, we know that you may have a great idea, but it may not work in real life. Our recommendation is to allocate at least 10-20% of your product development to the creation of an MVP. Only then can you be sure that you are not wasting your money.
Do you need to know more about how an MVP works and how it can be useful to your company? We will be happy to help you. You can call us at +971 52 952 1175 or write to us at CONTACT@CONNECTECH.DEV.