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How Much Does It Cost to Build an MVP for a Startup?

Today, I’ll start with some bad news – 9 out of 10 startups fail.

But, hey, that doesn’t mean you should throw your startup dreams out of the window. Let’s say, it’s just a word of caution. Do you know what are the two most common reasons of failure?

Poor finance management and failing to scrutinize the target market.

Whether you are bootstrapping, searching to close an investment round or just landed some angel help, being careful with your finances and testing your product concept prior to going all-in is essential to succeed in the long run.

That’s exactly where minimal viable product rolls in.


What Goes into a Minimal Viable Product?

The concept of MVP was popularized by Eric Ries – a Silicon Valley entrepreneur and leader of the lean startup movement. Reis was the first to point out that you don’t need to launch a full-featured product. Instead, it’s worth adopting a continuous approach to product development and add additional functionality within time backed up by validated learning data.

According to Ries, to minimize the involved risks – build a minimal viable product first.

In a nutshell, an MVP is a product, service or website with some basic set of features to satisfy early adopters and survey the market interest. Complete functionality is added only after the product owners had gathered actual user feedback

To develop a minimum viable product, you need to identify the right technique of how to present your idea and measure user response to it. As Ries calls it – a “build-measure-learn feedback loop”.

So that’s what an MVP should do for your startup. Now let’s have a close look at the types of MVP you can create depending on your niche and the varying MVP development cost you can bear at the early stage.

Types on MVPs Worth Using To Validate Your Idea

You should create an MVP for two primary reasons:

  • To pitch your idea for funding.
  • To validate your product hypothesis viability with the end customers.

These two reasons come with a Catch-22, however.

You can’t get funding unless you can prove that the market wants your product. And, at the same time, if there’s a market demand a lot of investors will feel reluctant to throw money into something intangible and incomprehensible.

Hence, to make an MVP for startup you need to get your back covered for both cases. Here’s a detailed walkthrough on various options you may choose to use with costs breakdown.

Product Wireframe

Wireframe is the skeleton of your solution. It’s a rough, often black and white layout of the features, navigation and screens you plan to propose in your product. This is the first step you should take to create a minimum viable product for a mobile app or a web service.

Wireframes should outline your sitemap; highlight the core features based on your target audience and hint how the in-app content will be presented.

If you are bootstrapping, you can create those yourself for the initial pitching session or prior to approaching an MVP development company.

If you choose to hire a freelance designer or an agency, get ready to pay around $1000 – $5000 depending on the complexity of your app or website.

Product Mockup

Mockups breathe in more life and depth into your product vision. Basically, those are the replicas of your final product – same colors, design, features and navigation. A mockup realistically represents how your project will look and feel in real life, yet it’s not powered by the back-end technology, which animates it.

Eric Reis in his book describes how Zappos talentedly played with their mockups to validate the marked demand and depth. This approach got a witty nickname “Wizard of Oz MVP”.

An ecommerce company now boasting $1 billion per year revenues was started as a simple website with no actual ecommerce backend. The founder just approached a few local mom and pop shoe sellers, asked to take pictures of the shoes on sale, and prominently placed those on his website. The orders started coming. He went to the shop, asked for the same pair that was ordered, shipped it to the buyer and handled the payments. While this certainly wasn’t a scalable business model, it allowed Zappos to validate their assumption that people do buy shoes online.

Interactive mockups are one-step forward in this case. Thanks to the tools like Framer and InVision you can demonstrate how the app will look like to early-bird adopters and potential investors. Additionally, our development company always suggests running a few tests with actual target users to verify the initial design and features.

So do you really need to create an interactive mockup rather than an MVP mobile app first?

Jason Zimdars, UI designer at Basecamp weighs in on the pros of mockups for mobile projects:

Even for the simplest of changes the difference between refreshing a web browser and building an app to a device (or simulator) is orders of magnitude slower. It’s worse when you consider that making even seemingly minor visual changes to iOS or Android designs in native code can take much more time than you might expect”.

Interactive prototypes were their go-to solution for the next reasons:

  • They are faster to craft (and reduce your budgets)
  • Can show how apps will look and feel on multiple devices
  • Easy-to-share
  • Work great for cross-platform development projects.

The cost to create an interactive mockup can vary from $5.000 to $10.000 and usually it takes between 1-3 months to create one.


Explainer Video

When your product is too complicated to explain and entails numerous features, your best bet to avoid chasing chimeras is to create a detailed video highlighting the benefits, unique sales offer and key features of your product.

Dropbox took this approach back in the early days and see where it got them?

A $250 million worth company with 50 million users and $240 million in annual revenue started as a 3-minute screencast video published on Hacker News. The video pointed to a simple landing page with a beta wait list subscription form.

By investing around an hour into creating a simple video, showing the key features of the app and overall user experience Dropbox managed to:

  • Get over 70.000 people on their list in one (!!!) day.
  • Get valuable user feedback for free as HN community left over 70 expanded comments.
  • Push their name out to the world.

Sometimes you just need to show your product, rather than explain how it works. Humans are visual creatures after all.

Explainer videos are also essential for crowdfunding campaigns. It’s no secret that you are doomed at Kickstarted without an attractive product promo video. All of the most-funded campaigns so far had seriously invested in those.

Now, let’s have a look at the average price of video production services:

  • Screencast video – free. (But I’m not sure you can pull the same trick as Dropbox did back in 2007 today).
  • Whiteboard animation video – a very simple video created by freelancer based on your story and voiceover will start from $250/minute. Hiring a reputable professional animation studio to do the same job can cost you anywhere between $4.000 and $10.000 per minute.
  • Graphical promo video with studio shootings, script, narration, stock footage and a professional crew with a huge wow factors will cost you somewhere between $10.000-$30.000 depending on whom you choose to work with.


Product Landing Page

Landing page is an essential element of an MVP, especially when you still need to survey the market depth and your target audience. A landing page can feature an explainer video, product screenshots, FAQ, and some additional product insights.

This page should clearly communicate the value you offer, your unique selling point and product benefits.

You can measure the customers’ interest in your product using the following factors:

  • Pre-order form leads.
  • Clicks on dummy purchase buttons, which are not connected to the backend.
  • Sign-ups for product’s beta/waiting list.
  • Survey your users and gather text feedback.

You can dip even further using the “concierge technique”.

Instead of powering up your service with an expensive backend solution, you can lead the user through all the required product steps manually.

Food On The Table tested this MVP idea back in the pre-launch days. This service offers simple weekly recipes and grocery lists based on what’s on sale at the closest shops next to you.

The two co-founders used to pay a visit to a local store and talked to the shoppers about their service. Finally, they found a woman interested in their offer and she was the first to receive a concierge treatment.

The company’s CEO came to her place weekly with a custom shopping and recipes list. All the suggestions were based on:

  • The client’s preferences
  • Promo and discount deals in the local store.

He updated the list instantly based on her feedback and desires and then got his check of $9.95 for assistance.

Sure, that wasn’t the fastest way to getting rich.

However, each week the team learned first-hand of how to build a better product, what additional features are requested and sign-up more and more customers.

That’s exactly when they’d started developing a custom backend for their service to suggest personalized shopping lists online, handle payments and parse promo deals from the local shops.

Before going nation-wide and investing everything into their service, the team carefully validated their product idea.

That’s exactly what you can do through your landing page – offer concierge/beta services to a selected list to test all your product assumptions.

How much does a landing page cost?

  • Nothing if you can code and design it yourself.
  • Using a landing page builder tool e.g. LeadPages (from $25/month) or Instapage (from $29/month) or Unbounce (from $49/month).
  • One-page promo website developed by an agency/freelance developer – between $500-$1500.


Mobile and Software MVP

Building a single-feature or incomplete product is an ideal option for those with:

  • Limited development budgets;
  • Prior audience and market survey.

You already found a profitable and non-crowded niche, but not quite sure how exactly your product should look and function?

Save the time required for development and your budgets by launching a product with just one feature, while testing your assumptions about further expansion. Google, Yahoo, and Foursquare followed this path. Foursquare users, for instance, could just check-in in through the social network with their location in the early days.

If you are planning to build an expanded MVP, you should take the following steps:

  • Write down all the product features you want to have – those should also include a technical scope to give you a better idea of how difficult/costly those are to implement.
  • List each feature in terms of priority – which will create the most value in the short-term perspective?
  • Scale each feature from 1 to 10 based on their complexity, product importance and added value for the users and focus on developing the top 3-5 ones depending on your budgets and the time available.

Second opinions are particularly important when scoping your initial MVP for startup. Get in touch with other entrepreneurs in related niches, survey your target audience once again and analyze all the data you have at your disposal.

To give you more precise ideas in terms of pricing, here’s how much some of the most popular mobile apps prototypes cost:



Don’t forget – these are the rock-bottom prices for a very basic MVP (closer to a prototype) with 1-2 core features, simplistic design and executed by one freelancer.

The Next Web published the following MVP costs of top products quoted by top US CTOs:

  • Twitter – $50,000 to $250,000
  • Instagram – $100,000 to $300,000 in 3-6 months
  • Facebook – $500,000 in 9 months
  • WhatsApp – $250,000 in 9 months
  • Uber – $1M to $1.5M
  • Pinterest – $120,000 in 4 months
  • Shopify – $250,000 and $300,000 in 4-6 months
  • Vine – $125,000 and $175,000 in 4 to 6 months

The average cost to develop a minimum viable product will highly depend on the kind of solution you plan to implement, types of MVPs you need (outlined above) and whether you hire developers locally or internationally.

You need to have a clear understanding of how “complete” and “workable” your product should be. What features you are willing to compromise at the early stage to keep the development costs at bay, yet gain the initial user feedback?

So how much does it cost to build an MVP?

  • Simple prototype for pitching – between $5.000-$10.000
  • MVP mobile or web app – between $15.000 – $50.000
  • A simple promo website – less than $2.000

It all breaks down to what you can afford at the moment and which solution will be enough to validate the key product assumptions you have. And if you need help with the development, Alty team is always here to help!

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