Budgeting the Very First Launch: How Much Does It Cost to Build an MVP?

Introduction

A minimum viable product, or simply an MVP, is the first version of the product with its basic functionality that allows it to be released to the market and essentially test all the core hypotheses. It is the first time the product makes its way out there, which shows how the idea behind it works. The development and launch of the MVP serve several crucial purposes: 

• Testing core product hypotheses with minimal investment.
• Gathering customer feedback early for planning future iterations and preventing costly mistakes.
• Validating the product-market fit before scaling. 
• Managing the price for error and ensuring that the business will not over-invest in unproven products.

The MVP has a paramount place in overall business planning, as it answers questions regarding future investments in the product and helps predict the future budget for its projects. According to McKinsey, by building and testing MVPs, businesses can avoid premature capital commitments, thus conserving resources for when the product is validated and ready for scale. 

Understanding the MVP development cost is critical for several reasons. With a clear budget for the MVP, businesses can control their expenses while testing core hypotheses and adapt better to the market conditions. Since the MVP represents the first tangible product iteration, understanding its cost allows businesses to:

• set realistic budgets and prevent budget overruns;
• prioritize features and prevent misuse of resources on unnecessary functionalities 
• determine future funding needs for further investment by demonstrating the cost efficiency of the product; 
• make the scaling decisions;
• plan the improvement iterations. 

Simply put, the release of an MVP shows whether the market needs the product at all, which largely determines the fate of the business. The more precisely the business calculates the MVP price, the better it can prepare for different scenarios regarding design, development, product performance, and investments in the product.

However, the service price for an MVP on a particular project depends on many external and internal factors, which is why it is best calculated individually. Here, we will overview all the factors that impact the pricing of MVP development. 

Why Should I Plan the Budget for MVP Software Development?

A well-thought-out startup MVP development budget helps manage costs, ensure alignment with business goals, and allows for flexibility to pivot based on feedback. Let’s look at the main reasons for approaching it with precision. 

A well-planned MVP launch cost helps you allocate resources more efficiently than simply going with the flow. These resources aren’t limited to financial capital; they also include time, personnel, and technology investments.

By having a budget in place, companies can prioritize these critical features and avoid spending on unnecessary functions that could delay the project or waste funds. An MVP allows companies to quickly test and iterate their product hypotheses, but only if the resources are allocated effectively toward the essential aspects of the business model.

Budgeting the MVP cost helps to manage risks. The uncertainties in user needs, market demand, and technical challenges can make software development a risky business. It gets even more risky without proper preparation. A detailed plan gives a solid grip of your financial exposure while testing the core assumptions about the product. 

In the case the MVP does not work out, a business can pivot quickly or make necessary changes based on user feedback before sinking too much capital into the project. It is essentially a protective measure against significant financial losses, since it focuses on validating the product’s core functions before larger-scale investments.

A clear picture of software development costs gives insights into strategic business decisions. The product roadmap should align with the business’s financial milestones. With an early budget plan, businesses have an upper hand for making informed decisions about whether to scale the product or continue iterating.

It gives you more data to make the MVP investor-ready. One thing that does not appeal to investors is uncertainty. A transparent budget makes it easier for potential investors to evaluate whether your MVP is worth funding. Plus, it shows them the business is ready to scale if the MVP takes off.

Finally, a solid budget defines the flexibility for future iterations. Launching an MVP gives the ability to learn and iterate. But if the business blows through its budget during the initial build, you won’t have the resources left to make necessary changes after collecting user feedback. Planning the budget and including the post-launch MVP expenses ensures you’re not just building a product but building the right product.

Planning your MVP budget isn’t just a “nice to have”—it’s essential for ensuring your product’s success. Without it, you risk wasting time, money, and, ultimately, the opportunity to build a product that users will love.

Factors that impact MVP pricing

There are several factors that can heavily influence the overall MVP cost estimation. Let’s break down some key factors and how they impact pricing.

Scope and complexity of the project

Naturally, the more work it requires, the more resources it will take. Thus, the size and complexity of an MVP are major cost drivers. A simple MVP with a basic set of features will be less expensive than one with complex functionalities, integrations, or third-party services. The more intricate your features (e.g., real-time updates, AI-based algorithms), the longer the development cycle, and thus, the higher the cost. Additionally, a more complex backend architecture requires advanced technical skills, pushing up the labor costs.

Larger, more feature-rich MVPs will always demand a higher budget. If you need to manage your budget, it may be worth considering feature prioritization. Selecting only the most important features to focus on can reduce costs at this stage.

Type of development platform

Choosing between platforms like iOS, Android, web apps, or cross-platform solutions (e.g., React Native, Flutter) has a significant impact on the overall budget. Native apps (iOS and Android) are generally more expensive to develop because they call for separate codebases and expertise. 

Opting for cross-platform solutions can reduce the required time and cost, as they allow a single codebase to function across multiple platforms. However, native apps still offer better performance, which is a trade-off for cost savings.

Development team structure

The choice of how to build your MVP dramatically alters the pricing ranges for the development. A startup can opt for hiring freelancers, working with agencies, or assembling an in-house team. Here’s a brief comparison:

Even with a perfectly calculated and detailed cost breakdown for MVP, there are still risks related to the further performance of the product. While its success is not guaranteed, hiring an in-house team may be a drastic investment. The optimal way to manage this cost is to use MVP development services at the initial stage and proceed to assemble a long-term in-house team when the product is established on the market. 

Geographical location

Where your development team is based can have a massive influence on MVP costs. Developers in North America or Western Europe generally command higher rates compared to developers in Eastern Europe, Asia, or Latin America. However, instead of focusing solely on rates, it’s important to assess the company’s expertise, experience, and track record. A well-established development team with a relevant portfolio, strong project management and technical skills can provide better value, ensuring quality results and minimizing risks, regardless of location.

Here an Accelerance’s summary of 2024 Global Software Outsourcing Rates and Trends:

While cost efficiency is important, it’s equally essential to consider factors like communication, collaboration, and quality control. By choosing a reliable digital product development team with strong expertise and a solid track record, you can achieve high-quality results while maintaining cost-effectiveness, regardless of location. 

Design complexity

Custom, intricate designs—whether UI/UX or visual assets—significantly affect the MVP budget. A simple and functional design may only require standard UI components, while more advanced, interactive, or animated designs will necessitate a higher spend. The more effort involved in the design, from custom branding to complex user flows, the greater the cost.

If you want to manage this expense, opt for a minimal design for the MVP phase to reduce costs and only invest in advanced designs when user testing justifies it.

Choice of the technology stack for MVP

The technologies used to build the MVP greatly influence the price. Some languages, frameworks, and tools have a steeper learning curve or need specialized expertise, which can increase costs. For instance, using an emerging technology like blockchain or AI can be far more expensive than traditional stacks.

Additionally, if the MVP requires integrating third-party APIs or services, this can add to the costs based on licensing fees or additional development work required to connect the systems.

Examples:

• Traditional stack (PHP, Ruby on Rails): Generally affordable with a wide talent pool.
• Modern stack (React, Node.js, Python): Slightly more expensive due to growing popularity but more scalable and versatile.
• Emerging technologies (AI, blockchain): High development costs due to specialized skills required.

Stages of MVP development 

As a rule, the overall cost of an MVP is a combination of variables at each stage. Every project has its goals, vision, and planned functionalities which is why it is so challenging to name the average price of an MVP. It does depend on many things. 

Building an MVP is a structured process, with standard steps towards the result. Each of the MVP development stages plays its role in the success of the product and reflects in the overall cost accordingly. Let’s walk through each of the stages. 

I. Product Discovery Phase

Every stage of development has impact on the following ones. The discovery phase is the essential groundwork, where the business validates the product idea and gathers as much information about its audience as possible. It involves conducting market research, defining user personas, mapping user journeys, and clarifying the business objectives. This phase is necessary to ensure that the MVP addresses a real problem, aligns with user needs, and has the potential to meet market demand. 

Expected outcomes after the discovery phase:

• Alignment with investors. It provides a clear problem-solution fit, which helps get investors on board.
• Avoiding unnecessary expenses. Early validation of ideas prevents the business from spending on features or products that may not be viable in the market.
• Solving a real problem. The discovery phase helps identify user pain points and tests whether the product concept offers genuine value.

This is the stage that clarifies the budget of for the MVP with the desired features or helps to optimize the development in accordance with time and budget. Also, even if the scope of the project exceeds the initial timeline for the investors or the initial budget, Django Stars consultation with a discovery phase can help to prioritize features for the initial launch with the infrastructure for gradual scaling and integrations. 

Estimated duration & cost

Time: 2 to 4 weeks

Cost: $5,000–$20,000 (based on the complexity of research and consulting involved)

II. Prototyping and design

Based on the findings and insights about the used through the discovery phase, the team creates a tangible representation of the product through wireframes, mockups, and interactive prototypes. This phase is necessary to map out the UI and UX to get a visual understanding of the product and test the user flow.

Outcomes

Refined design. Working with prototypes allows for making iterative changes to the design and testing it with potential users before moving into full-scale development.

Minimized MVP coding costs. With a prototype, developers can have clear guidelines to follow, which prevents expensive revisions during the coding stage. Plus, this stage also helps to determine the expertise needed for the development itself. 

Testing UX. A good prototype helps to gather user feedback on the product’s usability and improve the design.

Estimated duration & cost:

Time: 2 to 6 weeks

Cost: $10,000–$30,000 (depending on design complexity and the level of prototyping required)

III. MVP Development

Here, the team of developers turns the prototypes from the previous stage into a working product. This version of the product must feature core functionalities that provide value to the user. Naturally, it will be limited in scope for the sake of avoiding unnecessary time and expenses. 

In Django Stars’ practice stage includes quality assurance to ensure the MVP meets quality standards and operates smoothly across various devices and platforms. Quality assurance team identifies bugs, issues, and optimization opportunities before the product is released to the public.

Here, the MVP quality assurance costs will depend on the number of tests, platforms, and optimization needed. The cost of conducting this stage will depend on the technology stack, team size and expertise, and feature complexity.

Outcomes

• Early delivery of the product value The MVP lets you release the product quickly and gather feedback from early adopters.
• Iterative improvements based on feedback 
• Resource optimization by developing the product with minimal resources invested.
• Product reliability
• Optimized performance across devices
• Long-term savings

Estimated duration & cost

Time: 3 to 8 months

Cost: $70,000–$230,000

Approximate MVP cost and duration

The following range starts roughly with the mono-feature demonstrative MVP and progresses along with the functionalities featured in the product, their complexity, headcount of the team working, their seniority, and stakeholders’ plans for the future of the product (scalability, integrations etc.)

In each particular case, the calculated MVP price is determined by the combination of criteria by the client.

The following estimation features a rough range of costs of MVP for startups, from the simplest to the most complicated cases.  

It is about balancing speed, cost, and functionality to bring a viable product to market quickly. Costs and timeframes can vary widely depending on the complexity of the project and the development team’s location. A clear focus on the core value of the product can keep these factors in check.

If you are still on the 

Post-launch MVP development cost 

In fact, the launch of the MVP is not the end of the work. It is the start of long, more repetitive work on refining the product and making it visible. Post-launch is the time to observe the performance and focus on marketing, sales, and ongoing maintenance. All these activities are crucial for the product’s success and require proper budgeting. Commonly, post-launch MVP development includes the following. 

Marketing

As the product is already out there, the business must make sure it is visible to the relevant audiences. Thus, marketing the MVP is crucial for attracting early users and getting feedback for future iterations. The usual marketing kit for digital products includes SEO (Search engine optimization), SMM (Social media marketing), PPC (Pay-per-click advertising), content marketing, influencer partnerships, and email campaigns.

Since the product is new, the marketing campaigns must focus on making people try the product, building brand recognition, and gathering feedback. Thus, an effective marketing campaigns will put the product in front of the right audiences. 

As today’s market is quite crowded in nearly each domain, working on differentiation and recognition will be another focus point. However, a well-executed discovery phase provides valuable insights for effective brand communication. Finally, the campaigns must include encouragement for user reviews and feedback for future improvements.

Estimated costs

Often, marketing campaigns are shaped by the available budget, rather than the product’s needs. Ideally, the campaign needs and specifics of the product would determine the best choice of marketing channels and the marketing budget would be based on the actual marketing needs. 

Sales

While the marketing budget is there to make sure the product has interest and leads, it is also crucial to convert them into customers. For that reason, it is important to include sales in the post-launch budget. At this stage, it will be directed at building a sales funnel, nurturing leads, and converting those leads into paying customers. 

The expenses include hiring a sales team to build relationships with potential customers, using CRM systems, and creating promotional offers or free trials.

The post-launch sales team usually focuses on revenue generation and building customer relationships, all while refining the sales process that works for the product. 

Estimated costs

*Right after the product launch, businesses may not need or consider automation tools and resources, as it only establishes the sales workflow. However, as the pool of clients grows, such tools may be included in the budget to streamline this process.

Maintenance and support

The work on the product itself never stops after the MVP launch. The budget for this work must take into account fixing bugs, optimizing performance, and handling user inquiries. It is necessary to keep the product functional and competitive in the market.

What does maintenance include?

• Fixing bugs and issues based on received feedback
• Adding new features for the product to evolve
• responsive customer support to keep users happy and reduce churn

Estimated costs:

The expenses on the support team will depend on the number of representatives and the complexity of support. For server/hosting costs, that will depend on traffic and infrastructure.

Post-launch work on the product is just as critical as the development itself. Including marketing, sales, and maintenance into the budget will ensure sustainability and steady growth of the product. The cost for these efforts can vary widely based on the business scale, marketing strategy, and support needs. However, careful planning and resource allocation will help to put the resources on hand to their best use.

Post-launch MVP development budget summary table:

Hidden MVP Development Cost No One Talks About 

Getting the MVP on the market may often follow “the sooner, the better” logic. However, a rush in this matter may sometimes make teams or stakeholders overlook certain issues that turn into even larger expenses after the product is already out there. These are hidden costs of MVP development nobody talks about focusing on the conventional steps of creating an MVP. If not accounted for early on, they can significantly inflate the project budget. 

Expansion of project requirements

In Django Stars’ practice, this is one of the most common factors in extending the development duration and cost. When the process of working on the features starts, the original scope of the product can grow due to stakeholder input or emerging ideas. 

The thing is, the stakeholders or the business owner sees the potential of the product and suggest changes to the development process as it goes. In this case, the development team has to go on side quests for additional functionalities, which eventually prolongs the whole process and increases its cost, whether the business is charged with MVP app cost per feature or for the time spent on the whole thing. 

The best way to avoid this hidden cost is sticking to the originally prioritized features and include scaring possibilities in the product infrastructure. This way, the product can evolve post-paunch, when it already brings profit. 

How to prevent it? 

• Define a clear product purpose.
• Establish clear prioritization between “nice-to-have” vs. “must-have” features during the product discovery phase. 

Development shortcuts consequences

In the rush to get an MVP to market, developers may take shortcuts—opting for quicker, less robust solutions to save time. These shortcuts can include hard-coding temporary fixes, using minimal testing, or avoiding security measures. While this may reduce immediate development expenses. However, such shortcuts may lead to pricier problems in the future, such as:

• performance issues,
• security vulnerabilities,
• scalability problems.

Based on the gravity of the shortcut, it may lead to consequences. They vary from poor user experience to security breaches or the expenses of rebuilding the product from the ground to facilitate future scaling. 

How to prevent the issues?

• Avoid overly aggressive timeframes and resist the urge to cut corners. 
• Invest a proper amount of time in the initial stages to plan sustainable growth for the product.

Challenges in third-party integration

MVPs often use third-party services to enable payment processing, authentication, or analytics. While these integrations are essential, they can include fees as well. Some third-party services charge based on usage tiers, which can quickly escalate as your user base grows. Plus, integration with these services can turn into technical challenges that will need custom development work.

If not planned in advance, working with third-party services will take more development time and increase the overall cost.

How to prevent these challenges? 

• Thoroughly research the third-party services you’re planning to use and estimate costs based on projected user growth. 
• Consider potential integration challenges during the development phase.

Legal and industry standards adherence

Even though it is imperative, compliance with legal and industry standards can sometimes be overlooked during MVP development. Following the regulations like GDPR, HIPAA, or PCI-DSS can introduce additional costs for the development, based on the industry the product serves. Such costs can manifest in legal fees, additional security features, and audits may be required to ensure compliance. It is especially important for products that handle sensitive data like healthcare information or financial transactions.

If legal compliance is not considered initially, it may result in fines and additional expenses for re-developing the product. On top of that, it will take longer to reach the final shape of the product.

How to prevent these issues?

• Include compliance in your budget from the start.
• Work with legal advisors or compliance consultants to identify potential risks early on.

User feedback iterations

Once the MVP makes it to the hands of users, it will likely receive feedback for future improvement. Such feedback must be taken seriously, as it will eventually make the product better. However, addressing it often means making continuous updates and considering the MVP iteration cost post-launch. 

In fact, working with user feedback and iterating new features is a part of a predictable post-launch budget. Yet, sometimes, users may point out significant changes in the product that go beyond the planned cost.

How to keep feedback iteration within the planned budget?

• Make regular development sprints for updates, rather than trying to fix every issue immediately. 
• Prioritize feedback to focus on the most critical improvements.

The hidden costs of MVP development can quickly spiral if not accounted for during the planning stages. To mitigate such risks, a proactive approach—focusing on careful planning, compliance, and managing user expectations—is crucial. However, an experienced software consulting team on board can predict possible issues and prevent unexpected expenses. 

Industry-Specific MVP Examples and Costs 

The cost for MVP development may vary dramatically based on the industry. Usually, the final cost will depend on complexity of the product, security measures introduced, integrations, and functionality expected. For example, building a banking or healthcare product that deals with sensitive user data will be much more expensive than creating an online store with a catalog. Let’s see a few examples and analyze pricing for the development.

Banking Sector MVP

The banking industry is one of the most strict ones to the products it approves, so MVPs here are among the most expensive to develop. Any product for banking must meet strict industry standards:

• PCI-DSS for secure payment processing, 
• KYC (Know Your Customer) protocols, 
• GDPR for data privacy. 

Plus, the development must account for secure user authentication, encrypted transactions, and robust fraud detection systems. The cost of development of such a product is around $120,000.

What shapes the cost?

Meeting compliance requirements. The overall cost of development includes legal fees and consulting to meet regional and global financial regulations and avoid unexpected fees or fines.

Real-time data & transaction management. Banking apps handle enormous amounts of sensitive information in real time. It requires secure data storage systems, so the product must feature strong encryption protocols.

Security. The industry standard for apps like this includes, biometric or two-factor authentication, multi-layered encryption systems and fraud detection algorithms, which take time and high expertise to develop. 

How it works in practice? Learn more on how Django Stars developed as user-centered mortgage application with all the development issues considered. See how complex infrastructure matches smooth user experience in Sindeo case study. 

Retail/E-commerce MVP

Retail and e-commerce usually run of simpler functionalities (product catalogs, search functions, shopping carts, and payment gateways). Compared to highly regulated industries, the technical complexity here is much is lower, which makes e-commerce MVPs more affordable to build. Such product still have compliance concerns like payments, but it is still a lesser challenge to build such an app. Thus, developing an e-commerce MVP may cost about $8,000.

What shapes the cost?

The features are easy to develop. Simple product listing with filters for easy browsing, basic search, and sort options are paths well-paved, so the development does not require to re-invent the approach for the product.

Fewer compliance issues. Retail/e-commerce platforms don’t need to meet highly strict requirements like fintech or healthcare domains.

Simpler tech stack. Commonly, it is sufficient to integrate third-party APIs for payments or shipping and basic front-end/back-end functions. A broader range of expertise can work with it. 

Healthcare MVP

The main peculiarity of digital products in healthcare is the sensitive nature of the data they handle. Be it a telemedicine app or a health-tracking platform, these solutions must follow regulations like HIPAA (Health Insurance Portability and Accountability Act) in the U.S. or similar healthcare data privacy standards worldwide. 

In addition, healthcare MVPs often require complex features like real-time video consultation, encrypted data storage, and even AI-based health monitoring, so costs for such product can reach $60,000–$150,000.

What shapes the cost?

Regulatory compliance. Building a healthcare app will require consulting legal experts to ensure it meets privacy and data protection laws.

Handling sensitive health or patient data. The product has to feature strong encryption and storage for the security of sensitive medical records. 

Complex feature set. Today’s healthcare products can feature real-time video streaming, health data analysis, or integration with medical devices (e.g. wearables). In most cases, it calls for higher expertise for advanced development and infrastructure.

MVP Cost Comparison Between Two Similar Startups 

The MVP development cost may differ dramatically, even if the product targets the same market. Say, you want to build a ride-sharing app. The way you choose to deliver value to the user may go different ways. 

One way to build a ride-sharing app is by creating a service with pre-scheduled rides with simpler functionality. Let’s call it “Sharp”. The other one is to create an application with real-time ride and price tracking, so it may be called “TrackRide”. The cost for Sharp will be significantly lower Than TrackRide. Let’s see why that is. 

In the case of Sharp, users simply book rides in advance. That means there is no need for real-time GPS tracking, dynamic pricing, and matching. Such a service design also means a simple interface and interaction design. Thus, this MVP will have a simpler backend architecture, require fewer integrations, and work with traditional server setups. This way, the application will need less time and money for development. 

On the other hand, TrackRide will be a more interactive and thus complex product. It will need a complex backend for real-time tracking, matching, and dynamic pricing. In this case, the product will rely on in cloud infrastructure to manage fluctuating demand and high traffic volume. All of these factors call for more complex development and higher final cost. 

See how the custom approach to problem-solving in MVP development works in real life: check out the Diviac case study and Illumidesk case study by Django Stars. 

Final Thoughts

So, how much does an MVP cost? There is no one-size-fits-all estimate. Every aspect of the envisioned product will impart the final cost, which is why the range of estimates here is so broad. Each project is unique, so careful planning, research, and customization are vital to calculate the cost as precisely as possible and avoid surprises down the road. 

It is also important to remember that an MVP isn’t just about the launch. A thorough discovery phase is necessary for defining the product’s direction and minimizing unnecessary expenses. Plus, the post-launch development is worth carefully budgeting as well, as it will determine the product’s long-term success.

If you need a detailed cost for your MVP idea, be sure to reach out to our services in custom software development for startups and receive an expert consultation!