MVP as a concept incorporates the idea of practicality into the product development process. Let’s look at what MVP means, what importance does it holds and the time and cost it takes to be built.
What is MVP?
MVP stands for Minimum Viable Product, a concept given by Eric Ries, as a part of his Lean Startup methodology. The term introduces a version of a product that has features enough to have buyers. The team then gathers validated feedback or customer learnings, to enhance the complete, final product that would be released in the near future.
It is the most basic version of the product that would be launched in the market later by the company. MVPs are only introduced in the market to record users’ sentiments toward the feasibility and utility of the product. Insights are gathered relating to what’s lacking in the product along with its strengths and weaknesses.
Airbnb introduced its MVP before the final product. This MVP looked like a basic designed landing page, with the main goal to check if people would book the apartment. And that was enough to see that, yes, people did it in actuality.
Spotify founders came up with the idea of starting a free music streaming service and using ads to generate revenue. Back in 2006, when they thought of this idea, some websites dominated the music streaming market. So, a lot of similar ideas entered the market and were brutally killed.
The founders thus wanted to test their idea in the market. They did this with the help of an MVP. The MVP was launched in the form of a desktop app that only offered one key feature, music streaming.
Afterward, they added the option for customers to pay a monthly fee to enjoy an ad-free experience. As the idea showed the potential to become something big, they began to enhance it further. Currently, Spotify has a market worth $18.70 billion.
MVPs Should have:
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enough features for them to get marketed,
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they must have a feedback mechanism that would allow users to share their feedback and,
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additional future benefits should be offered to the users that initially adopt the MVP version first. For example, Google gave a free upgrade of its OS to all Nexus users.
Reasons Behind the Development of MVPs Are:
MVPs are important for the following reasons:
1. MVPs help market and demand analysis for businesses
A market demand can be studied but there might be a gap between what a business thinks a marketplace needs and what the market actually needs. This gap can be highly costly for the business and might take away the competitive advantage the business was hoping for with the introduction of the product.
This is exactly where MVP helps businesses. Through MVP, a business can enter the market, test the waters and then decide how it wants to go further. It helps businesses analyze the feasibility of their idea and its potential to generate need/desire, and revenue.
Uber, for example, introduced its MVP version in 2010 that simply just connected cab drivers with iPhone users/owners in San Francisco, allowing them to pay for the ride using a credit card. The MVP version was enough to analyze if people were ready and accepting of a completely new taxi experience.
2. Ready MVP simplifies the initial funding process
Something is certainly better than nothing. MVP proves exactly the same. These products help businesses persuade potential investors and stakeholders that your product and even startup are worth investing in.
With a product already released in the market, investors can make an informed decision regarding investment based on the feedback and potential of the product.
3. MVP boosts product relevance and marketability
MVP allows businesses to collect feedback and reviews on their product, carry out sentiment analysis, and enhance their products and usability as per consumer needs. It helps businesses to test and reduce factors behind product abandonment.
4. Removes doubt and speeds up release
Due to extensive market competition, businesses often hesitate about releasing the final product, striving to make it better and adding features and functionalities every now and then, and investing so much into something they can’t be sure of.
Well, guess what? As humans can’t achieve perfection, nor can products. The better thing to do is to get out there and experience success or failure or something in between, first-hand, and then work on improvements.
Facebook or Meta, one of the tech giants today, in its MVP version, was just developed for students, for them to create class groups and communicate there. However, the final product opened up to a larger audience and success poured in abundance.
MVP helps businesses to release their product with basic features, record the public reaction and improve the product as per user feedback. This reduces the time to market as the business gets to know what’s lacking and then adds accordingly, rather than working or wandering aimlessly.
5. Make the audience feel heard and gain initial customers
It isn’t easy to gain the first customers for your product in this dynamic, highly competitive market. MVP allows you to gather user opinion/feedback, making them feel heard and valued and hence, earning their loyalty.
These users/customers evolve with the brand, looking at business and brand growth as personal victories.
Moreover, MVP can be a great starting point for startups. As per reports, 90% of start-ups fail, and one of the key reasons behind this failure lack/absence of customers interest. Interestingly enough, this was one of the driving forces behind the concept of MVP and its adoption.
MVP allows start-ups to test their idea and receive feedback on their market relevance. In the case of an idea failing, the budget loss incurred would be minimal.
It is further a no-brainer that product development generally also is a risky process due to huge time, money, and effort investment.
However, an MVP certainly reduces that risk by introducing a test version of the product in the market, highlighting the feasibility and utility of the product for the end users, through customer feedback.
Airbnb’s first landing page started without payment functionality. As a result, a customer had to make payments to the host in person. This was deemed as a big problem in the customer feedback, and as a result, the payment option was included in the final product.
This is the most useful aspect of MVP; it helps businesses avoid development failures and save huge costs. Early feedback facilitates enhancement or modifications in a product to make it more customer and market-oriented, offering the customers exactly what they need, and increasing the success rate of the product.
Also Read: MVP Criticals for Startups
How Long Does it Take to Build an MVP?
A minimum viable product usually takes around 3 to 4 months to be built. However, if the complexity of the product is high, in terms of the features set, design, and engaged human resources, the building process may take up to 6-9 months.
Time Taken for MVP Development as per Project Kinds:
Project Type | MVP From | Average Time |
MVP for Startup | 2 Months | 3 Months |
MVP for CRM | 3 Months | 4 Months |
MVP for ERP | 4 Months | 7 Months |
Taken to Build MVP as per the Industry/Organization.
Industry | Estimated Time (Months) |
Hospitality Software | 6 |
OS Live Chat Tool | 1 |
Real Estate API | 2 |
Auction Platform | 15 |
Marketing Automation Tool | 3 |
Telecommunication Platform | 3 |
Onboarding Software | 4 |
Home Insurance Platform | 4 |
Web Design | 1 |
Sales SaaS | 5 |
Automation Services | 5 |
Digital Lending SaaS Platform | 5.5 |
Entertainment Software | 8 |
Travel Insurance App/ Website | 6 |
P2P Marketplace | 6 |
Digital Workplace | 7.5 |
B2B SaaS Platform | 8 |
Lead Generation Software | 8 |
Costs Involved in MVP Development
Let’s now look at the costs involved in building an MVP.
The average cost of developing an MVP for iOS and Android in India, which includes full backend infrastructure, and a design would cost a business approximately $12k – $100k.
The given costs include product management, QA, and team communication services.
While these were general costs and expenses, let’s look at specific costs that vary with the type of development teams, geography, etc.
Development team:
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If you are hiring an in-house development team of 5-8 Devs, the costs would come out to be between $131,770 – $155,350 per Annum. This cost includes cost per hire, team costs, IT expenses, IT systems, technology training, licenses, etc.
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If you go for freelancers, the cost comes between $3,000 and $5,000 per month, depending upon the experience and expertise of the freelancers. The breakup is as follows:
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A full-stack developer with decent experience of more than 4 years who can be hired on a monthly basis would charge around $2,000-$4,000.
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A freelance designer based out of India would cost around $1,500- $2,500 per month whereas an Onshore freelance designer would cost from $4,000 – $15,000
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A tester would be also required, and the costs of the same would be around $2,500 each month.
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Hiring local teams to develop an MVP would include developers with charges around $50-$100 per hour and if we take the lower limit then a team of 5 costs around $160,000 – $180,000 per Annum
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The most preferred option is outsourcing the MVP development process. An outsourced team would cost you around $30,800 – $36,000.
Type of Team | MVP Development Costs (Approx) |
In-House | $132,000 – $155,000 |
Freelancers | $4,000 – $15,000 |
Local teams | $160,000 – $180,000 |
Outsourcing | $30,800 – $36,000 |
Geolocation:
The hourly rates as per different regions are as follows:
Region | Hourly Costs (Approx) |
Western Europe | $110-200 |
Eastern Europe | $20-50 |
North America | $150-230 |
South America | $30-50 |
Africa | $20-40 |
Australia | $100-180 |
Asia | $15-40 |
There are post-development factors that also add to MVP costs. These after-development costs include:
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Marketing costs; roughly $10,000 on average
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Sales; average costs between $5,000 – $10,000
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Maintenance; nearly 20% of the initial MVP development costs
Conclusion:
Therefore, an MVP could benefit a business in the short as well as long run. It’s crucial to the success of the final product. It gives the business sort of a heads-up about how the final product would be received by the targeted audience and whether it would work or not.
Thus, an MVP should be included in a business’s product plan and the limited features and functionalities chosen should allow users to fully experience the product in order to give constructive feedback.
Want to build an MVP?
Outsourcing the development of an MVP is the most cost-effective way to test an idea in the market.
As per reports, 78% of global businesses have positive reviews about their outsourcing partners. And there is a reason behind it. Outsourcing partners bring much-needed industry experience, expertise, and exposure, to the table.
Big Oh Tech is one such partner that believes in 100% collaboration, transparency, and optimal results.
Big Oh Tech is a leading name in MVP development services across India and globally. From initial ideation to prototyping, development, and release of the MVP, we assist our clients throughout the process and bring them closer to the achievement of their business goals.
With a bunch of creative thinkers, we aim to build a product that meets the market requirements and enables the business to gather constructive feedback that would facilitate the success of the final product. With our scalable solutions, start-ups and enterprises alike can test their products before going all in.
Test your idea with MVP today!
FAQs:
Q1.How much time does it take to build an MVP?
It usually takes 3-4 months’ time to build an MVP. However, it also depends on the complexity of the product, the tools and software used, and the industry it is being built for.
Q2.Why MVP is important?
MVP helps a business in the following ways:
1. It helps a business to test the idea in the market before committing to the entire product development cycle
2. Fundraising for a product or a start-up becomes easier when you have something to show to your investors. The latter could invest after learning the potential of the product in the market.
3. Polishes the product, making it more consumer-oriented and a good fit for the market.
4. It pushes quick release of the final product and helps the business earn its first users.
Q3.What are MVP development stages?
The MVP development stages are:
1. Begin with market research; conduct surveys and competitive analysis to uncover the market needs
2. Identify what value you would want to add in the marketplace with your product
3. Mapping out user flow; Lock on a design that is user-friendly and follow the user flow for clarity and accuracy in the entire development process
4. MVP features and functionalities are limited so choose them keeping user usability and utility in mind
5. Lastly, launch your MVP and wait for the feedback
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