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How much should your Minimum Viable Product (MVP) cost?

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Got a big idea for an app or a software product and looking at the costs of getting it developed? You’re at the right place. If you’ve already started looking around you would have noticed the huge disparity between what you’re quoted for the same project by different developers. Often the disparity is so wide that you wonder: are they even quoting for the same thing?

Well that depends – are you building a prototype or an MVP? This is a separate blog post in itself, but we will give you the TL;DR version: freelancers are likely to give you prototypes when you expect an MVP.

Saved by the brief? Not quite
But, then again if you give the developers a quick brief of your idea (via a call or a one-pager) they surely must be quoting for the same thing right? Not at all. Over our 14 years of experience in building digital products, we have rarely got a client brief so comprehensive that we could give a quote with zero assumptions. Most briefs are far too open ended and leave lots of room for the developer to interpret how the product should be built.

Don’t take our word for it. Here’s the average freelancer estimates for cloning some of the hottest apps out there today, as per Gigster a site for hiring freelancers for such projects.
IT companies in Sri Lanka
The folks at the TNW asked some of the top mobile and web development agencies for ballpark estimates for building bare bone MVPs some of the same projects and their quotes are below;

  • Twitter: $ 50,000 – $ 250,000
  • Facebook: $ 500,000
  • Uber: $ 1 million – 1.5 million

The difference should convince you that there’s more than cosmetic difference in the end result here.

Arriving at your MVP is a mini-project
What is your end vision for your product? What are the key assumptions that need to be validated to prove that this vision is reachable? The latter is the question your MVP should be designed to answer.

Depending on your budget you would need to decide if you are going for a throw-away MVP that will be discarded once there is a need to scale or a platform on top of which you can continue to add further features. To keep costs low you may want to use third-party tools, where you can. Such decisions invariably require some technical input from a CTO and sometimes a bit of research as well.

Finally, if experience has taught us anything it’s that a picture is worth a thousand words. It’s easy to miss out on key features when writing down bullet points for desired functionality. Such omissions can be costly and completely throw off initial estimates when they come up as change requests later. Creating designs or wireframes of the user interfaces, to visualize the implementation of your idea in detail is best done at this stage. Other than providing a crystal clear picture of what you’re expecting from the developer, visualizing your app idea is a good sanity check to flag logical inconsistencies and issues in the user journey within the app.

Sounds great, but just don’t have the time to do this? Talk to us and we can undertake this as a mini-project for you. Under this exercise, we will write a detailed technical specification document and create either finalized high-fidelity designs or wireframes for the whole system. By the way, this is first engagement we do with many of our customers.

Let’s crunch some numbers!
If you’ve read so far you must probably be curious to find out how much we at Calcey would charge to build an MVP. Let’s work this with an example of a simple app we all know about – Tinder, the dating app that’s been sweeping the world.

Here’s our estimates of what it would cost to build an MVP of Tinder.
Requirement elaboration with Hi-Fi user interface design and complete technical specification development: $ 7500 (3 weeks)
Mobile app (cost of building an iOS or Andriod app) with FB login, card swiping for liking/passing, matching, in app chat, setting discovery preferences and managing user profiles: $ 25,000

Administration backend (web app) with ability to ban reported profiles, real time dashboard of user behavior analytics and report generation (number of likes, matches per period/region): $20,000

For the above we are assuming that this app would be deployed globally with no localization. We are also assuming that this isn’t a throw-away MVP but rather a scalable, API based platform that can sustain several iterations of front-end and back-end improvement. Hence there is no limitation on the maximum number of users that the MVP can serve, but this would obviously be subject to the scalability of the infrastructure chosen.

Think we are expensive? Check out what others charge for MVPs.

In the end what ultimately determines whether you paid too much for your MVP is whether it transforms into a successful product/business. Here’s a few MVPs we built that crossed the chasm.

  • ImSMART: mobile sales and marketing collateral distribution solution for sale people to showcase marketing material on their iPads and Android or Windows Tabs, where the material is centrally managed via a Web CMS. Companies can gather detailed analytics about customer interactions during sales pitches via the app. ImSmart initially worked with Calcey to build their MVP several years ago. Today it’s a roaring success used by over 60,000 b2b sales personnel across 35 multinational firms including Agilent Technologies, Zimmer Dental and Shofu.
  • Stanford Leadership in Focus portal: An e-learning tool with video case collections business leaders talking about significant challenges they have faced, decisions they have made, and lessons learned from the experience. This content is used by academics, corporations and alumni who access this content from around the world through a controlled membership access portal.
  • Vertical Platform (VP) – An enterprise level content management solution. A high performance site can be easily configured and launched using VP. VP contains extensive set of modules including article management, lead deployment, HTML module management, page designer, form designer and page template management. All time consuming tasks are offloaded to a scheduler service. Calcey took over a prototype of this app and transformed it in to a highly scalable MVP. Today VP powers more than 30 leading lead capture marketplaces, including which has over 50 million products.

Want us to build your MVP for the next big thing? Let’s talk.


A prototype is not a Minimum Viable Product (MVP)

IT companies in Sri Lanka

It’s easy to confuse between a prototype and an MVP. Both are aimed at validation, but the target audiences and approach to development are quite different. As a digital products company we frequently come across startups who confuse between the two.

Know what you’re building
Are you building an MVP or a prototype? The purpose of a prototype is to demonstrate your idea to win over important stakeholders – like investors who will fund you to build the MVP. A prototype is rarely market ready. An MVP on the other hand is a bare bones version of your product that’s ‘just enough’ to get actual users to actually use it, and give you feedback. It also needs to have just enough functionality to test your overall business model.

For example if you’re looking to develop an Uber clone for hailing taxis, a simple mobile app that allows users to hail a taxi by tapping a button won’t do. The app would also need an interface for taxi drivers to sign up, a backend for admins to check on rides when disputes come up etc. Launching without these features would mean testing (or validating) only part of the business model or worse having a product that lacks viability in the market.

Do you really need to ‘build’ a prototype?  
Some ideas can be prototyped without writing a single line of code. Dropbox famously launched with just an explainer video. Published on Hacker News this 3 minute video gave early adopters a hint of the actual experience; enough according to founder Drew Houston for many smart people “to give feedback as if we were putting the product in their hand”.

Setting up landing pages is another great way to validate consumer interest in a product without developing complex software. Buffer went a step further and actually set up a landing page with pricing and packages to gauge potential users willingness to pay. Upon clicking on this section, a pop up would appear saying “hello, looks like you’ve caught us before we are ready. Enter you email and we will get back to you…”

Transitioning from prototype to MVP
Building a prototype is quick and dirty. If you’re a developer this might mean a few Red Bulls and late nights to hack something together, that will help you to research and validate your idea. If you’re not technical you may hire a freelancer to burn the midnight oil. Either way you will end up with a product that demonstrates your idea to friends and mentors, helps you to gather feedback and if you’re lucky win you some funding to build a MVP.

The MVP is meant for a wider audience. It may be minimal but it also needs to be viable. A SaaS app that takes forever to load or a mobile app that crashes regularly, aren’t viable in today’s market. The MVP also needs to see you through your first set of users. You may build a throw-away MVP, but this often costs more – in terms of time, money and lost opportunities. Rebuilding your core application, while also trying to scale it is no easy task.

Switching gears
All this means that the MVP requires a completely different approach to development altogether; one that follows industry coding standards to develop a product with satisfactory performance and extensibility to add new features on-the-go. Testing is needed to ensure that the end product works reliably and meets basic usability standards.

Once you launch your MVP to the market you will find that quick changes are necessary. If you’re working with a freelancer at this point, a single part-time developer’s bandwidth is unlikely to suffice. That is, if you’re lucky enough that your freelancer hasn’t delivered an improvised solution that takes the ‘viability’ out of the MVP.  Don’t believe this happens often? Stay tuned for a follow up post, where we will explain the material differences between an agency and a freelancer with the costs of each option.

Why does this matter? Nothing kills a good idea faster than a bad MVP.