Startups usually make it or break it in the first year. Therefore, it's crucial to start off quickly with a product that will draw in customers and create a niche market. That's where minimum viable products (MVPs) come in.
Specifically, Amazon, Spotify, and Uber all used this process to grow their businesses. This type of process allowed them to go to market quickly and use customer feedback to improve their services.
In this article, we'll explore what MVP development for startups is, its benefits, how you can hire MVP developers, and how much it'll cost you.
What Is MVP Development?
A minimum viable product (MVP) is the simplest version of a product released to the market with just enough features to satisfy end-users. It is a concept used primarily in product development, particularly in the technology and startup sectors. Frank Robinson created this term to describe a type of simplified product that requires the least effort before it can be put on the market.
Further, MVP development is a popular strategy that helps create and launch a new product that addresses its target users' core needs. This focused approach allows developers to gather valuable feedback early in the process. Consequently, this feedback guides further development, ensuring resources are used efficiently. By concentrating initially on the basics, the team can save time and allocate resources more effectively. They can refine and expand the product as they receive real user responses. Ultimately, this method ensures that the product aligns with market demands before making significant investments.
The Benefits of Startup MVP Development
Minimum viable products are a great solution for startups in particular because they bring the following benefits:
Create customer-centric products
The first benefit is that it creates products that fit the market by centring customers' feedback. Yet, a major reason startups don't succeed is poor market fit. Since this type of product development uses constant feedback to improve the product, it increases the chances your startup will survive. According to reports, the failure rate for this type of development is 30%—49%, which is at least a 41% drop from the 90% for all failed startups.
Quicken Arrival on the Market
Another advantage of this process is that it's faster than creating a product with all the features you think it should have. If you can launch a product in a shorter time, you may corner a part of the market, while your competitors may take months to create a competing product.
Test & Develop Ideas
This type of product development allows you to test and develop your business ideas. Since it's a small-scale process, it costs less and takes less time. Therefore, you have more chances to try ideas using the same pool of funds. For example, Amazon started operating in 1994, when many companies started selling online. Rather than starting the equivalent of eBay by selling everything, Jeff Bezos focused on a smaller niche with the potential to sell textbooks.
Furthermore, this product type allows you the time to make changes and develop ideas. Continuing with the example of Amazon, the company started selling more products, creating their own, giving sellers more options, and even creating customer tiers.
Attract Investors
Another benefit of this process is that it allows potential investors to witness how the market reacts to your product. When they see the potential for further growth in your product, they may invest in your company. For example, when Spotify launched in 2008, it was losing millions every year. Yet in 2011, the company received $100 million in funds, which will be around $1.4 billion in 2024.
How to Find the Best MVP Developers for Your Startups: 6 Steps Explained
Though a minimum viable product can cost less and take less time to create, that doesn't mean anyone can do it correctly. In addition, a poorly made product could damage your reputation. Therefore, you need experienced developers who offer quick software services, keep costs down, and have the expertise to deliver a successful product.
To find these potentially long-time partners in your product development, you should consider the following ways:
1. Refine Your Business Idea
First, refine your idea to find the right developers to build your minimum viable product. It will cost you less if you already have a clear idea of what you wish to create since you'll waste less time trying out products that don't fit the market.
When you're refining your idea, you'll need to establish the following:
Target End-User: You'll need to find who you want to use your product. This should narrow down the features you must include to satisfy their desires.
Niche: When you decide where your product fits in the market, you'll have figured out what it needs to compete with other products in its niche.
Timeline: You'll need to create a timeline for putting out the product. This will help you decide both the schedule and the product's scope.
Budget: The capital you can use to fund this product is also important. It will affect the scope of the product and the types of developers you can hire.
Intellectual Property: You'll need to consider how well you can protect the intellectual rights behind this product to prevent competitors from creating imitation products.
Though it's the first step, you should remember that you will rework it even after launching the product. In fact, developers you hire will rework it, and you'll receive feedback from your end-users that may require changing your idea.
2. Decide Your MVP Requirements
After you've refined your business idea, you should decide which features your product must have. While your product only needs to be usable, you should ensure it won't attract negative feedback from end-users. Therefore, you need to meticulously sort out which features you'll include and which you can offer in the future.
In particular, you should ask these interest groups for input:
Sales Agents: These staff and anyone else in your company who interacts with customers may have insights about which features your customers expect.
End-Users: You must include features that your end-users expect. Otherwise, you risk receiving negative feedback.
3. Research Possible MVP Partners
Once you've decided which requirements your product must meet, you'll begin your search for developers. You'll search for developers with the skills to use the technology and tools to create the features you selected for your startup MVP.
The roles you may seek to fill include :
Role | Duties |
|---|---|
User Interface (UI) Designer | They design the appearance and interactive elements of the software. |
User Experience (UX) Designer | They design how you'll interact with the entire software application. |
Front-End Developer | They create the interface with which the end-user will interact. |
Back-End Developer | They create the server side of the application, including the application infrastructure. |
Quality Assurance Developer | They test the software to ensure it's high quality. |
Full-Stack Developer | They design both the end-user interface and the server side of the software. |
Machine Learner Engineer | They develop algorithms to create models that can make suggestions and find patterns. |
Additionally, you should examine their reviews and compare their portfolio to ensure they have experience creating this type of product. Alternatively, you can request referrals from your staff and other startups.
4. Request & Evaluate Development Proposals
Once you've found a short list of developer teams that fit your requirements, you should ask them for proposals. Next, you'll go over the proposals to ensure that they explain their:
Understanding: The external team should show that they understand what problem you're trying to resolve with this product.
Services: It should be clear which services they'll offer to create your product.
Team: Their proposal should detail who they plan to work with.
Timeline: The proposal should include an expected schedule with minimum and maximum work hours for each developer.
Price: There should be a price range based on their work hours.
Moreover, you can use their speed and responsiveness to gauge how communicative they are. This will let you know if they're a good fit for you since you'll need a back-and-forth to create this product successfully.
5. Select an MVP Partner
Now that you've evaluated the developers' proposals, you should choose one partner. Rather than selecting based on who's fastest and cheapest, you should select the team with the proposal that most aligns with your idea.
Then, you'll request a contract, which you'll inspect. In particular, you should examine:
Terms of Agreement: You should ensure that the terms fit your expectations and that accountability and responsibility are appropriate.
Length of Contract: The period during which the contract will remain active should be clearly stipulated.
Price Range: There should be a transparent and simple price listing.
Project Warranty: The developers should offer a warranty for their work.
Delivery Schedule: The delivery schedule should clearly outline when they expect to reach the different milestones in this project.
6. Negotiate a Contract
Finally, you can meet with the developers and negotiate the contract. You should take this opportunity to ask questions to clarify details in the contract, such as intellectual property rights.
Then, you may sign it and hire a development team for your product.
The Cost of MVP Development for Startups
Now that you understand how to hire developers to create your minimum viable product let's explore the cost of this process. When you hire external developers to create your product, many factors affect their final price. Therefore, the final cost is highly subjective and can land between $10,000 and $200,000 per project.
To narrow down how much it may cost you, let's explore the different factors that affect cost.
Cost Based on Developer’s Experience
The first factor we'll examine is the developer's experience. As developers gain more experience creating software, their price increases to up to $200 per hour. They have creative solutions from years of experimenting, know how to use multiple tools, and are more likely to work faster. Meanwhile, a junior developer may set an hourly rate at $50 or lower. However, they may lack the skills to create a quality product quickly.
Here's a breakdown of different prices based on experience level:
Country | Cost per Hour Junior Level (0-2 yrs) | Cost per Hour Medium Level (2-5 yrs) | Cost per Hour Senior Level (+ 5 yrs) |
|---|---|---|---|
Mexico | $20 - $40 | $40 - $60 | $60 - $90 |
Brazil | $25 - $45 | $45 - $70 | $70 - $100 |
Colombia | $15 - $30 | $30 - $50 | $50 - $80 |
Furthermore, the technology they specialize in may increase their hourly rates. For example, an iOS expert may have higher rates than a Unity developer.
Cost Based on Developer Team
The type of developer team you select will also affect its cost. Generally, there are 4 ways types of developer teams you can select:
Type of Development Team
Factors | External Team | Hybrid | Freelance | In-House |
|---|---|---|---|---|
Cost | Medium | Medium | Low | High |
Risk of Plagiarism | Low | Low | High | Low |
Communication | Medium | High | Low | High |
Collaboration | Medium | High | Low | High |
Though a team of freelancers could create a product at a cheaper price, the issues linked to communication and collaboration make this a risky choice. Meanwhile, an external team from a software development company can mitigate some of these risks. If you wish to cut even more costs, you can use a hybrid of an external and an in-house team and save up to $50,000.
Cost Based on Developer’s Location
Since the developer's location affects their hourly rate, it'll affect the final cost. Usually, developers living in countries with higher living costs will set higher rates. Meanwhile, the cost will be lower in much of South America, Eastern Europe, Asia, and Africa.
To explore these differences, here’s a table of prices based on the location of the developer:
Region | Cost per Hour |
|---|---|
North America | $75 - $172 |
South America | $15 - $100 |
Asia | $25 - $50 |
Western Europe | $50 - $149 |
Eastern Europe | $35 - $76 |
Cost Based on Scope
The scope of this project will influence the cost. A simple product could take a team of developers 4 – 8 weeks to complete. This will cost in the lower range, perhaps even less than $10,000. Meanwhile, a more complex product could take 6 – 18 months and cost as much as $200,000, if not more.
How Divelement Can Help Startups with Their MVP Development Solutions
Creating a successful minimum viable product requires software development experts who understand the process and can manage tight deadlines and budgets. Outsourcing MVP development services from Divelement, a nearshore company, is the right solution to help you overcome the talent shortage and minimize hiring costs.
Divelement offers end-to-end software development solutions and develops MVP products that fit your market, prioritizing only the right features. Their developers utilize modern technologies and agile practices to develop your product. Typically, they can create products that clearly demonstrate their market value to early adopters across various platforms, including web, mobile, AI/machine learning, and cloud applications.
Leveraging MVP development for your startup helps you establish a strong market presence quickly and efficiently. By focusing on creating a minimum viable product, startups can test their ideas with real users without committing extensive resources. This approach speeds up time to market and reduces the risks associated with product development by ensuring the product aligns closely with customer needs based on actual feedback.
Furthermore, the process of selecting the right MVP developers requires a thorough understanding of your product goals, careful consideration of developer expertise, and effective communication to ensure the product vision is accurately realized.
With the best software developers, such as Divelement, MVP development can significantly enhance your startup’s chances of success. By demonstrating tangible progress and market fit, you can attract customers and potential investors.