The short answer to "How much does an MVP cost?" is: it depends—but you can (and absolutely should) budget intelligently.

Most business owners either wildly underestimate MVP costs ("Can't this be done for $5k?") or get paralyzed by worst-case scenarios they read online ("I heard MVPs cost $500k") The reality is somewhere in between, and with the right approach, you can control costs while building something that actually validates your business idea.

Below is a practical way to think about MVP costs, what drives them up or down, and how to avoid paying for the wrong things before you have proof your idea works.

Why Most MVP Cost Estimates Are Wrong

Here's what usually happens: someone gets a quote for "building an app" without defining what that app actually needs to do. It's like asking a contractor "How much does it cost to build a house?" without saying whether you want a studio apartment or a 4-bedroom colonial.

The key insight: MVP costs should be tied to the questions you're trying to answer, not the features you think you want.

If your biggest question is "Will anyone pay for this?" your MVP might be a simple landing page with a payment form. If it's "Can our AI produce good enough results?" you'll need to build the core algorithm and test it with real data.

Phase 1: Research & Planning ($2k–$10k)

This is the phase most business owners want to skip—and it's the biggest mistake you can make.

What you get for this investment:

• Product Statement: Who you're serving, what problem you're solving, and how you'll measure success

• Clickable Prototype: A realistic-looking version of your app that people can click through (built in tools like Figma)

• User Testing: 3–5 recorded sessions watching real people try to use your prototype

• Build Plan: Clear scope, identified risks, realistic timeline, and ballpark budget

Why this matters: This work often reveals that your original idea needs significant changes—better to learn that now than after you've spent $50k building the wrong thing.

Time investment: 2–5 days with a small team (typically a designer and a business analyst or consultant).

Real example: We once had a client convinced they needed a complex scheduling system with AI optimization. After user testing, we discovered their target customers just wanted a simple way to block out "unavailable" times. The original idea would have cost $80k to build; the MVP that actually solved the problem cost $12k.

Phase 2: MVP Build Budget (The 10% Rule)

Here's a practical rule of thumb that works across industries: budget about 10% of what the full product would eventually cost for your MVP.

• If the complete product would likely cost $200k, plan around $20k for the MVP

• If the full product is closer to $1M, the MVP could run $100k+

Why this works: The MVP proves your core assumptions cheaply, without paying for all the features you'll eventually need (multi-user accounts, advanced security, integrations with every possible tool, etc.). A well-built MVP can also be relied upon for your future releases and give a great onramp for getting to launch fast. 

Typical MVP Ranges We See: $20k–$100k

What pushes costs toward the lower end:

• Simple workflows (one main user type, straightforward process)

• Web-first approach (building native apps is costly)

• Using proven technology stacks, design patterns, and off-the-shelf tools

• Working with a focused, experienced team

• Clear scope and strong "skip list"

What pushes costs toward the higher end:

• Complex integrations (payments, real-time features, enterprise security)

• Multiple user types with different permissions

• Custom AI/machine learning components

• Aggressive timelines ("we need this in 6 weeks")

• Scope creep during development

Tip: Believe it or not, a lot of dev shops are willing to lower costs significantly when they like working with the client. Be a good person. 

Smart Spending Strategy: Stage Your Investment

You don't have to commit all the money upfront. Consider this approach:

• Commit to the first $10k–15k for core functionality

• Review results and user feedback

• Decide whether to proceed with the next phase

This protects you from sinking money into something that isn't working while giving the team enough budget to build something meaningful.

Phase 3: Infrastructure (The Hidden Costs)

Infrastructure is where many business owners get surprised. Hosting can be very cheap—or surprisingly expensive, depending on what you're building.

The Good News: Startup Credits

Most cloud providers (AWS, Microsoft Azure, Google Cloud) offer substantial startup credits—often $5k–25k worth of free hosting for new companies. Take advantage of these programs.

The Reality Check: Always-On Features Are Expensive

Simple websites cost almost nothing to host. But features like:

• AI chatbots that need to respond instantly

• Real-time collaboration 

• Video streaming or processing

• Complex data analysis

These can easily cost $5k+ per month even at a small scale.

Tip: Turn off anything that doesn't need to be always-on. Use simulations and manual processes where possible. The goal is to establish a realistic infrastructure profile you can defend to investors and customers later.

Realistic Monthly Hosting Costs for MVPs:

• Simple web app: $20–100/month

• App with database and user accounts: $80–800/month

• App with AI/ML features that aren’t time sensitive: $1k–5k+/month

• App with real-time features: $500–3k+/month

  
  

Understanding the Team Options (And Their Real Costs)

Option 1: Offshore Development

Pros: Lower hourly rates, access to large talent pools 

Cons: Coordination overhead, time zone challenges, communication gaps

When it works: If you can co-locate with the team (even briefly) or run very structured, short sprints with clear deliverables. We know many founders who move abroad to spend a month or more with their team—that on-the-ground energy you get working with the team is worth 10X the spend. 

When it doesn't: If you're expecting to hand off requirements and check back in a month. 

Without hands-on management, offshore MVP projects often drift and you end up spending more to fix problems than you saved on hourly rates.

Option 2: Domestic Agencies/Consultancies

Pros: Easier communication, proven processes, legal accountability, can often handle design and development. Ask for references and check their business records.  

Cons: Higher hourly rates, may have minimum project sizes.

Option 3: Hybrid 

Many domestic agencies manage remote teams, which can be the best of both worlds. 

Pros: Often more flexible, lower overhead costs, direct communication with people you can meet and work with, legal accountability.  

Cons: More people to manage, lack of clarity between teams about ownership, increased expenses for the U.S. team without assured value. 

Tip: Build a strong relationship with the local/domestic team and make sure they are accountable for all deliverables. 

Option 4: Technical Co-founder or CTO

Pros: Aligned incentives, long-term thinking, equity-based compensation 

Cons: Harder to find, still need design help, may not have MVP experience

Legal & Ownership (Don't Skip This)

Protect your investment from day one. These aren't expensive, but they're critical:

• Intellectual Property Assignment: Every contributor (designer, developer, researcher) must assign all IP to your company. Get this in writing before work starts.

• Access Control: Make sure code repositories, cloud accounts, and documentation are under accounts you control, not the development team's personal accounts.

• Documentation: Record key meetings and decisions. They become valuable product artifacts and protect you if team members leave.

• Equity Warning: Never "pay in equity" for MVP development. Development shops that want equity usually want outsized control over product decisions.

  
  

Real-World Budget Scenarios

*Note: These are directional ranges based on typical projects, not specific quotes for your situation.

How to Keep Costs Under Control

1. Define Success Early (And Stick to It)

Write down exactly what your MVP needs to prove. Every feature request should be evaluated against this goal.

2. Maintain a "Skip List"

Document what you're intentionally not building in version 1. Review this weekly and resist the urge to add "just one more small thing."

3. Work in Focused Sprints

Schedule blocks where designer, engineer, and business owner work together intensively. This prevents miscommunication and reduces back-and-forth.

4. Prototype Before You Build

Prove user workflows with clickable prototypes and Wizard-of-Oz tests before writing production code.

5. Stage Your Investment

Fund development in small tranches tied to clear outcomes. This gives you decision points to pivot or stop if things aren't working.

6. Right-Size Your Infrastructure

Don't pay for enterprise-level hosting and features until you have enterprise-level usage.

7. Own Your IP and Access

Ensure you control all accounts, code, and documentation. This protects your investment and makes it easier to work with different teams later.

Want a more detailed overview of the MVP development process? Read more here. 

Red Flags That Signal Budget Trouble

Here’s what to look out for when you’re exploring different options to develop your MVP: 

• "We can build anything for $X" - Run away from fixed-price quotes that don't account for discovery and iteration.

• No discovery phase - Teams that want to jump straight to building without understanding your users and business model.

• Pressure to decide quickly - Good teams are usually booked in advance and don't need to pressure you.

• Vague timelines - "It'll take 3-4 months" without clear milestones is a warning sign.

• Resistance to user testing - Teams that think they can design user experiences without talking to actual users.

The Bottom Line: What it Really Costs to Develop Your MVP

Most successful MVPs cost between $20k–80k when done thoughtfully. You can spend less, but you risk building something too simple to validate your assumptions. You can spend more, but you risk building features nobody wants.

The key is matching your budget to your biggest business questions, not your feature wishlist.

Remember: The goal isn't to build a cheap version of your eventual product. It's to build the smallest thing that can validate whether you should build the product at all.

Ready for a Clear Budget Estimate?

Every business situation is different, which is why generic cost ranges can only tell you so much.

Our MVP Strategy Session gives you a plain-English plan specific to your idea: what to build first, what to skip, potential risks, realistic timeline, and a detailed budget breakdown—so you can make informed decisions instead of guessing.

We'll help you understand exactly where your money will go and how to stage your investment to minimize risk while maximizing learning.

Schedule your free 15-minute consultation and get clarity on what your MVP will really cost—and whether it's the right next step for your business.