The question of reducing the costs of software development has always been crucial for startups. Among all cost reduction strategies, building a minimum viable product instead of a full-fledged one is considered to be the most effective. Even though building an MVP entails considerable expenses and additional risks, it gives you a chance to minimize your expenditures as well as to test fast the business model leading to minimize possible mistakes and failure on part of a startup.

In this article, we will describe several tips on how to develop MVP within minimal possible costs but with an acceptable quality level.

What are the factors that drive the costs of software engineering?

Before we proceed to ways of reducing software development costs, let’s first consider the factors that influence the costs of developing software.

Feature set

A functional feature set lays the foundation for a software product and is incredibly important when determining the overall cost of software development. It's been suggested that your MVP have minimal features to get valuable feedback from customers as soon as possible. However, more features may require additional effort and add to the overall cost of development.

While an MVP is not a prototype, you need to remember that it does need to deliver some kind of value in a way. This may be done mostly by offering your audience something rather than selling them something. At this stage, an MVP’s goal should be much less about money and much more about collecting information to better understand what your customers want or need.

User experience and user interface design

User experience (UX) and user interface (UI) design are crucial for customers’ engagement with your product. The UX defines how well your app functions, whether or not it’s easy to use, the response time for commands sent to the product and so on. The UI, in turn, helps your users see how well you present yourself as an individual business and sets you apart from any potential competitors out there.

The cost of your MVP greatly depends on how many design elements are made into actual pages. More complex such as 3D modelling or motion design will cost you higher than only simple illustration or animation costs.

Software complexity

When creating a new software product, it's important to consider the multiplicity of devices that your audience is using. Will you build an android app and an iPhone app? Both? What about a website? How do you plan for your users to interact with your product and how will they be able to access it to maximize its use? Building mobile apps is more affordable than building websites though so if you have a limited budget but want to reach as many potential customers as possible through a variety of channels, start here!

The price of software engineering also depends on how many external integrations (for example, with third-party payment processors) and internal integrations (such as with CRM and HR systems) your software product will need to integrate with.

During development, the novelty of the software solution plays a huge role in your project’s budget. However, creating an MVP of a marketplace or another type of software that already exists can be a regular and comprehensible task. Meanwhile, developing an MVP of a one-of-a-kind application that has no analogues is much more challenging. A lack of clarity or even knowing how to implement your product’s functionality can require many resources during research and the creation of the prototype.

Team

An optimal team is essential to avoid increasing software development costs. It may seem logical that hiring more project experts speeds up software development, but it’s not necessarily always the case. More project experts participate in your development process and communication becomes harder to manage, resulting in inefficiency and delays. Communication and the lack of efficiency, thus, increase the final cost of the development project.

How to reduce software development costs?

Now that you know the aspects that affect the costs of developing an initial prototype, let's look at ways to reduce certain expenditures.

Prioritize features for your MVP

When developing your MVP, it's important to recognize that not all features are created equal. Core features of your product are crucial to its function and success. These are things that really need to be implemented for your product to work and be valuable to users. In contrast, nice-to-have features can boost a user's experience but you don't have to include them if they snuck into your project scope during the planning phase.

A good example of this kind of product feature prioritization is when building an MVP for a taxi app like Uber. Some features must be included in the first release of the software, such as permit drivers to call cabs and pay for the ride. Splitting fares is not a mandatory feature amongst those requirements and can be released at a later date. Building more features than are required for an MVP often leads to higher costs because each additional piece of software requires development time and resources.

As startups build their MVP, a useful method to determine what features your product will offer for its customers is Customer Development. This involves forming a product hypothesis and validating it by conducting initial interviews with potential customers. These kinds of brainstorming sessions are a great way to gather support from fellow team members to shape different facets of your organization’s business model.

You can rank each feature based on the level of demand relative to other features. For instance, you can use figure-based techniques such as the Pugh Concept Selection Matrix shown below to classify every potential feature for your taxi app:

Use design systems

Since design matters for your software project (since it is often the key mechanism that can affect the success of the product), investing in UI/UX design resources can be somewhat scary. However, design systems are available for those at large and offer ways to streamline the design process significantly.

By applying a design system, you're decreasing costs by having pre-made HTML/CSS GUI's developers can edit for product use, or simply save up on developing the tool altogether by choosing one from an outside vendor who offers such services!

Start testing as early as possible

Engaging quality assurance (QA) specialists at the early stages of your MVP development helps you significantly cut down software development costs. For instance, when creating product requirements, QA specialists can identify incorrect or contradictory requirements and prevent the appearance of numerous bugs caused by them at subsequent stages of your release flow.

Otherwise, your team will design and engineer your solution using requirements that have not been tested. This may result in buggy functionality, which would entail extra hours of rework and bug fixing and incurs additional costs. One of the best ways to prevent falling victim to this situation is to involve test engineers from the beginning as well as during each development stage of your company's project.

Opt for cross-platform development

Building two separate versions of your application can be expensive because you have to pay for two teams of software developers. So in case, your target market includes users from macOS, Windows, Linux and other operating systems you might want to look into cross-platform development tools like React Native and Xamarin. A good option for UI software development is the Flutter SDK which allows creating just one app that will operate on Android, iOS as well as on desktop and web platforms.

Creating a cross-platform app is a great way to save your development costs. But it also helps you reduce maintenance costs and efforts when you only need to make any changes to an application’s codebase or interface. And so, if you’re looking for a more financially efficient option, investing in this strategy comes with many benefits in the long run!

Use open-source solutions

Open-source projects use the power of collaboration to simplify software development.

By providing a platform where members can share working components of code, they can be used to build upon one another and form an incredibly powerful resource for app developers. Take for example Distinct Clouds, the server-side framework with over 165,000 ready-to-use elements called gems that anyone in their programming community can use to create or customize code.

One of the most popular JavaScript libraries - React - now has over 1,500 contributors on GitHub, a platform that allows anyone to become involved with software development. Open-source frameworks and libraries such as these are extremely helpful in your work as a project manager, since they allow developers to avoid coding functionalities from scratch or having to hire extra software engineers. This makes it possible for you to have your team create much better products and prototypes more quickly!

Use a backend as a service solution

Backend as a service (BaaS) solutions can help you save time and resources to build the server-side of your application. With BaaS, you can free up your own personal resources and devote them to creating a high-quality client-side that's what your end-users see and interact with!

BaaS solutions help bring in components that are commonly used in most existing applications without reinventing the wheel and help ensure certain default behaviors that ensure cross-browser compatibility. The app components that most BaaS providers usually take care of include:

• User authentication
• File storage
• Databases
• Infrastructure
• Email and/or push notifications

Choose a suitable project management approach

To guarantee your product development process remains consistent and efficient, it’s crucial to choose the right project management methodology for your project.

Among the most popular and widely used project management approaches are Waterfall methodology, Agile, and Lean. The waterfall can get the product created faster because there's a clearer idea of what is expected in every stage of development.

However, if you want to pull profits sooner than later out of your new venture then it's better to employ Agile or Lean methodologies for organizing your project. To make the right choice for your business needs, examine the principles and main aspects of all three before choosing an approach that works best with your project.

Set clear tasks

To ensure an efficient software development process, your team members need to be thoroughly briefed on their duties. Similar to the steps of a recipe, which begin with gathering ingredients and end with the creation of something delicious that you can then feed others.

Step 1. Shape the product vision

The first step is to provide yourself with the big picture. You should be able to fully explain what the purpose of your project is or who exactly it's aimed towards. To better understand your own intentions, you may have to reflect on what made you start work on it in the first place and why those ideas are inspiring and worth working on. It might be a good idea to make a vision statement that describes what your product is about in terms of its primary features and outlines possible ways that specific aspects of the solution could be applied for certain communities such as students or professionals etc.

Step 2. Build a business model

The next step is to make a business model that shows how an operation helps your product or service work in the market. Your team should be provided with a blueprint that shows how their services will come together to give people what they want and need as well as the reasons why they need it. It’s also important to show what separates your product from all others in the marketplace, who you intend to sell it to, where you plan on selling it, and all the hard data – the facts - related to everything mentioned above.

Step 3. Establish goals

Your team needs to have tangible goals for each piece of your project. This allows the whole team to not only have a common goal in mind for a specific stage but also receive feedback on the engagement level and any necessary addition or changes they may need to make on their end towards completing their tasks.

Step 4. Present the expected results

As an entrepreneur, you want to easily convey how your product will work and what it should look like. Spec documents help bring all of the people that work on your project on the same page and communicate to everyone expectations from your final product. Since they're fairly easy to read, it seems more likely candidates for your project will also be able to understand them with ease.

Step 5. Define tasks to be completed

At this stage, you should break your project into smaller tasks to be completed in succession. To ensure the utmost clarity, each project task should have a definition of ready (DoR), a definition of done (DoD), and acceptance criteria for both the DoR and DoD or simply end-to-end criteria.

• Defining what is a ‘Ready’ state can be of great help to you, the project manager. The DoR states all the requirements that must be met before taking on a task using a previously agreed upon checklist with goals and features outlined clearly for every member of your Product team involved in defining the requirements, functionalities and expectations before starting any task or story.
• The definition of done (DoD) is a finite list of actions that must be completed before a task can be deemed complete.
• Acceptance criteria are very necessary and will greatly help project managers, product managers as well as developers to understand the standards by which a task output is considered acceptable.

These five steps make sure you manage your tasks in an orderly and clear way, making transparency a big part of the operation.

Outsource development

Outsourcing is quite useful if you have a small company and are strapped for cash! And unlike in-house employees who cost a lot of money to hire, manage, and pay wages, outsourcing essentially eliminates those costs.

But before delegating your software development tasks to third-party vendors, you'll need to decide between outstaffing and outsourcing since there are distinct differences between these two models.

With outstaffing, an intermediary company assumes responsibility for all aspects of finding the personnel as well as paying them directly and communicating with them about whatever project-related matters.

Hiring outstaffing specialists is a convenient way to expand your existing team or complete tasks on a small project without recruiting and HR-related expenses. Recruitment, training, and oversight for this dedicated freelance worker fall squarely on you as the host company. The responsibility for the success of your project and timely delivery of the software product is also on your shoulders.

Outsourcing helps you solve challenges. It allows you to set goals for the team and ensures that they’ll develop products according to your technical specifications. Although a more expensive option, this is optimal for startups that don’t have enough technical product development experience.

When outsourcing development you can rest assured that your project will be in good hands. You'll find high-quality candidates, evaluate their experience and skillsets, and choose the right team for the job! Doesn't matter if your company has grown massively over the past few months, or if you're a solo developer with too many client projects at once - companies like Toptal will work closely with you to assign just the right number of people to fit into your budget.

Wrapping up

It's a common misconception that price and profitability are directly connected. But, if you follow these best practices when you're creating an MVP, you can actually create a high-quality product that delivers real value to users without passing on too much stress and burnout to your team through increasing costs.