An MVP is a bare-bones version of your product with only the core features included.
It’s the best idea validation tool and will show you if there’s market demand for your product.
And it’s much cheaper and less risky to build an MVP than a full-featured product.
And that’s why you should do it.
How to reduce these costs
Build a minimum viable product (MVP) – building an MVP will help you get your product to market faster and reduce development costs
Feature prioritization – make sure that the features you add actually meet your users’ needs and add value to your product
Use third-party solutions – if you use off-the-shelf solutions wherever you can, you’ll spend a lot less money than if you build everything from scratch
Size and experience of the development team
A good, well-balanced development team is essential for successful software product development.
But, the size and experience of the team is a major cost factor and can seriously affect your budget.
A larger team can work faster but increases the overall cost, while a smaller team might be cheaper but will take longer to develop your product.
An experienced team will also work faster and make fewer mistakes – but that expertise will cost you.
Glassdoor estimates that the average salary of a senior software engineer in the U.S. is $195,000 per year.
So, what are your options when hiring a team?
The first is hiring a whole in-house team – but keep in mind that just hiring and onboarding come with a lot of added costs.
According to SHRM, the average onboarding cost is $4100 per new hire – so, just onboarding a team of 5 engineers will cost you $20,500.
The second option is hiring a group of freelancers to work on your product.
This is a much cheaper option but it has major downsides like the difficulty of coordinating them and quality issues.
And that’s why hiring a dedicated team is the best option.
The right dedicated team will feel just like an in-house team and it’s cheaper than hiring an in-house team and more reliable than hiring freelancers.
And the best part?
When you hire a dedicated team, you also gain a long-term development partnership.
And that’s why it’s the best option.
How to reduce these costs
Use Agile methodologies – Agile methodologies like Scrum or Kanban will help you better manage your team and speed up development, which will reduce development costs
Hire a dedicated team – hiring a dedicated team is cheaper than hiring a full in-house team and more reliable than hiring a bunch of freelancers, so it’s the most cost-effective option for the long-term
Effective project management – effective project management is essential if you want to speed up development and cut costs
UX/UI design complexity
Your product’s user interface (UI) and overall user experience (UX) are critical to its success.
And investing in UX and a good design is a no-brainer – for every $1 invested in UX, you get a $100 in return.
In other words, a tech stack is the toolkit your engineers will use to develop your product – and you want them to have the right tools for the job.
A number of different factors will influence your choice, like:
Your product’s platform
Your requirements
The project scope
Your team’s expertise
Also, it’s a good idea to choose tools and frameworks that support faster development.
For example, if your team uses React (front-end web development) and Flutter (cross-platform mobile development) they’ll be able to build your product faster.
And that can save you a lot of money.
But, the easiest way to cut those costs is using tools and frameworks your team is most familiar with.
This way, they can start immediately building your product and do it faster.
And that’s key if you want to cut costs.
How to reduce these costs
Use open-source tools – open-source tools, libraries, and frameworks are free to use and often have large communities behind them, so using them can significantly cut development costs
Use cloud services – cloud services like AWS and Google Cloud charge on a pay-as-you go model, so they’re much cheaper than physical infrastructure
Focus on cross-platform tools – if you’re building a product for multiple platforms (iOS and Android, for example) focusing on using cross-platform tools like React Native or Flutter is a cheaper option than 2 native apps
Product maintenance and updates
Regular maintenance and updates are key for your software product’s long-term success.
They will keep your product functional, secure, and relevant in a highly competitive market.
Corrective maintenance – finding bugs and errors post-launch
Adaptive maintenance – updating your product to work with new hardware and software environments
Perfective maintenance – improving features and performance based on user feedback
Preventive maintenance – updating security measures and optimizing code
As a general rule, you should budget 20% of your initial development cost for maintenance annually.
That sounds like a lot, but you also get a lot in return.
One great benefit is an improved user retention rate – 90% of users stopped using an app because of poor performance.
Regular maintenance and updates will stop that from happening to your product.
And that’s why it’s so important.
How to reduce these costs
Start testing early – if you start testing early, you’ll catch bugs and issues early in the development cycle which will significantly cut maintenance costs
Invest in continuous monitoring tools – using continuous monitoring tools will help you proactively address your product’s performance issues
Use automated testing – automated testing tools like Appium and Selenium will help you find bugs as soon as they happen and reduce your time and labor costs
The pricing model
If you’re hiring a dedicated team from a software development vendor, one major cost factor will be the pricing model you agree on.
Ante is a true expert. Another graduate from the Faculty of Electrical Engineering and Computing, he’s been a DECODEr from the very beginning. Ante is an experienced software engineer with an admirably wide knowledge of tech. But his superpower lies in iOS development, having gained valuable experience on projects in the fintech and telco industries.
Ante is a man of many hobbies, but his top three are fishing, hunting, and again, fishing. He is also the state champ in curling, and represents Croatia on the national team. Impressive, right?
