How Much Did It Cost Spotify & Instagram To Build Their MVP?

The cost to build an app depends on a few factors. I’ve been able to condense this down to 3 important factors.

  1. The scope of functionality & features involved

  2. The development team you work with

  3. Lastly, your ability to simply explain to the dev team your concept. The more you complicate the concept, the likelihood the dev team is going to consider features you may not need.

Let's dive into the scope. This outlines a holistic view of the project, but the underlying factors such as core features, backend integrations, and operating systems will determine the amount of effort required to build the Minimum Viable Product (MVP).

Now what are core features? Think of the core features as the engine or the main purpose of the app. For example, Spotify's core feature when they launched their MVP was curating and building a library of songs to offer a wide range of options for a better user experience. Another core feature was the payment gateway to onboard paying subscribers or even a recommendation algorithm to keep the user engaged in listening to the next song.

While non-core features can be social logins, Spotify curated playlists, podcasts, or really anything non essential to the initial problem Spotify set out to solve.

It helps to brainstorm and think about the features, user stories, pain points you solve and the overall concept, so when shopping for a price it’s easier for you to communicate the features and functionality to the dev team.

When it comes to development cost, some agencies charge by the hour while others charge a fixed cost to develop. In our experience, founders we've worked with have learned to prefer the fixed cost. It may sound obvious but founders hear $50/hour or $150 per hour and think it’s cheap but those hours add up.

For the purpose of this article, I’ve researched two apps that many of us are familiar with - Instagram and Spotify. I’ve done a bit of research to find what it cost Instagram and Spotify to create their first MVP. In this article, we’ll go over the core features developed for the first version of their app.

Let’s start with Instagram. How Much did it Cost Instagram to build their MVP ? These numbers were pulled from public sources. Building an app like Instagram is rather complicated due to image-filtering features, back-end image loads and other essential core features.

Here are some of Instagram’s key features and the estimated hours

Between all of the features listed, total time to develop, debug and pass through quality assurance would be anywhere from 760-1230 hours.

Back then, it would cost somewhere between $300,000 to $500,000 to build an Instagram-like MVP over a six-to-nine month period for just one operating system. Fun fact, they actually just build for iOS when they started.

Now in this day and age, considering that a majority of the components can be found in libraries and made open source, this can cut development time by half. Furthermore, the development team you work with may have previously built apps that share these similar features thus expediting the debugging and integration time as they've already done this before.

You're probably wondering what all this means?

Well, in short, the cost to build an Instagram MVP could be in the range of a low $50k to a high of $150k depending on the development team you work with, the operating systems you choose to build on, the tech stack, the system architecture and most importantly the scope you create for the MVP.

Now onto Spotify

How Much did it cost Spotify to build their MVP?

Spotify is arguably the world’s favorite independent public music player. The platform is available across devices — from iOS to Android to desktops and laptops. It’s very Intuitive, user friendly, and they have found product market fit. The company was able to acquire 207 million monthly active users by Q4 of 2018.

The most basic features of the app back then include:

For this very basic feature set, you’d be looking at around $150,000 - $250,000 for 806-1279 hours of development work.

In reality, the major cost in building a Spotify-like app involves music licensing and hosting. If you were planning on building a similar app, it may be more cost effective to go the SoundCloud route, where users upload their own music, which doesn’t need licensing fees.

Now onto the development team you end up working with. This determines the success of your idea. You want to ask yourself these questions:

  1. Do they understand the vision?

  2. Can they identify roadblocks with the idea and offer suggestions to bridge the gap?

  3. Do they have experience building features similar to the concept?

  4. Are they a US based company or offshore?

  5. Is it a one man team or a team of devs?

Now as a founder, you should challenge your ideas. Begin to ask questions to see if you've thought through some key milestones or hurdles that may bury the idea where it stands.

This is an exercise you should do to find gaps and help you brainstorm to find solutions.

I personally have run ins with clients that haven't throughly thought through ideas and this is common because they're at times not domain experts nor developers so they have blindspots they're unaware of. An example of this was an app I worked on called Cashlivery. It’s essentially DoorDash for cash. Unfortunately, Apple rejected the idea while Google play approved it.

Now, this app has 4 primary users with their own set of core features. We identify these users as personas. They are the sender (sending cash), the agent (delivering the cash), the recipient (receiving the cash) and admin to manage users and release funds from escrow after a successful delivery. Unfortunately, we didn’t think through the legality or app store policies during the brainstorming stage. We had tunnel vision in trying to find weaknesses, limitations and capabilities within the concept that we didn’t for a second think we were violating Apple's policy. This was flagged and rejected for legal violations. Now, we quickly went back to the drawing board and iterated the iOS app to meet apple’s policy and get approved.

As for experience building similar apps, you can ask the dev team to send you some of their latest work. You also want to ask the developers what modules of the app they specifically worked on. What was their main focus? Did they work on the front end, backend or were they the project manager? Having experience building similar apps should save development hours as they’ve already familiarized themselves with the concept, APIs required, functions, libraries and other factors.

Most important cost factor of the development team is their location. Are they a US based dev team or an offshore dev team. From my personal experience, I get 2-3 new clients per month that come to me with not only bad experience but also a bad build. They’ll reach out to our team asking if we can take over their project after an offshore dev team they’ve worked with over the months couldn't deliver.

Many clients do this to save cost initially. But in reality , they end up spending more with this approach. In many cases, after going through the source code I have to inform the client that we're unable to work with what’s provided as many offshore dev teams don’t build native apps nor use the latest methodologies, libraries or version of an SDK. Native apps mean that the developers are building the app specifically for that operating system whether it be iOS or Android. Over my years of experience I’ve found hybrid apps to be relatively unstable, offering a poor user experience and more. Not to mention that in some cases, you can’t implement features that give a native touch or feeling to the user experience.

Lastly, your ability to explain the idea clearly and concisely. I can write a book on this, but for the purpose of this article, I'll keep it short. There are a few action items you should put together prior to speaking to a developer.

  1. What’s the core problem you’re solving?

  2. What features are required to solve these problems?

  3. What’s your revenue model?

  4. What features are required to implement these revenue models?

  5. Who are your users and what are their use cases?

  6. What features are required for your users to engage with the app?

Use these questions as a roadmap to arrive at the features required to build your MVP.

Now all of this that i’ve unboxed was to determine what it'll cost to build an app in 2022. This cost obviously varies from concept to concept, the devs you work with and your ability to explain your concept clearly. To make this easier for you, I've developed an app cost calculator.

The calculator will ask specific questions to understand what features are required. Go ahead and find out how much your MVP will cost to build.

Hope this information was helpful and that you walk away from this article learning a thing or two about starting the next big thing. If you’d like me to cover a specific topic or answer any specific questions, leave your comments below.

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