• Noah

Why Is App Development So Expensive?

Updated: May 15


I get this question a lot, and it often comes from prospects that have shopped around for app development and have been quoted in the six or even seven figures. That's crazy. Why is app development so expensive? Luckily for them we charge a fraction of what most development agencies ask.


The easiest explanation is that apps are much more affordable to build than before; it's the engineering and design talent that's expensive. If you look in the App Store, you'll see over a million different apps. These were all built by independent developers and agencies, yet the bulk of these apps will never earn a penny.


Using Hundreds of Developers

Solo developers typically don't build these apps; instead they're built by teams of developers and designers. These teams range in size from a nimble three-person team to a large enterprise organization that employ hundreds of engineers.


Seriously: hundreds of engineers. Facebook, Google, Twitter, FitBit and many other tech giants have teams numbering over a 100 people, often all working on a single mobile app.


Teams this large aren't typical, but it is important to understand that there is a lot of work that goes into making products that on the surface, may seem simple.


You might be thinking, "OK, but my mobile app doesn't need hundreds of engineers." It's true that most apps don't need hundreds of engineers, but most apps do need at least a small team of experienced engineers, designers and product developers to produce an MVP that is competitive, solves problems and will generate true business value.  It's common to have between three and ten people working on a single platform app. These would be a designer, product developer, project manager, front end developer, backend developer, manual QA, automations engineer just to name a few standard team members working on a platform.


The typical timeline for an initial project is often four to six months. Much like building a ship, you'll end up doing architecture, schematics, design, building, testing and launching.


Doing the Math

At this point, the math is pretty simple. Labor costs are the No. 1 driver of cost. Look up the salaries of top developers and designers in your region, and you'll likely uncover an annual range of anywhere from $60-150K for most of these roles. Multiply your average salary by team size to determine your annualized product design and development costs.


Your annualized costs are often a good reflection of the true costs of building a product. Even if the initial version of the product takes three months and not six months, it's common for product teams to continue to improve the product and further drive revenue and key metrics for the core business.


Driving core metrics of the business is the reason why companies have the larger product and engineering teams. An improvement of one-tenth of 1 percent is still a million dollars in the upside. Larger businesses are simultaneously driving multiple new product feature initiatives that each aim to impact business's bottom line.


Deciding Whether to Build or Buy

At this point, you have an annualized expected cost, and you may be thinking, "Should I try to hire people in house or look for a dev team to contract?" Great question. This often comes down to a question of timing and core competencies. For companies that consider themselves to be technically savvy, it may make sense to try to build the technology in-house. The biggest challenge we've seen with an in-house strategy is hiring and staffing the appropriate level of engineers and designers to the effort.


For companies that aren't technically savvy, there's a second challenge, and that's retaining talent once you've found it. Non-tech companies often experience high turnover when it comes to tech initiatives. This is often due to the fact that the culture and speed of a non-technology company may inhibit tech organizations from getting things done quickly. 


We've seen new clients that ask us to maintain their existing app as the last development team they worked with couldn't continue making the updates and version control across future versions for many reasons. In many cases, we have clients that are not tech savvy and we walk them through the entire software development cycle from design to development to updates and then onwards to marketing and user acquisition.


Looking for the Best of Both Worlds?

If you want to have your cake and eat it too, there are limited options. We've helped many startups by doing the heavy lifting; building their MVP and operating within their startup as an extension of their development team. We'll not only build the platform but we also help you strategize and implement a go-to-market strategy.


The one thing we advise starups and founders is to product shop and not price shop. When you're product shopping, you're looking for a team with quality projects and years of experience. Meanwhile, when you're price shopping, you're looking to pay the least amount for a team to build your platform, however, what you're really doing is sacrificing the quality of your product.


In our years of building mobile apps, we've seen it all. We get about 2-3 new clients monthly expressing their frustration of working with a development team that was cheap only to have spent thousands of dollars and several months only to start at square one.


At the end of the day, I've found that it’s about moving the needle for your business, and finding a team that can deliver is the most important part of growing your business for the mobile generation.


NEXT STEPS:

If you're ready to start discussing your big idea and moving into a strategy session to discuss your features, functionality and use cases contact us.


We're a seasoned dev team that have worked across several different verticals and are always happy to find the next big thing to work on.




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