How To Bring an App to Market, Part 5: What Does It Cost To Launch an App?

When I tell people I develop apps, this is the typical response: “Oh, I have an app idea.” They spend about a minute describing it, then ask, “What it will cost to create?”

It may not surprise you that the answer is longer than a typical cocktail party talk. There are many variables. But here’s an overview that I can cover in the time it takes to drink a six-ounce pour of cabernet sauvignon:

Features and Complexity

It’s probably fairly obvious that the number of features and their complexity drive the cost, so spend some time identifying only the features that are required to deliver your core offering. In other parts of this blog series, we discuss how this strategy will reduce your development cost.

Platforms

Different platforms – Apple iOS, Android, web – have different cost characteristics. In general, iOS app development costs less than the same app developed on Android. Web apps are often the least expensive.

Some apps are quite successful on a single platform. Others must be on all platforms to be useful. Building for multiple platforms at the same time is the most costly approach. During development, your developer is not just coding the features, but is also getting feedback from you and users on what works and what needs to change. Developing for one platform first lowers those iteration costs. When you are 80% complete on the first platform, begin the second.

The Cloud

The cloud is used for persistent and/or synchronized data storage, such as when you want the same data to be available on multiple devices or on a device plus a web app. To tie data to specific users, you must authenticate them via the cloud. Other cloud services such as push notifications and social media integration are also useful features. All of these cloud services add cost to the project.

Developers

The proliferation of low-hourly-rate overseas developers comes with a host of problems: differences in culture, language, time zones; communication breakdowns; dubious security. Many who try this route regret it. In fact, many venture capital firms will not invest in projects developed overseas.

Even in the United States, you don’t always get what you pay for. Some large firms assign a product manager who sees your product from inception to completion. But if the firm has competing priorities, your team might be switched out – especially if you’re a smaller business.

With smaller firms, you can get to know your team and assess their quality. If they meet your needs, you will likely be working with the same people throughout your development project. You will be a big priority for them. Often you can get better pricing in this category.

Finally, a solo, independent developer can be a great fit for a proof of concept. But beware, even moderate projects require five roles: Project Manager, Product Owner, Scrum Master, Developer, and Quality Assurance. It’s impossible for a single person to hold all of these roles. So for anything but the smallest projects, consider augmenting the solo developer with additional team members.

Ok, But What Does It Cost?

Even apps without any server component or API integration can be complex and challenging. It comes down to the app’s feature set. With any professional firm where you can trust the result, you’re starting at around $25,000.

Apps with a back end and more complex feature set – including social media integration, user on boarding flows, cloud data storage or synchronization, push notifications, etc. – app development starts at around $75,000 and go to $250,000 or more. Again, start small and work with your developer to identify the minimum feature set that will enable you to get feedback from real users. Use their feedback to prioritize your budget and timelines. Time and effort spent there will pay off in both cost and quality.

While there are simple games, many games include asset creation such as sound effects, a sound track, and 2D and/or 3D animations. Developing games can be like making a movie, with a movie’s production budget!

Beyond the App

The cost of bringing an app to market goes beyond user interface, design, development, and project management. Be sure to budget for ongoing updates and potential server costs. If you’re providing app support, remember to pay yourself.

Now that you have your app, you need to tell people about it. Everyone hopes their app will ‘go viral’ through social sharing, and therefore cost little to advertise. But the reality is, while you can make it easy for users to share your app or invite others, having them actually use those features is impossible to engineer. So don’t bank on it.

Instead, consider that for the less expensive range of app development cost ($25K – $50K), you may spend as much marketing the app as you did to develop it. There are millions of apps available. Imagine your app as a book on a library bookshelf: how much would you have to spend to get people to walk into the library and ask for that one book?  That’s what searching the app stores is like. For mid-range and expensive apps, the marketing cost may be only 10-25% of development cost.

The Big Picture

Many people are drawn to creating apps because they see a consumer need and think of an app that meets that need. As businesses go, developing an app does not represent a large startup cost. But it’s also true that an average app will not pay its creator as much as a full-time job.

‘Hobbyist’ or occasional app creators do occasionally succeed in launching an app that augments their income. But as the old saying goes: “Hobby time invested equals hobby money.” The most successful apps fall into two categories: those that support an existing business, and those that are the business. The former are those that expand or increase the efficiency of an existing business, enabling it to engage with its customers in a new or more useful way. The latter are well funded, allowing for development iteration and significant marketing and operational costs.

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