Sitemaps
How We Secretly Lose Control of Our Startups
Should Kids Follow in Our Founder Footsteps?
The Evolution of Entry Level Workers
Assume Everyone Will Leave in Year One
Stop Listening to Investors
Was Mortgaging My Life Worth it?
What's My Startup Worth in an Acquisition?
When Our Ambition is Our Enemy
Are Startups in a "Silent Recession"?
The 5 Types of Startup Funding
What Is Startup Funding?
Do Founders Deserve Their Profit?
Michelle Glauser on Diversity and Inclusion
The Utter STUPIDITY of "Risking it All"
Committees Are Where Progress Goes to Die
More Money (Really Means) More Problems
Why Most Founders Don't Get Rich
Investors will be Obsolete
Why is a Founder so Hard to Replace?
We Can't Grow by Saying "No"
Do People Really Want Me to Succeed?
Is the Problem the Player or the Coach?
Will Investors Bail Me Out?
The Value of Actually Getting Paid
Why do Founders Suck at Asking for Help?
Wait a Minute before Giving Away Equity
You Only Think You Work Hard
SMALL is the New Big — Embracing Efficiency in the Age of AI
The 9 Best Growth Agencies for Startups
This is BOOTSTRAPPED — 3 Strategies to Build Your Startup Without Funding
Never Share Your Net Worth
A Steady Hand in the Middle of the Storm
Risk it All vs Steady Paycheck
How About a Startup that Just Makes Money?
How to Recruit a Rockstar Advisor
Why Having Zero Experience is a Huge Asset
My Competitor Got Funded — Am I Screwed?
The Hidden Treasure of Failed Startups
If It Makes Money, It Makes Sense
Why do VCs Keep Giving Failed Founders Money?
$10K Per Month isn't Just Revenue — It's Life Support
The Ridiculous Spectrum of Investor Feedback
Startup CEOs Aren't Really CEOs
Series A, B, C, D, and E Funding: How It Works
Best Pitch Decks Ever: The Most Successful Fundraising Pitches You Need to Know
When to Raise Funds
Why Aren't Investors Responding to Me?
Should I Regret Not Raising Capital?
Unemployment Cases — Why I LOOOOOVE To Win Them So Much.
How Much to Pay Yourself
Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay
The R&D technique for startups: Rip off & Duplicate
Why Some Startups Win.
Chapter #1: First Steps To Validate Your Business Idea
Product Users, Not Ideas, Will Determine Your Startup’s Fate
Drop Your Free Tier
Your Advisors Are Probably Wrong
Growth Isn't Always Good
How to Shut Down Gracefully
How Does My Startup Get Acquired?
Can Entrepreneurship Be Taught?
How to Pick the Wrong Co-Founder
Staying Small While Going Big
Investors are NOT on Our Side of the Table
Who am I Really Competing Against?
Why Can't Founders Replace Themselves?
Actually, We Have Plenty of Time
Quitting vs Letting Go
How Startups Actually Get Bought
What if I'm Building the Wrong Product?
Are Founders Driven by Fear or Greed?
Why I'm Either Working or Feeling Guilty
Startup Financial Assumptions
Why Every Kid Should be a Startup Founder
We Only Have to be Right Once
If a Startup Sinks, Founders Go Down With it
Founder Success: We Need a Strict Definition of Personal Success
Is Quiet Quitting a Problem at Startup Companies?
Founder Exits are Hard Work and Good Fortune, Not "Good Luck"
Finalizing Startup Projections
All Founders are Beloved In Good Times
Our Startup Culture of Entitlement
The Bullshit Case for Raising Capital
How do We Manage Our Founder Flaws?
What If my plan for retirement is "never retire"?
Startup Failure is just One Chapter in Founder Life
6 Similarities between Startup Founders and Pro Athletes
All Founders Make Bad Decisions — and That's OK
Startup Board Negotiations: How do I tell the board I need a new deal?
Founder Sacrifice — At What Point Have I Gone Too Far?
Youth Entrepreneurship: Can Middle Schoolers be Founders?
Living the Founder Legend Isn't so Fun
Why Do VC Funded Startups Love "Fake Growth?"
How Should I Share My Wealth with Family?
How Many Deaths Can a Startup Survive?
This is Probably Your Last Success
Why Do We Still Have Full-Time Employees?
The Case Against Full Transparency
Should I Feel Guilty for Failing?
Always Take Money off the Table

5 Factors to Estimate How Much Your Mobile App Idea Will Cost

Alex Moazed

5 Factors to Estimate How Much Your Mobile App Idea Will Cost

Over the past six years, Applico has built over 300 apps, and I’ve learned a lot about how to find the perfect app developer at the right price. The primary driver of price is the cost of labor. For example, hiring offshore developers will be exponentially cheaper than hiring domestic developers, and an established firm will cost you more than a freelance hire.

Because there are so many different variables, the price for a mobile app could range anywhere from $5,000 to $500,000. The average price range will typically be somewhere between $100,000 and $300,000, and the entire development process takes about 12-20 weeks. It’s obviously a hefty investment, both in time and money. So in order to optimize your financial resources, here are the five key factors to consider when determining the appropriate mobile app development budget.

Your Priorities

It’s important that you be honest with yourself and your priorities. Finding a development firm to make a great quality app very quickly and with an inexpensive budget is a red flag. You get what you pay for. If it seems to be good to be true, then it probably is.

Let’s assume you want a quality app, which leaves you to choose between a larger budget with a shorter development timeline or a smaller budget with a longer timeline. My preferred development timeframe is no longer than 12 weeks. Your total timeline will be longer because you also need time upfront for design and product definition. If you want to use offshore resources and decrease the price, you should assume an additional 6-12 weeks will be added to your development timeline.

In-House vs. Offshore

You are hiring a developer because they know how to execute and execute well. The only way they will build a core competency in programming software is if they have resources in-house. Unfortunately, it’s pretty easy for a firm to say “Of course! All of our developers are in-house,” when that’s often not the case.

Ask who the specific team members would be on the project, and ask to see what past apps they have worked on. You can also request to talk to the resources and evaluate their communication skills. Although offshore development is significantly cheaper, hiring in-house engineers will make a big difference during your design phase; it will save you time and money down the road by bringing technical knowledge into the product planning.

Some firms will say all their resources are on-shore, when in reality, they may have their design resources locally and their development offshore. This is an easy way for developers to charge on-shore rates for development and get huge profit margins. By doing the appropriate due diligence on the actual team members, you can weed these firms out.

A hybrid approach can work in situations where competent, on-shore engineering teams can work on the most important parts of a project while using cheaper, third party resources for the more menial tasks. However, without a true engineering team on-shore, this approach won’t work. Technical project or product managers alone aren’t sufficient.

Waterfall vs. Agile

Waterfall development and agile development are the two most prominent methods to app development, but they’re vastly different. Waterfall development depends on having a clear documentation process laid out upfront, before the development process begins, and closely following that process. With agile development, there’s hardly any documentation before starting development. Developers work in one- or two-week sprints and figure out code as they go.

“Iterative development” is what we call a hybrid approach. There is some documentation upfront, like wireframes and mockups for key screens and functionality. But details and certain aspects are left to be figured out by the team during development.

With waterfall development, there’s little flexibility, but you know exactly what you’re getting and how much it will cost. Plus, with meticulous record-keeping of a structured project, it’s easier to improve the process in the future. But waterfall development can be difficult since it’s hard to know every single detail and nuance from the very beginning, especially for a larger or more complex project. The timeline here will inevitably be longer.

In general, the industry is moving toward agile development. The lack of initial structure can often make the project more expensive than initially planned, but it allows for far more flexibility to adjust the product and account for feedback and changes. With agile development, you can have incremental releases at the end of each development cycle, so you’re more likely to reach your launch date and get to the market faster.

Fixed Fee vs. Time and Materials

In a waterfall structure, you could set up a fixed fee for the work. You could spend X on design and documentation and then receive a fixed fee to develop your app for Y. However, it is inevitable that you are going to want to change something. Enter work orders. Are work orders billed at the same rates? How many of their projects have work orders? How much is the original contract versus the cost with work orders?

In an agile or iterative structure, you can be billed for the amount of work effort performed. The firm will provide you an estimate of the rates that you’ll be billed. If billed hourly, check to see if they have time tracking software and and if you’ll have access to review it. And if it comes to an invoice dispute, see if there is a process in place to handle the situation.

While a fixed fee structure may seem to limit your risk the most, I would suggest using caution. Your “locked in” price can be deceiving when you account for the total cost including future work orders. The ultimate goal is to get a great product that will accomplish your business objective, but the quality and caliber of a developer who works in a fixed fee structure can sometimes be compromised.

Estimate Creation

What’s the process of estimate creation?

Who made the estimate? Does that person have a thorough understanding of what you are trying to make? Have you talked to that person? Have they worked on similar apps and used similar technologies? If the technologies are foreign to them, it is easy for them to misestimate. Consider how actual costs have compared to initial estimates historically so you can better avoid any misestimation. To be safe, assume your developer will go 20 percent over budget. I hate to say it, but that’s the state of the industry.

Paying close attention to these five factors will help you get a better idea of what your app development budget will look like. The right app development won’t be cheap, but it’ll be well worth the cost.


About the Author

Alex Moazed is the Founder & CEO of Applico, the trusted advisor to disruptive tech companies with clients like Google & Highland Capital’s portfolio companies.

About Our Partner

BusinessCollective, launched in partnership with Citi, is a virtual mentorship program powered by North America’s most ambitious young thought leaders, entrepreneurs, executives and small business owners.

Find this article helpful?

This is just a small sample! Register to unlock our in-depth courses, hundreds of video courses, and a library of playbooks and articles to grow your startup fast. Let us Let us show you!

Submission confirms agreement to our Terms of Service and Privacy Policy.

Already a member? Login

No comments yet.

Register to join the discussion.

Already a member? Login

Create Free Account