My job is to estimate software development costs. That’s a little tricky, so I built a calculator to help. Try it yourself.
I put an earlier version of this on Reddit for feedback. A couple freelance developers responded with comments like, “You charge that much? I’d build an app with such-and-such features for a tenth of that price!”
This got me thinking.
Why pay more for app development?
The most frustrating part of my job is quoting prices to potential partners who are brand-new to app development. Talking to them is great: I get to meet new people, hear great new ideas and “get my nerd on” by explaining tech concepts. But, I can hear doors slam shut as soon as numbers leave my mouth.
Losing business isn’t what has me frustrated. I’m not a sales guy, and I don’t get paid a commission on new clients. The frustrating thing is loving great ideas and knowing Jane Entrepreneur is probably going to sell her great idea to the lowest bidder.
A low-quality development shop will quote her a ridiculously low price, take her money and then deliver a nonfunctional product, if they deliver anything at all. Jane Entrepreneur will lose not only her budget but her motivation to bring a great idea to life.
Are “savings” on development costs really savings?
The cost of app development covers a huge range. Freelancers and cut-rate code shops in India or Pakistan are among the cheapest options. Companies like MentorMate are comparatively more expensive.
It seems like an obvious choice: Why buy a BMW when a Corolla works just fine?
The answer is that Corolla is actually a lemon.
Try this simple test. Go to a freelancing site like Upwork.com. Post that you’re looking for someone to develop an app. Make it sound as huge, complicated and ambiguous as possible. For example, I made a posting with this as the entire description:
“I have a great idea for an app. I won’t share it without an NDA. It’s like Github meets Uber meets Yelp meets Amazon.”
Say that your budget is $500. Hopefully it’s clear that’s a very unrealistic amount given the lack of information provided, and the fact that Uber, Github, Yelp and Amazon were each built by a big team of full-time staff developers.
Within an hour of posting (34 minutes for me) you’ll probably receive your first “proposal” promising the moon and the stars ahead of schedule and under budget.
Where does the money go?
A freelancer or small dev shop doesn’t really have a brand to protect. If they have an unhappy customer, it’s unlikely their other potential customers will find out. They only take on one or two clients at a time, or are located in a different country with little regulation.
On the other hand, domestic development shops that engage with enterprise customers regularly build their business on their reputations. If we fail to deliver, lots of people will find out.
At MentorMate, we hold our programmers to high standards of performance, put every piece of code through rigorous quality assurance testing and assign a project manager to each client to serve as a responsive point-of-contact. This adds overhead costs in the short-term, but ensures that you actually get what you paid for.
With cheaper options, there’s usually just one person wearing all the hats: they’re the developer, QA engineer and project manager. The only standards they have to meet are their own. This saves money up-front, but saving money is no use if all you get is broken code.
In general, the less paid for app development, the greater the risk that expectations will not be met.
How do you get BMW development for a Corolla price?
The idea behind the Agile software development movement is instead of building a whole app all at once we first build a Minimum Viable Product. Your MVP is the most bare-bones your app can be while still having what makes your app unique. For example, Snapchat’s MVP was to simply send a self-destructing photo to someone else’s phone.
The MVP may not be what goes to market, but it’s incredibly valuable to investors. A person with an idea for The Next Facebook and nothing to show for it is a “wantrepreneur”. A person with a mildly interesting idea and a well-thought-out and well-executed MVP, however simple, is an investment opportunity potentially worth millions.
To go even cheaper, you can secure investment with three things:
- A very specific list of all the technological tasks and user stories necessary for your MVP, like an IKEA instruction manual for programmers
- Pixel-perfect wireframes
- A cost estimate
At MentorMate, we offer an early stage “Rapid Ideation” process that costs a fraction of actual development. For clients seeking investment, it delivers a rock-solid business proposal that can be sent directly to venture capitalists, and will save huge amounts in R&D and re-scoping when the coding starts.
How do you start?
Try out the cost estimator, and send me your thoughts through the form at the bottom. All submissions will go straight to my e-mail inbox. Is your estimate a little high? Learn how to slim your development costs. Great ideas deserve great development.