Q: “How much does an app cost?” A: “About as much as a car.”
blog.darwinapps.com
blog.darwinapps.com
Big companies can't risk going with a freelancer (who might go out of business or be booked when they need updates) so they put out an RFP to software firms.
A month or so of upfront design (wireframes, screen design, user stories). Another couple of weeks of iterations to get signed off by the branding/marketing group.
The development will need a team, four developers is about right (we need to get this app out fast in the ever-changing mobile landscape). We'll need a manager at half time and a team lead to handle client meetings. Throw in a dedicated test engineer (so many phones to test on these days...) and a month for formal test plans and execution (did we mention this app might be audited? test plan is 500 pages).
Make sure it is localized as well - we are a global company with global customers, all of whom we value. We also don't want to be sued, so we'll need a EULA screen that the user must accept. And a help page. And a way to register on our site.
Oh yeah, the way our budgets work, we've only got one shot at getting money for this app - can't do a minimal release and update it after it's in the store.
Conversative costs for an app in the OP's "BMW Tier":
One month upfront design at $100/hr (1 designer, 1 dev): ~$30k
Three months of development at $100/hr (4 dev, 1 test): ~$250k
Three months for PM at $150/hr (0.5 PM): ~$40k
One month formal resting at $100/hr (1 test): ~$15k
Monthly maintenance/update 20hr/month (1 dev): ~$25k
Total: Over $350,000 for the version 1.0 of your mobile app (on a single platform)
I'm sure someone else can come up with witty analogies for apps, but I think the model holds. Outsourcing the development of an app costs as much as a car, for some value of car. You get what you pay for, and the things that cost a lot at the high end aren't immediately obvious to people not in the business.
Way under seems like a bit of a stretch. The average developer salary is $92,000 per year, which works out to around $45/hr if we assume a standard work week. The rule of thumb is that you need double or even triple of what you are paying your employees in order to be able to afford to employ them. Even if you are the business owner and employee, you still need to recoup the costs of running the business for yourself so the math remains the same. It seems the bare minimum you could charge for the average developer is $90/hr, which is just shy of the $100/hr. quoted. Above average developers will require much more per hour.
You could, perhaps, charge way less if you hired below average developers, but that seems to fall under the first category and not the one the parent is referencing. This, of course, assumes that you are operating in the USA. Numbers may differ in less costly parts of the world.
So basically most above-average developers in US (and areas with similar wages / living expenses) would charge at least $100 per hours.
Your point about developers in countries with lower living expenses than the US is valid. But that would also depend on the customer being in said country.
As a freelancer, you might be able to get away with $70-$80/hr minimum, but $100 minimum still is easily within a reasonable price range.
I would expect a fair market rate for great developers to be something more like $150-$200/hr. Unfortunately, I have a hard enough time getting clients around here at $100, but in order to really have the business firing on all cylinders, I would need to be charging $150+ for each developer hour.
The margins at $100 and below are barely enough to make payroll; there is almost nothing left to pay for things like significant marketing or PR, investment in equipment or facilities, loose time to spend on internal projects or internal maintenance, etc.
Entry-level developer jobs (i.e., BS in CS) pay $40k-$60k in the midwest.
Though entry-level developers are even more costly to employ. They require more training, more time to solve problems that are old-hat to experienced developers, etc. You still need to bill them out at, say, $100/hr. with the expectation that for every productive hour, they have an unproductive hour that isn't billable.
If you can find a guy like that, and if he can write maintainable code, all "way under" $100/hr minus designer's salary, you've struck gold. People like that are extremely rare.
It would need to be written to be optimizable.
I would argue that the majority of the easy apps are done. Anything more complicated than a fart app will require profiling and optimization. It's easy to forget that iOS and Android are embedded systems with a finite amount of resources.
They each then make $7500 a month...multiply by 2 (2 guys working for a month) = $15k. 2 Months = $30k.
Either way we're still in Hyundai Accent to Honda Accord range there, and the hourly rate is a bit over $40/hr (or $80/hr for both guys).
So you are right that it can be done for under $100 per hour. But it still costs about a car.
More realistically,
If you estimate it out the right way, benefits and all included, you start to climb up the hourly rate scale very quickly. And the cars you can buy with that money get a hell of a lot nicer.
A good rule of thumb is that you assume skilled experienced labor wants to bring home about $100k. A good conservative estimate of what it costs to employee somebody at $100k is about $200k (benefits, overhead admin expenses, etc.). And if you follow that, we end up with about $100/hr per person pretty quickly.
So do you want a C-class or an E-class?
How is a company that has employees any better? What are you going to do, lock the original devs in the dungeon so they can't leave?
The reality is that getting the same set of eyeballs that did the first job counts as the kind of special expertise that only comes with a premium. Either the devs are being paid to watch Law and Order seasons for three months in-between your maintenance cycle, which is its own special kind of premium rate. Or, you have to outbid the project they've moved onto, plus any contractual penalties they might incur for moving off the new project, plus the Fred Brooks Tax for playing musical chairs with developers.
There is very little in software that is irrespective of individual developers, least of all support guarantees. It in fact hinges entirely on the current and former individual developers, and the quality of whatever notes or documentation were left behind. The mere fact that two parties negotiate that software should be performant and bug-free, does not make it so by force of will.
As for business continuity, most "app" companies have been around for 1-3 years, whereas the developers that comprise them usually have a decade or two at writing software professionally on the resume. There are more established "consulting" companies that pre-date iOS, but I'll let you in on a secret--they farm work out to freelancers. It's entirely a question of how many middlemen you want between you and the person ultimately responsible for getting the work done.
I think this article was speaking more to the smaller business that has no experience in app development but wants to take a plunge into the market. I deal with these smaller businesses here and there. They're often very unrealistic when contemplating the costs associated with app development. They're thinking $500, like that ad they took out in the local paper and they're often shocked when I let them know that their product vision is a couple of orders of magnitude different than their budget.
This article would probably be one I'd point them to in order to help them understand the investment that they're making, since it is an investment.
So given your app existed then potentially $10k could be a great price no matter how many hours you put into it if; you not particularly fussed about keeping it from an enjoyment sense, it makes sub $1000 per year in revenue and you don't see yourself creating significant future revenue from it.
If I had a nickel for every time I was approached by someone with a spec that exceeded their purchasing authority (usually by an order of magnitude), I would be a very rich man. There are a lot of mondays out there where some manager says "We need an app, here's $10k signing authority, go figure it out" and what they do is e-mail 3 developers for quotes.
Each developer looks to the right, looks to the left, and sees competition, so there's social proof that there's money in the deal. Exactly one sales rep has a brain in his head, and uses the situation to score a meeting with an actual decisionmaker to talk about a totally different project that might be worth paying actual money for. Everybody else just expenses a few lunches and enjoys pretending that meetings are work.
But despite all the social proof, there's usually no real desire (within several multiples of required effort, anyway) to actually produce anything. It's just some lower manager read in a magazine article somewhere that they need an app, and they have the authority to use the corporate letterhead and book conference rooms, and nothing better to book meetings about.
> about: I love web apps and my team is amazing. http://www.darwinapps.com
/me checks http://news.ycombinator.com/submitted?id=vlokshin
All submissions but one are darwinapps.com. The exception is vladlokshin.com.
Nice marketing.
I'm not against self-promotion, but it makes me wary when someone uses their account solely for that purpose. I'd prefer that people contribute to the community instead of just submitting links they stand to gain from.
If you wrote a blog post about apps pricing & expectations, ran an app dev shop, and frequented HN, wouldn't that be only logical to do if you posted something?
Nice detective skills, but I'm not hiding anything.
In reality, we've been doing this outside of our 9-5s for a couple of years (with the majority of the "we" coming together while trying to build a few internal projects).
Most of our dev team has been full-time for a bit over 1 year now.
Start-ups are rough and when you're bootstrapping through consulting, some months are great, and some months are rough. I kept my full-time to feed in money during the bad months to keep the machine growing at times that I knew it was in the right direction. I had that job up until a little over a month ago.
The full-time job was actually great (consulting at the US HQ of a top-tier German car company, ironically enough) but I'm awful at working for someone else, there was too much talent and goodness brewing behind the DarwinApps team, and I was clearly the bottleneck. It's not easy doing something like this while you have a 9-5, but if you're young and single, it's doable. I'm not saying it's not doable otherwise, just speaking from what I know.
We are by no means a success just yet, but most of the core team is finally in one of two offices, working on the same problems full-time. It's a beautiful thing, but it's by no means a success just yet.
That being said, a lot of awesome people helped me with advice along the way. I'd love to help if you have any specific questions, think I could answer them, and if you think it would help progress your company in the right direction. Feel free to email me: Vlad (at) DarwinApps.com
Totally fair. I'm usually too slow to get new content posted up, as someone else on HN usually gets there before me, so it's my own for submissions. That may continue.
I try to be active enough in commentary, but I could definitely improve there. Totally noted.
The interplay between costs, quality, tradeoffs, choices, project management, etc is way too complicated for someone without some experience in the process to "get."
"Websites" were the first piece of bespoke "software" that every company needed. The "how much does a website cost" was a question that "websites-for-companies" people still don't really know how to answer. Clients are still bewildered by quotes orders of magnitude appart.
I wonder if the intelligence level here is growing though. An experienced business owner (say, a 15 year veteran) by this stage will probably have paid for (or at least been involved in) a handful of such projects.
EDIT: Clarification - mobile app, as stated in the article.
Regardless, I don't have an opinion on the most expensive mobile app, but your question made me think of a recent bit of news where the US military spent over 1 Billion dollars on an ERP system and the project is being scrapped. Ouch.
http://www.dailytech.com/USAF+Concedes+1B+USD+Data+Project+W...
Crawlers, multicontinent data centers, etc. etc.
Easily billions of dollars.
$4 billion was spent on the first attempt at writing this software before they gave up in 1997 with no usable product. That's a $4 billion "app" nobody ever used.
http://articles.baltimoresun.com/1997-01-31/news/1997031030_...
It's been a few years since I read about it so things may have changed, but last read was they spent another $8 billion in the 2000s trying again, this time outsourcing the development to consulting firms with thousands of developers. And around 2005/2006 had yet to produce a system the IRS could use, forcing them to continue processing tax returns with paper and antiquated systems.
http://seattletimes.com/html/businesstechnology/2003460386_b...
(And if you include the cost of further development of z/OS over the years that goes much much higher again)
Probably the iPhone? Maybe some Cars (camry? Model T?) Maybe some really big mining/oil operations? What else is in the same league?
In terms of mobile apps my money (hah!) is on one of the many medical apps that are in development - we're talking about apps intended for use by medical professionals in actual medical institutions.
Not only are they extremely costly to develop (someone's got to pay the army of consultants, after all), they face incredibly costly certification processes before they can see any actual users.
I have to wonder what the scope of such a project looks like to come within 2 orders of magnitude of that number.
* Be built around the Newsstand APIs to display text content
* Allow in-app subscription with a free trial
* Display text content with appealing and highly readable typography
That's pretty much it. Is the $1-$5k range reasonable for an app like this? From my perspective, it would be about as simple as an application could be (displaying simple pushed text content) but I realize that as a non-developer I'm not really qualified to make that call.
- How difficult is the appearance? Some people say simple black-on-white is ok, some want advanced dynamic stuff
- How much of a design do you want? Custom colors, buttons, icons etc
- How much content do you want to pack in it? Some huge relatively simple apps require significant optimisations to work smoothly
- Who is responsible for the server side of the app? Some people assume iOS dev will take care of CMS as well
- Non-iOS services compatibility. Syncing with on-iOS subscriptions, making sure content looks the same in web app or android or smth.
- optional minor features that add up quite a lot of code/time. Feedback, analytics etc.
I realize your time is valuable so feel free to leave it at that if you like. Having said that:
What kind of CMS backend is typical for newsstand apps? Are there any free or low cost solutions?
Are there some standard libraries for covering subscriptions and payments for these kinds of apps, or is it typical for these to be scratch-built per app? Is this typically a major feature in terms of development time?
After reading your questions, I'm confident my app will be on the simpler end of things--black on white, static text-only content with some limited hypertext, small content packages--but I recognize this doesn't necessarily mean a simple application.
To be honest, all I really need is the ability to deliver simple PDFs, have them display nicely, and charge a subscription for it. From outside of the app development ecosystem, I naively anticipated this would be fairly simple, but as I learn more this seems less and less true.
Mockups will allow you to realise what exactly has to happen between the screens. Maybe you'll want more functionality after that, maybe you'll see that parts of it are not necessary.
I saw a webapp targeted for mobile apps content delivery on HN some time ago. Google should find it. It may be faster/cheaper to build a custom solution for simple delivery. But extending it may cost a lot and reusing out-of-box solution may be cheaper in the long run. I'm not familiar with NewsStand API so I can't comment more in this front.
Also, stay far, far away from the pay-if-we-like-it, pay-if-we-make-money schemes.
You also get to choose what you demonstrate rather than what a client wants you to do and you won't be stuck implementing someone else's design mistakes and putting them in your portfolio.
So question is are do you ready to pay money to teach someone? Or you just need good app
Custom Software can cost a variable of extreme prices, depending on who's building it and exactly what is wanted out of the custom software.
What's so ludicrous about that?
Maybe read the article and not just the title?
You can get a fully functional well polished fart button app for both iOS and Android made for less than $4k, but I doubt you could make something like the Facebook app on even one platform for $400k.
But no iOS dev worth their salt is gonna' do that.
Custom houses is something that people are familiar with. It's an incredibly stressful and unpredictable undertaking for most people. But compared to custom software, its nothing. A custom house might cost 20% more than what was expected. It might take twice as long. Software might cost 2000% more than expected and the end result might be nothing like what the buyer though they were going to get.
Building a car by oneself is unrealistic, building an app is completely feasible.