This article was written by Calixto Tay, Partner at Originally US.
Building iOS and Android mobile apps seems to be all the rage now. Start-ups are building apps, SMEs are building them and even large MNCs are building them.
Mobile apps are software that reside on a person’s mobile phone. There are almost no other more intimate way to reach out to your consumers and users. Just imagine this – Singapore has mobile phone penetration rate of 148.9% way back in 2012. Businesses know that they are missing out huge opportunities by not developing their own mobile apps.
Mobile apps can serve a large variety of purposes. Some can be perfect avenues for businesses to push out information and interact with their customers. Other apps allow users to conduct transactions. Many also build mobile apps for marketing and outreach purposes. One such example is the highly popular McDonald’s Surprise Alarm that went completely viral some time in 2014.
Not all mobile apps are created equal. Some mobile apps are extremely well-executed and highly welcomed by customers. Others are poorly designed and achieve nothing but invite the wrath of audiences.
Take for example, the two most popular competing brands in Singapore – Starbucks & Coffee Bean. Both of them came up with their own iOS apps for the Singapore market, but enjoyed a totally different outcome.
Beyond the obvious design inadequacy, Coffee Bean’s old mobile app was filled with bugs, was slow, and very laggy. People simply hated it. Eventually, Coffee Bean pulled its app from the iOS App Store (it is no longer available to download now). Money down the drain?
Starbuck’s app, in contrast, works really well, was well-received, drove huge amount of conversions and increased customer engagement and sales, and also went on to win not one, but three Mob-Ex Awards in 2013.
Both mobile apps have very similar functionality. Why was the outcome so different?
This brings me to the topic today, cost.
Understanding The True Cost of Building Mobile Apps
We see the same pattern everywhere, in various industries and when acquiring various products and services. Supermarkets sell bicycles at just S$99, but there are bicycles being sold at specialized shops going for as much as S$1,999 and more. In this example, if you do not understand the true cost of building a bicycle, you will never understand or appreciate what the price difference entails.
Understanding the true cost of building mobile apps can make a difference between the success or failure of the next mobile app you want to build. You wouldn’t want to engage a vendor who promises the sky, and ultimately fails to deliver something of quality. Likewise, you wouldn’t want to be paying unnecessary premiums to vendors just because they are “branded”. Similarly, there are many vendors out where who would gladly shave their prices to win your business, but is going with them really a good idea?
To help you understand the cost of building a mobile app, I present this simple equation:
(Duration of Project * Quality of Talents * Number of Talents) + Vendor Reputation = Cost
Let me explain:
Duration of Project
This is straightforward. Just like manufacturing, the longer the time needed to build your mobile app, the more expensive it would cost to build.
How many features do you want to have? How deep or complicated are each of these features? How many different platforms (Android, iOS, Windows Phone, Web, etc) do you want to launch your mobile app on? These are all factors that affect the number of man-hours incurred when building your mobile apps.
Quality of Talents
Mobile app development is a highly labour dependent and labour intensive activity. Just like other activities that involve creative and labour input from individuals or team, the quality of the end-product is highly dependent on the quality of hands which worked on it. The talents behind the Starbucks mobile app are probably way more talented and experienced than those behind the Coffee Bean mobile app.
Having talented hands to work on your mobile apps costs sizable cash, so many vendors simply offshore most or all of their development work to developing countries or use an army of junior developers.
The cost difference between different software developers is huge. A junior developer based in India can cost USD 300 a month, while a really senior and experienced developer based in the United States can command up to USD 200 an hour.
After looking at the quotation from your vendors, ask about the experience level of their designers and developers. Ask where the bulk of the development work is done. If there’s any mismatch, run.
Number of Talents
A typical mobile app project involves a large number of professionals with different skill sets. At the most basic level, there will be a project manager or account manager who acts to interact between you (the client) and the development team. There will be designers who work on your mobile apps’ look, feel and usability. And there will = be developers who specialize in different part of the deliverables – backend API developers, database architects, iOS developers, Android developers, etc. The list goes on.
In every mobile app project, there are many mouths to feed. If the quotation from the vendor is too cheap, be suspicious and ask about the size of their development team and how many will be placed on your project.
Reputable vendors generally cost more, but they don’t give a higher quotation for fun.
Reputable vendors reduce the risk of project failures by limiting the number of clients that each project manager, developer or designer are servicing at any given time. They invest in a better development environment and tools to reduce the time required to develop your project. They have a more elaborate and time-consuming testing process to ensure that you get the quality mobile app you deserve. All these require significant investments by the vendor.
Just like buying common electrical appliances; the same item with the same specifications from different brands may be priced differently. The more reputable brands usually command more, but that is because they give you the assurance that their products are better built, more reliable, and last longer.
There are of course, vendors who command a premium just because they can. Think luxury bags. Beyond a certain price range, the difference in material and quality starts to fade and the logo is the only one that determines the price. I call this the “ego” premium. You don’t want to pay this type of premium when building your mobile apps.
Finding the “Goldilocks” Vendor
As you can see, mobile app development is not voodoo. It is just like any other traditional business, where labour contributes greatly to the cost and outcome quality.
Always start with a budget that works for you. If you have only S$10,000 to build a mobile app, find a vendor with attributes I described above, who can develop your app within that budget. There are many vendors out there, but do know that a S$10,000 mobile app is going to be very different from a S$60,000 mobile app, even if the functionality is similar.
If you have more budget, decide what the best balance is and spend it on the right vendor. Your mobile app represents your brand, and you do not want what happened to the old Coffee Bean mobile app to happen to you.
If you called for a tender and a vendor came in with a price that is drastically lower than anyone else’s, get suspicious and ask questions.
Our company, Originally US, takes extreme pride in being the “Goldilocks” Vendor for your mobile app needs. We are definitely not the cheapest in the market – we will lose all our talented developers if we are.
Our team consists of many veterans – just take a look at our website for the bio of the core team members. Yet, I daresay we do not command any “ego” premiums.
Originally US is not affiliated with the Vendors behind Coffee Bean, Starbucks, and McDonald’s Surprise Alarm apps.