How Much Does it Cost to Develop an App?

The Author Jeremy Rappaport

Everyone knows about the big names:  Angry Birds, Candy Crush, Facebook, Twitter, Uber, Instagram. Countless others have transformed mobile apps from a millennial phenomenon into something even old ladies use with their bridge club.  App development has become a multibillion dollar industry with seemingly endless potential.

So, how does an entrepreneur enter this business?  How do you build an app?

Rameet Chawla and Ryan Matzner run the show here at Fueled, a New York City development shop famous for working with both startups and high profile enterprises.  M-commerce (aka mobile commerce) apps built by Fueled have generated a quarter billion dollars in sales in the past year. Between their decade-plus experience in the technology industry and close connections to hundreds of startups in NYC–including the 25-odd companies operating in Fueled’s co-working space, Fueled Collective–Chawla and Matzner have a deep understand of how to build successful apps.

If you know nothing about development, however, you may want to think long and hard before partaking in such a ambitious endeavor. Here are some things to consider.

How do I find a good developer?

Assuming you don’t know any recent graduates from a computer science program, or just want to find a development shop that will produce quality work, Chawla has a few pointers on which criteria they should meet. One simple starting point, he says, is to find agencies that have either won awards or received ample press in tech-related news sites or blogs.

“Also, if their apps have a heavier programming or coding component to it, they don’t necessarily want to go after an agency that only has experience with more simplistic apps.”

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Are there any companies that have part of a project done before they go to a dev shop?

“We call them ‘rescue projects,’” Matzner says, “where people have started elsewhere and they end up coming to us because they realize that these promises someone else made were completely empty, or they didn’t know about us when they started and they’ve figured out some pitfalls with their current setup. And so they’re looking for someone who can actually finish the app and get something released. Or, they’ve released something and it just doesn’t work and has one star in the App Store, and they need help fixing it.”

Matzner explains that starting the product on your own is not impossible, but doesn’t almost certainly won’t have the same polish and quality as a product built by an interdisciplinary team of skilled professionals. Not to mention the fact that the features themselves will almost certainly be different in the absence of the feedback a skilled product team brings to the table.

What is the basic setup of a development team, anyway?

Ryan breaks down a group of team members in a way we can all understand.

“A development team is not just a couple developers. It’s a much bigger team that makes everything operate. It’s sort of like if you think about a Broadway play. You have the actors on stage, but then there’s a whole bunch of stuff happening behind the scenes. An app that gets built properly is sort of similar.”

In addition to developers, a team will almost always include one or more designers, who create all of the visual content to be coded into the project. Account managers, along with acting like a liaison for clients, work with product managers or producers to coordinate the completion of different tasks. Product managers are a bit like directors–they are responsible for the overall vision of the app. The stereotype is that designers and product managers are easier to find than developers, but when it comes to high-quality talent, finding good people on the creative side can be just as difficult.

What is the cost of an average app, and why?

Matzner says “you’re likely looking at around $120-150k to do that. So if you break it down, it’s basically 120 hours of work per week, times an average of 8 or 10 weeks. You have two developers working full time (that’s 80 hours), and then you have a designer and art director working half-time (that’s about 20 hours), and then you have a product manager and an account manager coordinating. And that’s the another 20 hours. And so that’s where you get 120 hours from.”

If that sounds unfeasible, you can always go a cheaper route and hire a freelance developer, though quality can be highly variable and anyone unfamiliar with programming may have a difficult time properly assessing the quality of a developer.

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“Anyone who’s saying that you need less time than [8-10 weeks], or can do it significantly cheaper is cutting corners somewhere,” says Matzner. “Hiring a freelance developer online who’s in some far-off land and you’ve never met can be tempting, but will they really be able to properly interpret your vision and build the app you’re expecting? I’ve met a lot of people with stories of heartbreak and frustration with time and money wasted.”

But that’s not to say success is impossible. However, expectations should be tempered. According to Matzner, the most common success story involves a good beta-test or proof-of-concept that is good enough to get another round of funding and maybe even attract some press, but ultimately needs to be rebuilt from the ground up by a more experienced team.

Costs can depend on the type of project you wish to complete. Games are consistently among the most expensive products, since they usually require the most complex coding. The cheapest apps often fulfill one specific purpose, such as a calculator or flashlight. Other complexities are apps that require multiple interfaces for different users (think drivers, passengers, and admins on a taxi app, for example). Is your app tying into a third-party API? Are you using standard iOS elements or something completely custom? Ae you leveraging existing technologies or inventing completely new ones from scratch? Building a robust social network can be incredibly complex (just think of how many employees Facebook has!). But if you start with a proper MVP (minimally viable product) many of these issues can be mitigated, but it often means putting rand plans and expansive feature sets on hold for an initial launch.

There is a negligible difference in price between the construction of iOS and Android apps, although Android can sometimes cost a little more. This is due to the wider range of devices and operating system versions that an app needs to be optimized for.

Of course, there’s nothing stopping you from getting a tech-savvy friend to do this kind of work for cheap or free.  However, odds are it will be incredibly difficult to find someone willing to ignore the tens of thousands of dollars they could be making for a single app working for someone else.

“A lot of people say, ‘Oh no, that’s kind of crazy.  It shouldn’t cost more than 50 grand to build an app’,” says Chawla. “Well, go ahead and try and hire two developers, one back end, one front end.  With even $50k, if you’re paying a competitive salary, you’ll last two and a half months, maybe less.”

  • http://www.innergeek.co/ Colton Hathaway

    Great explanation. Very accurate. More affordable than I would have thought, given Fueled’s standing in the industry.

  • Lee Wright

    Thanks for updating all of us.

  • http://www.webspiders.com/ John Murphy

    Really a well-explained post. I am really impressive by the way you have described how cost-effective can be Android application development.

  • http://www.openxcell.com/ JannyGarrets

    I have no idea about app development cost but after reading this blog I knew that app development cost is very affordable for developers but they are not able to estimate the perfect value of the developed application.

  • arrowheadpride

    Don’t let fueled lie to you guys, theres a hundred thousand $5k apps for every $120k app. A game will run this much, simple apps run 3-10k, the more features you add (fb/twitter integration, etc) the higher the cost. However the majority of apps aren’t running anybody >50k. Especially if it’s not multi platform. 120k can pay for a talented designer, a dev who codes everything from scratch, getting the best ads on the app, marketing it, paying for your ads, updating and cover the expenses of the servers assuming you will have millions of users. Companies like lenovo, coke, and bmw hire reputable devs like Bixby Apps, and their money pays off. Some 13 year old kid is learning code right now, and will develop the worlds most simple app, and make millions. Maybe you know how to do everything but code, or have the drive and ambition to learn everything but code, you can make the next million dollar app with 2k. It takes big money to make big money, but that’s not always the case. Most people don’t have $120k, and that doesn’t mean they havent thought of a really good idea. However, if you have a good idea, the more you spend the better. Everything I said design, ads, updating, multi platform, etc being done right is very important. That’s not saying you can’t spend more and update when you make some money off of it. Now if you’re already a millionaire and want to invest in your own idea, or find investors, go for it its the better route. This shitty 1 sided article is going to scare a lot of good ideas away though, what a shame fueled.

    • http://DarwinApps.com/ Vlad Lokshin

      This article is written from the perspective of a US-based dev shop. From that perspective, this is VERY accurate.

      How many apps have you successfully created for <5K? I can't see that from your comments.

      How many successful apps has fueled created at 100-300K? Fueled's website showcases these nicely.

      Disclaimer: I own a dev shop that is a smaller version of Fueled (DarwinApps), but I can tell you that the prices here are very accurate.

      Unless you, the client, are planning to think through EVERYTHING there is (wire-framing, design, does this appropriately solve the given problem?, what should we do about the landing page? How do we move the initial sign-ups and convert them to real users? Do we have everything planned out for distribution on platforms X and Y? What's the most stress this can handle?

      I have not seen a successful app go from idea to customers in less than 1000 hours. Usually, it's more like 2-3K hours for an MVP that stands a real chance. Unless you're paying 1-3$/hr, 5K — or anything close to that — simply won't do it. US based dev shops average 100-250$/hr.

      • flappydick

        You think $120-150k is accurate? People are creative, and 12 year olds have made top apps. People are unemployed with coding skills and make far less than they should making million dollar apps for a soccer moms idea. $5k will get you a shit developer, but it could also be the best $5k you ever spent. Most of the time though, an idea and $20,000 gets you the same result as an idea and $50,000. Stop giving yourself all the credit.

      • Ted Lee

        I know the App Grindr cost $5k and it was pulling millions of users a month. Making the owner a millionaire in months

  • http://www.imobdevtech.com/ IOS APP Development

    it Big cost Different To Develop Application in iOS Android Platforms……………….

  • Jay Stallings

    Thanks for the informative article. I have read many like this and it seems that costs vary greatly. What I have not learned is precisely which components of app development are the most costly (design, animation, connecting with other websites – sorry about my terminology). I have documented my app and even created an image of some of the pages. Then I looked for apps that already used my ideas to see which companies could handle my needs. The issue is that it is not a single company. Does an app creator such as myself ever contract with 3-4 different app developers to best utilize the skills (or pre-written code) that each of those development companies has to offer? I anxiously await any comment. Thank you.

  • Steve Gardner

    SteveGardner, do you have individuals who will look at an app and make the investment if they believe it will go for a large percentage of the ownership?

  • http://www.vermillionsky.com Kennick

    Yikes at these comments I too own a dev shop but thats not the point. Programming is a time consuming process, and a lot of other dev shops don’t value the cost of programming from the point of view of their employees. Your employee needs to pay rent, eat, and have fun outside of work. You need to pay these employees well so that they can be dangerously creative in their work. It is unrealistic to pay any programmer less than 4k a month just for their time, and 4k a month is really cheap. To be successful and compete with the current state of the app store you need great talent and a lot of money. The cost of building an app is akin to buying a car, the more you spend, the better the car. Which would you rather prefer, a 1997 Toyota Camry or an Aston Martin

  • Adebayo Ijidakinro

    This is an awesome article. I think the most difficult aspect of any business is pricing. Often times people charge way too low, and what ends up happening unfortunately, is the finished product, if it’s even finished, is garbage. In this world, you will always get what you pay for.

    It is true that you can get an app done for 3k – 5k that’s extremely simple, but you have to remember, that’s always a gamble. You may make an app for 3k, and then get no ROI. That’s a problem, because you need to see some Return on Investment, even if you’ve only forked out 3k. That’s why realistically, apps need to be priced so high. The customer is paying for everything from initial idea to development. That is a very long process, if it’s executed properly. What Fueled does is increase your chances of success exponentially by creating a beautiful and elegant product. It’s actually frustrating that more development teams don’t adopt this same attitude.

    All in all, I’m a firm believer of charging for excellence. You will always get what you pay for. Always! No one should base financial decisions off of the potential to be “lucky”, but off of a realistic business plan that has a higher potential to make money. That’s why you charge so high!

  • Aaron Cohen

    Vlad,

    You are King. This made my day.

    Sincerely,

    Aaron
    Fledgling Dev Shop Founder
    flappydick Enthusiast

  • info

    That was cool calculaton and i fully agree. But you can do some outsourcing and can be done for 50% for same product. Like with mine company based in central europe. If interested, write me at vojtek@7soft.sk :)

    Anyway this made my day and i lought very hard, flaapydick is great concept :D

    Tomas

    7 Software s.r.o. Founder