Since the launch of Apple’s App Store 10 years ago, mobile apps have grown to be one of the most exciting sectors for entrepreneurs starting new businesses. Mobile apps generated $60 billion in global revenue last year, a 35% spike from 2016, and that number is only forecasted to grow.
But getting into the app game isn’t easy. In an increasingly crowded app market, competition over users is fierce, and that vast majority of new apps that launch every year never turn a profit. And even before you can start thinking about user acquisition and growth hacking, there’s the first, primary hurdle: cost.
To those outside of the app development world, understanding the costs of mobile app development can be difficult. The Internet is filled with conflicting and information, and app developers can charge anywhere from $5 to hundreds of dollars an hour for development. But more fundamentally, pinning down the costs of development is difficult because there is no one “price tag” for developing a mobile app.
As the head of an app development agency myself, I tell my clients that asking how much it costs to make a mobile app is the same thing as asking how much a car costs. What are you looking to buy? A 20-year-old Toyota could sell for as little as $1,000. But a brand new Ferrari? Hundreds of thousands.
It’s the same thing with apps.
Figuring Your Feature Set
There are a wide range of factors affecting the cost of app development, but perhaps the most important is feature set. The simpler an app is in terms of functionality, the cheaper development will be. But as the feature list gets longer, the price tag on development gets bigger.
As the Rootstrap Blog explains:
“The cheapest apps are simple, single-function programs. They do one thing and one thing only, and they generally have no bells and whistles added on top. Think simple calculator apps, unit conversion apps, or very simple games. These mobile apps, if simple enough, could cost as little as $10,000 – but again, they do very little.”
Ultimately, development cost is based on human-hours spent coding the app. The more features the app needs, the longer it will take to code those features – and that means higher dev costs:
“Adding more features means adding more cost. With a mobile game, for example, adding the ability to log in, to save your scores, or to share your scores via social media all can drastically increase development costs.”
Before you can start to understand the cost of developing your own app, you need to have a basic understanding of how feature rich the app needs to be. Building a glorified calculator is a simple endeavor – but creating a whole new social network is a much more complicated and expensive proposition.
Understanding the Technology
Feature set is the most significant driver of app development costs, but it’s far from the only factor. You also need to consider the technology involved.
As Rootstrap explains, “Part of what makes simple, single-function apps inexpensive is that they don’t require any kind of extra tech on the backend or server side.” If your entire app is contained within the code that goes onto a mobile phone, you can expect it to be fairly inexpensive. But costs start to pile up when we talk about back-end, server-side technology.
Consider an app like Uber. The actual code on an individual users’ phone is really less than half of what makes Uber functional: without access to the company’s servers, the app is useless. Most of the “firepower,” in terms of software, lies in Uber’s servers – that’s what lets the app communicate between drivers and riders, optimize navigational pathways, and manipulate pricing to keep drivers on the road and riders requesting.
This kind of back-end development can drastically increase development costs. This is why it likely cost Uber around $1 million to build an MVP: for their app to even function, they needed extensive development and technology on the server side.
Calculating the Price Tag
Now we have a basic understanding of the major determinants of app development costs. But this still begs the question: what are we talking about in terms of numbers?
At the very cheapest end of the spectrum, it’s possible to get an app built for as little as $10,000 or even $5,000. At this price point, you’re building a single-function app using shady offshore developers charging $10 an hour for full-stack development. It’s cheap, but the problem is that there’s no guarantee of code quality. Come launch day, you’ll almost inevitably be dealing with bugs – so much so that fixing them may cost more than development itself.
At the opposite end, it’s common for enterprise companies to pay millions of dollars to build an app. These are likely extensive, feature-rich apps with robust server-side capabilities, and because the developers know that the client can bankroll it, they’re guaranteed to charge an arm and a leg for their services.
This is a pretty wide range, and that’s intentional. The truth is that app development can vary widely in cost, and the costs can change as you learn more about your users and iterate the app – that’s why we insist on Roadmapping before development for all of our clients at Rootstrap.
If I had to pick an average, though, I’d say it usually costs $100,000 to $250,000 to build an app. This is a big enough budget to build a v1.0 with a solid development agency without completely bankrupting yourself. And personally, I’ve never seen an app succeed without at least $150,000 in the bank for development. That gives you enough to build a v1.0, deal with all the unexpected surprises along the way, and still have some cash left over for user acquisition and getting your business off the ground.
Ultimately, though, no two apps are created equal. Every project is different, and it’s certainly possible to build your app on a shoestring and still squeeze by until you can start gaining users and traction. And as always, what matters is building a product that people actually want to use.
If you can do that, I’ve found, everything else tends to work itself out.
Author Bio:- Ben Lee is a tech influencer and cofounder of Rootstrap, a digital studio that’s helped launch more than 500 products.