How Much Does it Cost to Develop an App?

July 1, 2016 - 11 minutes read

 

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Short answer: anywhere from $25,000–500,000.

Long answer: building an app is like building a house. Who is it for? Bricks or beams? What’s the neighborhood like?

Tree houses and penthouses are both “houses,” but serve radically different purposes at radically different price points.

The team here at Dogtown has launched over 100 mobile app projects for startup founders on three continents. As startup entrepreneurs ourselves we know that pricing is at the top of the mind for every founder.

In this post, we’ve compiled everything you need to know to make a ballpark development estimate and take your app idea to the App Store.

How much will it cost to bring your app idea to life? Read on.

Understand: apps are more than just products

app product

A wise mobile app developer once said that the difference between a native app and a “naive” app is only one letter.

A stumbling block for so many startups in the app industry is the drive to build a complex, feature-rich “final product” right away. The fatal flaw here is the eagerness to skip over testing, validation, fundraising, and other critical early-stage startup processes that improve the potential success of a new venture.

Building an end-to-end mobile product is like building a bridge — It requires researchers to test whether or not it should be built in the first place, surveyors to examine the surrounding area, architects to design the structure, and developers to bring it to life. Finally, and most importantly, you need a team to ensure the structure can meet the demands put upon it as traffic increases.

While commonly thought of as products, the fact is: successful apps aren’t just products; they’re full-fledged tech companies in their own right.

Understand: apps are built in stages

Before you takeaway a price range for your app idea, it’s important to be familiar with the idea that app development proceeds in three stages: prototype, beta, and minimum viable product.

Each end product, or “deliverable,” serves a different purpose and comes at its own price point. Successful apps like Uber and Twitter go through iterative phases, like the metamorphosis of a caterpillar. (But instead of a butterfly, you get Tinder.)

mobile development

Prototypes

Prototypes are essentially previews, built to display the look and feel of the app’s functionality without the back-end architecture needed for a full release.

Beyond offering invaluable user testing, the big value proposition with prototypes is that they demonstrate your vision to investors. In fact, getting significant funding without one is practically impossible. San Francisco iPhone app developers pitch investors for capital every day, and those who have a “sample” product to show off always fare better.

Prototype pricing is easier to predict than other stages of the process since they don’t require database architecture and feature functionality. Generally speaking, a mobile prototype can be built for as little as $5,000 using lean UX principles. Note that costs can climb according to the scope of the project.

Just to be clear, a prototype doesn’t have full functionality. It has the bare minimum functionality to act as a “proof of concept” and get investors on board.

Beta versions

Beta versions of mobile apps feature a polished front end alongside a functioning back end and basic functionality.

Beta versions are critical for gathering early “soft launch” analytics and user input while the startup is still young and nimble.

Additionally, beta users are highly valuable. The exclusive feel and close relationship forged by communicating directly and implementing user requests creates “brand evangelists” with high sharing potential when the app reaches its official launch date.

When it comes to pricing, the variable with beta apps is the back-end code, with complexity varying to large degrees from project to project. Beta app development usually costs around $50,000, going up significantly for complex apps like social networks and financial apps.

Minimum Viable Products

mobile design team

A minimum viable product (MVP) is a flawlessly coded and rigorously tested app with non-essential features removed.

MVPs have a laser-focus on the core features of an app, making your product more approachable for new users while keeping costs down on second-tier features that might not justify themselves in the long run.

The biggest cost for MVPs is creating code that can handle heavy use without sacrificing speed and precision. Most startups budget between $120,000–500,000 for developing an app up to the launch date.

What you’re paying for with an agency

minimum viable product

At this point you’re probably thinking: where are all these funds going?

When you work with an agency, you’re tapping into the experience of not just one person, but a team of specialists with broad experience launching apps similar to yours. The price of admission includes a wide variety of skill sets:

  • UX/UI designers
  • Front-end developers
  • Back-end engineers
  • Account manager
  • Product manager

That may sound like a lot of horsepower, but trust us — it takes coordinated talent to launch products that succeed in the crowded, competitive markets of the Apple App Store and Google Play.

Questions to ask yourself first

Not scared off by the price tags? Good. The rewards for a well-executed app are huge.

…But before you drop us a line to chat about your idea, ask yourself these questions:

  1. Who is your target audience?
  2. What problem does your app solve for your audience?
  3. What are the core features that can solve that problem?

If you have clear answers to these questions, you’re ahead of 90% of entrepreneurs and ready to take the next step with your app idea.

Alternate approaches

The vast majority of apps that succeed on a broad scale are produced by dedicated development teams, whether in-house, at a mobile studio, or some combination of the two. That being said, there are alternative paths to consider:

What if I just build it myself?

Silicon Valley lore is full of stories about “genius coder” wunderkinds like Elon Musk who built wildly successful services like PayPal on their own with little more than caffeine and determination. Stories like these unfortunately give many budding newcomer mobile app entrepreneurs the idea that they can succeed on passion alone. The fact of the matter is that development has become significantly more complicated and demanding since the “good ol’ days.”

Elon Musk

Elon Musk, famous in coding circles for building services like PayPal by hand.

Today’s users don’t just expect products that work; they have to work beautifully, look amazing, and evolve quickly to keep up with their needs. Making the cut takes a stellar team and stellar strategy on top of a passion for the app’s purpose.

What if I outsource the coding to India/Phillipines/etc.?

The cult of the Four-Hour Work Week makes outsourcing work outside US borders look attractive. The danger with creative and technical work like app development is that so much can get lost in the process when startups try to use a “sweatshop” production style. Apps that cut corners to reach the app store simply can’t compete in a crowded market.

Outsourcing has its merits, but comes with a host of red flags.

Outsourcing has its merits, but comes with a long list of disclaimers.

As a rule of thumb, only approach agencies that can display a stellar track record through portfolio, awards, and testimonials. That doesn’t mean you have to stay domestic, but keep in mind the barriers communication and time differences make if your perfect development team happens to live on the other side of the world.

What if I cobble together my own team of low-cost freelancers?

It is possible to make a final product using a temporary team of freelancers. However, agency-quality products rarely come out of this setup, and it generally requires much more time. Part of what’s included in an agency product is years of experience, not to mention dialed-down project management.

Freelancer-driven app projects are notorious for showing up at the doors of agencies as “rescue projects,” ultimately incurring higher costs for the client.

The “secret sauce” of successful mobile apps

iPhone app developer

Regardless of cost, apps that succeed on a large scale all have three things in common: passionate founders, detailed strategy, and humble beginnings.

There’s nothing that can’t be solved by a great app idea perfectly executed. The first step takes incredible courage, but the rewards are great for those who invest in their app dreams.

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