App Development Costs: What Separates a $10,000 App from a $100,000 App?

Analysis

In our massive review of app costs and ultimate guide on app budgets by app type, I detailed quite extensively various price points for having an app built. Although I highlighted some factors that can drive costs higher, I didn’t go into this topic extensively.

Today, there’s still confusion in the marketplace about why the cost to develop an app can vary so much from one company to another. While Savvy Apps is a service provider, our company is made up of people who are also consumers of goods and services. We understand why a lower cost is attractive on paper. Like many, we also have experienced what happens when going with a cheaper or the cheapest option. With that in mind, here’s our attempt to highlight what separates apps built by companies like ours compared to lower or significantly lower cost options.

Note: This article is not about suggesting all quality apps cost $100,000 or more to build. It simply uses the $10,000 versus $100,000 numbers to highlight the kinds of factors that impact costs and why they may vary drastically from company to company.

TL;DR
  • Companies with impressive accolades and customer histories tend to charge more.
  • It costs more to work with teams made up of top talent in apps specifically.
  • Extensive business experience in app stores is invaluable to launching apps.
  • Detailed processes will result in more time and money, producing better apps.
  • Going offshore may appear to cost less on paper but can come with frustrations.
  • Properly vetting app companies will ensure time and money are not wasted.

Proven App Track Record

At a baseline, viewing a firm’s portfolio, customer roster, and checking out apps they have created will speak directly to the quality of their work. Additionally, having notable customers will usually indicate that they are a vetted, established business.

Independent data points from third-parties are just as, if not more important. Whether it’s a feature from Apple or Google, industry award, an independent research firm ranking, or comparable information, these completely unbiased sources provide honest assessments of a company and their work.

Takeaway: The more impressive the portfolio, the higher the number of notable customers, and the greater the amount of accolades, the higher the cost for that company to build your app.

App-Specific Talent

Even today, many companies still try to take on app work when they have not built the in-house talent to do so. We regularly hear about failed apps when a web or other digital firm thought they could easily take on this work. Native apps, which are now the industry standard, require very specific knowledge of hardware, software development kits provided by the likes of Apple and Google, gestures, user experience patterns, visual design trends, app store best practices, and more.

Building a great app requires an app team that has each of these specific skills. Our own approach in hiring developers, for example, requires that they’ve created a handful of apps in the past and are presently focused in their full-time job on apps specifically. There’s much more that’s required in our hiring process, but those two elements are needed at a minimum.

Going a step further though, there’s a difference between someone who just builds apps and someone builds great apps. What separates OK from good from great can be seen in the quality of the work. That’s why companies like Savvy decide to pay for top talent and purposefully do not recruit straight out of college. We really like how Help Scout articulates what they call the overachiever culture. Our own approach is focused on having a smaller team of the very best people in the industry versus simply pushing up our headcount.

Takeaway: The more a company focuses exclusively on apps and hiring experienced talent to create those apps, the higher the cost for that company to build your app.

App Business Experience

Related to talent is how knowledgeable a company is about launching successful apps. This can range from pre-launch app marketing strategies, how to create app-focused websites, coinciding an app roadmap with major launch events, knowing how to build apps faster, how free apps make money, or even why apps often fail.

This sort of app-specific expertise is just about priceless. It also comes only with years of being in the app business. We like to say we’re a grandpa in app years having built apps since 2009. Companies like Savvy benefit from our vast historical perspective ranging from owning the original iPhone and Android Nexus One, being in the app stores during the “gold rush” days, waiting in line overnight for the original iPad, and overall, living and breathing apps for nearly seven years.

What’s most important for us is to share this expertise with others, regardless if they ever even consider working with us. That’s why we agree to do spots on Bloomberg Television, get quoted in leading publications like the Wall Street Journal, or speak at industry conferences like RWDevCon. This knowledge and experience can be the difference for succeeding or failing in the app stores.

Takeaway: The more extensive a company’s knowledge of the strategy, business, marketing, and launching of successful apps is, the higher the cost for that company to build your app.

App Development Process

A process is only as good as the results. Companies with detailed app development processes often see results such as app store features or notable customer names.

Although process does introduce efficiencies, it also requires the time and energy to follow all the steps and stages in that process. That’s why process can also be viewed more negatively as “overhead.” A good process though ensures the right questions are asked, avoids as many mistakes as possible, and overall allows creativity to flourish. For example, instead of worrying about how an app should function when offline, the more unique and special parts of the app can be honed and refined. A process will include checklists for a basic element like offline functionality and many others.

We have an entire book that speaks more broadly to our app development process. What we’re most proud of at Savvy Apps though is that our process is always evolving. We constantly try new tools, libraries, frameworks, and methodologies, as well as regularly update our very extensive, existing documentation. We even have company-allocated time each week to encourage this sort of exploration and experimentation both individually and collectively. These sorts of characteristics should be on display when discussing process with any app company being considered.

Takeaway: The more time a company has invested into its tools, documentation, and processes, the higher the cost for that company to build your app.

Location of App Company

Geography has a major impact on costs. Offshore companies will come in drastically less, often 10 times less, especially when considering South and Southeast Asia. Eastern Europe and South America comparatively, can start creeping into the U.S. ranges mentioned in our app cost article. That’s especially true for the top companies in those particular locations.

The tradeoffs in these situations can include communication problems because of timezone and language differences, cultural barriers, quality, and having to more tightly manage the team. The biggest problem we regularly hear from those who have tried offshore companies is their frustration with needing to constantly repeat themselves. For these reasons, we almost never recommend offshore options for those who have no experience in software development.

Takeaway: The closer the company is aligned to you by geography, language, and culture, the higher the cost for that company to build your app.

Concluding Note

Perhaps a bigger question not addressed is if a $10,000 app can still accomplish the same goals as a $100,000 one? Obviously the answer can vary but we know many, many more out there that spent $10,000 or comparable amounts and have nothing to show for it. We see considerably fewer situations on the other hand, where $100,000 or more was spent, and the app never shipped or is an utter disaster. Those latter scenarios usually are about improving what’s available instead of coming to terms with having to start again.

Regardless of the amount you have to spend on your app, ensure you’re setting yourself up to build it right the first time. It’s incredibly hard to create something from nothing. Take these considerations and others into mind when vetting app companies to avoid frustration and ultimately, significantly wasting your time and hard-earned money.

Ken Yarmosh is the Founder & CEO of Savvy Apps. He's the creator of more than 20 featured apps, including an Editor's Choice selection and Starbucks Pick of the Week. An O'Reilly author, Ken regularly speaks about application design & development, as well as the future of technology at outlets ranging from Bloomberg TV to Google.

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