

Ask HN: What would we need to pay for? - ely-s

A friend who wants to make an app asked me why anyone would need investors to help bring an app to market. She asked &quot;what would we need to pay for?&quot;<p>How should I answer her?
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byoung2
It depends on the app. If it's something like Flappy Bird, you won't have much
in the way of expenses. If it's something more substantial, you might need to
hire designers and developers to build the app and make it usable. You may
need ops people to keep it running. If it's not inherently viral, you may need
marketers and a budget for ads and PR. If you're doing something novel you
might need to file patents and hire lawyers. You might need to pay for
servers, storage, and bandwidth.

All that costs money. It might be more than you have in your checking account.
That's where investors come in handy.

~~~
Throwaway90283
Well, the money can be used to grow. If you launch a hit app, like Flappy
Bird, you might think money is rolling in, you have few expenses, so investors
are a waste of time. However, your Flappy Bird game is going to come and go
within the year, and you'll watch that daily income fade to zero and end up
back to square one.

So, you want to strike when the iron's hot, and take advantage of that brand.
You want to get Flappy Bird sequels coming out, you want Flappy Bird stuffed
animals for children, Flappy Bird backpacks, etc. You want these things
happening when the game is in its peak, and if you try to do everything on
your own, you won't make that deadline, and Flappy Bird will be quickly
forgotten. So, you get investors, bring in millions, hire staff, and start
pumping out Flappy Bird everything to keep it in the spotlight and to grow the
business. Or you start doing spinoffs, Wiggle Frog, etc. Either way, you need
money to get things moving... fast.

Secondly, you need to fight off competition. This isn't a huge concern with
Flappy Bird, but let's say you make a simple app that let's you post a few
photos of yourself, and others vote on your best picture. You launch, it's a
huge success, and you have practically zero expenses. Now, you're going to
have a dozen competitors fire up overnight, and some of them will have more
talented developers, some of them will have more free time, and some of them
will have huge budgets. They want to take your crown, so you need to stay one
step ahead of them. This is where investors come in. The money goes into
polishing the app further, turning out new features, or related apps.

~~~
skylark
Funny that you mention the photo voting app, I was thinking of banging that
out as a side project. Do you know of one that's already reasonably popular?

~~~
Throwaway90283
I remember seeing a post on HN from a user that developed one (although I
think it was for the web and not mobile). It's the first thing that popped
into my head, and I assume there must be similar mobile applications, but I
never looked into it. I think it's an interesting concept though, it's nice to
choose your best photos when representing yourself online, and in the past
I've thought certain photos were great, but friends or family had a completely
different perspective.

A nice addition would be to sort the votes by gender and age, so you could see
women voted for this particular image, men voted for this one, etc. It might
help you find which photos appeal to the audience and age group you're trying
to target. This way if you're a 30 something man, you don't have 15 year old
girls choosing your clothes and hairstyle.

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greenyoda
Unless the app is completely self-contained, you're going to need to pay a
hosting company to provide you with server hardware and communication
bandwidth.

If you want to market your app to people, you'll need to pay for ads.

However, most investors aren't really going to be interested in funding
something unless they're convinced that there's a good chance it can make a
lot of money. If all you want to do is create a small-scale project that
doesn't need to support a lot of users, you could fund it out of your own
savings.

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jordsmi
Servers and marketing are the two big money hogs.

Also you need to think about the time spent and income being made. Getting
investments mean you can treat it as your full time job and not worry about
dipping into your own savings after your 3rd month of advertising without
getting much return.

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j45
Money can help you do the right thing faster if you know the right things to
do. Otherwise raising and then spending money a little better each round can
end up in focussing on the investors as being the customers of your business.
If you consult at a medium-high enough level, you can probably raise a fair
amount of money yourself and self-fund.

It really depends on the app and if there's market demand ($) for it beyond
just users.

If it's the first app, learning how to make money is more valuable on a
smaller project than building something big and having less of an idea.

