
Q: “How much does an app cost?” A: “About as much as a car.” - vlokshin
http://blog.darwinapps.com/post/36041399961/appcostscar
======
swanson
Ha! A car? That's cheap!

Big companies can't risk going with a freelancer (who might go out of business
or be booked when they need updates) so they put out an RFP to software firms.

A month or so of upfront design (wireframes, screen design, user stories).
Another couple of weeks of iterations to get signed off by the
branding/marketing group.

The development will need a team, four developers is about right (we need to
get this app out fast in the ever-changing mobile landscape). We'll need a
manager at half time and a team lead to handle client meetings. Throw in a
dedicated test engineer (so many phones to test on these days...) and a month
for formal test plans and execution (did we mention this app might be audited?
test plan is 500 pages).

Make sure it is localized as well - we are a global company with global
customers, all of whom we value. We also don't want to be sued, so we'll need
a EULA screen that the user must accept. And a help page. And a way to
register on our site.

Oh yeah, the way our budgets work, we've only got one shot at getting money
for this app - can't do a minimal release and update it after it's in the
store.

Conversative costs for an app in the OP's "BMW Tier":

    
    
      One month upfront design at $100/hr (1 designer, 1 dev): ~$30k
      Three months of development at $100/hr (4 dev, 1 test): ~$250k
      Three months for PM at $150/hr (0.5 PM): ~$40k
      One month formal resting at $100/hr (1 test): ~$15k
      Monthly maintenance/update 20hr/month (1 dev): ~$25k
      Total: Over $350,000 for the version 1.0 of your mobile app (on a single platform)
    

Apps ain't cheap.

~~~
ricardobeat
That's a lot of bloat for a single-platform, first version app. A designer +
developer duo can put a nice polished app out in a month or two, and could
cost way under $100/hr. You certainly don't need a team of four + a PM. The
process you're thinking of fits the "I want the best" price range (1 month
testing?).

~~~
randomdata
_could cost way under $100/hr._

Way under seems like a bit of a stretch. The average developer salary is
$92,000 per year, which works out to around $45/hr if we assume a standard
work week. The rule of thumb is that you need double or even triple of what
you are paying your employees in order to be able to afford to employ them.
Even if you are the business owner and employee, you still need to recoup the
costs of running the business for yourself so the math remains the same. It
seems the bare minimum you could charge for the average developer is $90/hr,
which is just shy of the $100/hr. quoted. Above average developers will
require much more per hour.

You could, perhaps, charge way less if you hired below average developers, but
that seems to fall under the first category and not the one the parent is
referencing. This, of course, assumes that you are operating in the USA.
Numbers may differ in less costly parts of the world.

~~~
ricardobeat
Oops, I missed the part about not being able to use freelancers. $50-$60/hr is
a common rate for freelance developers. There also excellent devs that don't
live in countries as expensive as the US.

~~~
cookiecaper
This is a recipe for disaster. I have been full-time freelance for the last 4
years, and scaling into a full-service consultancy with all the accoutrements
(like an office for my employees), and I can tell you that $100/hr is really a
bare minimum for meaningful profit margins on developers. I have a few
contracts under that (for various reasons), and with the new hires I'm
contemplating, I am going to have to raise their rates or drop off and replace
them with better paying clients.

As a freelancer, you might be able to get away with $70-$80/hr minimum, but
$100 minimum still is easily within a reasonable price range.

I would expect a fair market rate for great developers to be something more
like $150-$200/hr. Unfortunately, I have a hard enough time getting clients
around here at $100, but in order to really have the business firing on all
cylinders, I would need to be charging $150+ for each developer hour.

The margins at $100 and below are barely enough to make payroll; there is
almost nothing left to pay for things like significant marketing or PR,
investment in equipment or facilities, loose time to spend on internal
projects or internal maintenance, etc.

------
hrabago
I was once contacted by a company who wanted to purchase my code to use for
their app for their company. It wasn't a flashy app, but had a few time-
consuming, and at the time, unique features. I gave my starting point - $10k.
I expected them to come back to negotiate, but I think they were taken aback
at the price I quoted and decided to go another way. I suspected they instead
outsourced it or developed it in house. Several months after that (likely over
a year) I checked the App Store for their company name, and they still did not
have an app. Whenever I remember that episode, I wonder if they ever realized
that the deal I offered them was actually reasonable.

~~~
hboon
Someone offered to buy an entire app from me, a paid iOS app that was making
stable income and has a proven codebase. I quoted 80k (or was it 100k) and the
enquirer was shocked, replying that he was assuming a 10k price tag. And he is
a CTO of a startup.

~~~
Gustomaximus
There needs to be a clear distinction between pricing for an existing app vs
pricing for building one from scratch. If the former this will be priced based
on revenue, potential revenue and how much the owner wants to keep it. If
building from scratch then the cost has to be based more towards
developer/admin hours.

So given your app existed then potentially $10k could be a great price no
matter how many hours you put into it if; you not particularly fussed about
keeping it from an enjoyment sense, it makes sub $1000 per year in revenue and
you don't see yourself creating significant future revenue from it.

------
AngryParsley
/me checks <http://news.ycombinator.com/user?id=vlokshin>

> about: I love web apps and my team is amazing. <http://www.darwinapps.com>

/me checks <http://news.ycombinator.com/submitted?id=vlokshin>

All submissions but one are darwinapps.com. The exception is vladlokshin.com.

Nice marketing.

I'm not against self-promotion, but it makes me wary when someone uses their
account solely for that purpose. I'd prefer that people contribute to the
community instead of just submitting links they stand to gain from.

~~~
vlokshin
Good call. I need to forward vladlokshin.com to DarwinApps.com

If you wrote a blog post about apps pricing & expectations, ran an app dev
shop, and frequented HN, wouldn't that be only logical to do if you posted
something?

Nice detective skills, but I'm not hiding anything.

~~~
napoleond
No kidding. I'm really glad you posted--my company is (by my estimation) a
couple of years behind yours, and I think we can learn a lot from the way you
guys are doing things, so thanks!

~~~
vlokshin
You'd probably be surprised at how new/young we are, but I appreciate the
unintentional compliment :)

In reality, we've been doing this outside of our 9-5s for a couple of years
(with the majority of the "we" coming together while trying to build a few
internal projects).

Most of our dev team has been full-time for a bit over 1 year now.

Start-ups are rough and when you're bootstrapping through consulting, some
months are great, and some months are rough. I kept my full-time to feed in
money during the bad months to keep the machine growing at times that I knew
it was in the right direction. I had that job up until a little over a month
ago.

The full-time job was actually great (consulting at the US HQ of a top-tier
German car company, ironically enough) but I'm awful at working for someone
else, there was too much talent and goodness brewing behind the DarwinApps
team, and I was clearly the bottleneck. It's not easy doing something like
this while you have a 9-5, but if you're young and single, it's doable. I'm
not saying it's not doable otherwise, just speaking from what I know.

We are by no means a success just yet, but most of the core team is finally in
one of two offices, working on the same problems full-time. It's a beautiful
thing, but it's by no means a success just yet.

That being said, a lot of awesome people helped me with advice along the way.
I'd love to help if you have any specific questions, think I could answer
them, and if you think it would help progress your company in the right
direction. Feel free to email me: Vlad (at) DarwinApps.com

~~~
napoleond
That sounds like quite the journey! Thanks so much for your generous offer
Vlad, I'll be in touch with specific questions soon.

------
netcan
This blog goes back to the complicated issue of people who don't understand
software needing to buy software. The part that this analogy misses is that a
$400k app is not necessarily going to be better than the $4k one, or even very
different.

The interplay between costs, quality, tradeoffs, choices, project management,
etc is way too complicated for someone without some experience in the process
to "get."

"Websites" were the first piece of bespoke "software" that every company
needed. The "how much does a website cost" was a question that "websites-for-
companies" people still don't really know how to answer. Clients are still
bewildered by quotes orders of magnitude appart.

I wonder if the intelligence level here is growing though. An experienced
business owner (say, a 15 year veteran) by this stage will probably have paid
for (or at least been involved in) a handful of such projects.

------
prezjordan
Question for HN (loaded one): What do you consider to be the most "expensive"
app (in history) in terms of development cost?

EDIT: Clarification - mobile app, as stated in the article.

~~~
dangrossman
I'm pretty sure the winner would be the IRS's modernization program, which was
to write new software to process tax returns. It began over 16 years ago and
has consumed over $12 billion (just for the software development portion).

$4 billion was spent on the first attempt at writing this software before they
gave up in 1997 with no usable product. That's a $4 billion "app" nobody ever
used.

[http://articles.baltimoresun.com/1997-01-31/news/1997031030_...](http://articles.baltimoresun.com/1997-01-31/news/1997031030_1_modern-
computer-systems-irs-computers-paper-tax-returns)

It's been a few years since I read about it so things may have changed, but
last read was they spent another $8 billion in the 2000s trying again, this
time outsourcing the development to consulting firms with thousands of
developers. And around 2005/2006 had yet to produce a system the IRS could
use, forcing them to continue processing tax returns with paper and antiquated
systems.

~~~
fosk
The estimated payroll costs for Windows Vista are estimated to be 10B. Now
consider the costs for every Windows version released since 1985, and include
R&D/marketing expenses.

[http://seattletimes.com/html/businesstechnology/2003460386_b...](http://seattletimes.com/html/businesstechnology/2003460386_btview04.html)

~~~
dangrossman
But that's an operating system, not an application. You've got to give credit
to the IRS spending more on one application than Microsoft spent on their OS.

~~~
jrockway
OSes are not particularly complicated. I could imagine that tax laws require a
lot more code (and tests) than dragging some windows around and scheduling
processes. (Neither are easy, of course.)

------
ISL
"I want something that works on anything" -- '97 Subaru Outback Wagon. Hauls
the kids, handles rough roads well, gets through snow, reasonably easy to work
on, easy parts availability, predictable maintenance schedule. ~$3-6000 used
on Craigslist.

------
gabemart
I'm not a developer. I've been considering paying someone to develop an iOS
app for an upcoming project I've been working on which is based around
subscription to a magazine-like service. The application would need to:

* Be built around the Newsstand APIs to display text content

* Allow in-app subscription with a free trial

* Display text content with appealing and highly readable typography

That's pretty much it. Is the $1-$5k range reasonable for an app like this?
From my perspective, it would be about as simple as an application could be
(displaying simple pushed text content) but I realize that as a non-developer
I'm not really qualified to make that call.

~~~
mantas
As a freelance iOS developer, there're a lot of price-defining parts missing.
However, I'm sure it's not possible for $1. I might take on such a project for
$4-5k, but I'd insist on locking down the scope and charge you extra for
anything after basics. I'm living in relatively low cost country mind you..

~~~
gabemart
Thanks for your response. Could you give me an idea of the principle missing
price-defining parts?

~~~
mantas
Few things off the top of my head:

\- How difficult is the appearance? Some people say simple black-on-white is
ok, some want advanced dynamic stuff

\- How much of a design do you want? Custom colors, buttons, icons etc

\- How much content do you want to pack in it? Some huge relatively simple
apps require significant optimisations to work smoothly

\- Who is responsible for the server side of the app? Some people assume iOS
dev will take care of CMS as well

\- Non-iOS services compatibility. Syncing with on-iOS subscriptions, making
sure content looks the same in web app or android or smth.

\- optional minor features that add up quite a lot of code/time. Feedback,
analytics etc.

~~~
gabemart
Thanks for taking the time to help me, those points will make it easier for me
to put together a proposal when I start approaching developers.

I realize your time is valuable so feel free to leave it at that if you like.
Having said that:

What kind of CMS backend is typical for newsstand apps? Are there any free or
low cost solutions?

Are there some standard libraries for covering subscriptions and payments for
these kinds of apps, or is it typical for these to be scratch-built per app?
Is this typically a major feature in terms of development time?

After reading your questions, I'm confident my app will be on the simpler end
of things--black on white, static text-only content with some limited
hypertext, small content packages--but I recognize this doesn't necessarily
mean a simple application.

To be honest, all I really need is the ability to deliver simple PDFs, have
them display nicely, and charge a subscription for it. From outside of the app
development ecosystem, I naively anticipated this would be fairly simple, but
as I learn more this seems less and less true.

~~~
mantas
Making a mockup (preview screens) helps to put all your thoughts together.
Your future developer will appreciate that. Paper&pencil is good, mockups by
Balsamiq/mockupbird/etc allows to add some interaction.

Mockups will allow you to realise what exactly has to happen between the
screens. Maybe you'll want more functionality after that, maybe you'll see
that parts of it are not necessary.

I saw a webapp targeted for mobile apps content delivery on HN some time ago.
Google should find it. It may be faster/cheaper to build a custom solution for
simple delivery. But extending it may cost a lot and reusing out-of-box
solution may be cheaper in the long run. I'm not familiar with NewsStand API
so I can't comment more in this front.

~~~
gabemart
Thanks again for your help.

------
eggmonster
I've been 'struggling' with this lately. I have app dev experience but not
really anything to show in public so I have been offering to do apps at
$2k-ish as a portfolio building exercise. Maybe I anchored it too low or this
is just how it is, but I received a fair few messages asking if I'd go sub
$1000 or work on a pay-if-we-like-it/if we make money basis.

~~~
MortenK
You are going to have very painful projects at that price range. The customers
will be entirely out of touch with reality, if they think below $1000 is
"fair" for an app (or really any kind of custom software). Expect such
projects to drag on and on, and be very sure to get at least some payment
upfront, as these kinds of customers also tend to forget or be "too busy" to
pay their bills.

Also, stay far, far away from the pay-if-we-like-it, pay-if-we-make-money
schemes.

------
freyrs3
Replace the word "app" with "custom software" and you'll see how ludicrous
this article sounds.

~~~
vlokshin
TL;DR ad-lib with "custom software" would be:

Custom Software can cost a variable of extreme prices, depending on who's
building it and exactly what is wanted out of the custom software.

What's so ludicrous about that?

Maybe read the article and not just the title?

~~~
mseebach2
The point is that "app" means application. "What does an application cost?" -
well, is it a CLI that prints the current time in the terminal? Or is it
Microsoft Word?

You can get a fully functional well polished fart button app for both iOS and
Android made for less than $4k, but I doubt you could make something like the
Facebook app on even one platform for $400k.

~~~
bennyg
Any iOS dev worth his/her salt could make a well-polished fart button app in
under an hour and for less than $100.

But no iOS dev worth their salt is gonna' do that.

------
dirkdk
yeah, or as much as a building. Ranging from the dog house to the new Freedom
tower

------
paulnelligan
OR, you could just get off your ass and build it yourself ... monetary cost:
$0, time cost: 6 months, benefit: you now have an extra skillset and the
ability to execute your ideas

Building a car by oneself is unrealistic, building an app is completely
feasible.

------
aes256
It'll cost you a whole lot more if BMW were to sue you for stealing their
start button design for an app icon...

------
Dove
Day-UM! I am not charging enough for Android work.

