I’m going to use this space to clear up issues around how pricing works at Zeus River. Our pricing is fairly consistent with how most small shops handle software development, so this post should be useful for independent software developers (sellers) as well as potential buyers who are cautious about sticker shock.
Every vendor attempts to maximize price point based on what he/she believes your demand curve is. You can be sure that once a vendor understands what you are asking for, they will have a good idea of how much you are willing to pay. If you want to get the best possible price for your mobile app, you must recognize which of these seven buyer categories best describes you:
1. You’re an individual who has an idea, and you want to strike it rich on the App Store.
You don’t want to go through a process of strategy, design, test, support or promotion. You’ve already drawn out how the app will work and you need someone who can code the screens, interactions and UI elements. Ideally, this person will not be compensated upfront; they will simply share in the profitability (and risks of failure) that the app generates.
Your best bet in this scenario is to find a freelancer on oDesk or elance. Unfortunately, between the poor quality of work, and the lack of face-to-face interaction, offshore online development carries the highest risk as a buyer. Communication is limited, corners are cut and project satisfaction is not guaranteed. Still, you can’t beat the price…
Price: $1,000 – $5,000
2. You’re an individual who wants to build a demo app / proof of concept to sell an idea to an investor.
You want to pitch an idea to investors or apply for a government grant, but first, you want to build a full-featured prototype. You need minimal support with strategy. You’ll handle some portion of the app building yourself. You aren’t looking to build a completely functional app, and you’re willing to live with no testing, support and update services.
Price: $10,000 – $15,000
3. You’re a firm that wants to build a full-featured mobile app for a marketing solution.
You are a marketer yourself, or you’re a design or ideas firm with a solid UI/UX base, and you want high-quality, hard-to-find development to complement your skill set. You want to make something entertaining, useful and consumer-focused. Your ROI is based on metrics like engagement, number of views, followers, etc. You believe that the right product, coupled with the right amount of buzz, can help your brand. You have no technical skills, but you’re a gadget freak to the core so you’re already familiar with mobile technologies.
Price: $15,000 – $30,000
4. You’re a firm that wants to build a full-featured mobile app for an enterprise solution.
You intend to make money off the app or its connecting technology. You want a full team that can provide strategy, design and support for the service. You have an in-house team of subject matter experts who will provide guidance on industry focus. The success or failure of the mobile app is your full-time focus.
Price: $30,000 – $50,000
5. You’re a firm that wants to build an enterprise solution with a mobile accessibility component.
You’ve thought about hiring someone full-time on salary to build this solution, but the project is critical enough that you want to use a team of highly trained experts. You likely want a full-featured web analytics portal so that your administrators can login and view statistics on who, where and how people are using the app. There may also be integration points to third-party services.
Price: $50,000 – $100,000
6. You’re a firm that wants to build a full-featured video game.
You want to build a high-end game with heavy graphics, 2D animation, built-in support, extensive game dynamics and innovative designs (think Cut The Rope or Angry Birds). If you want to compete with existing publishers in this space, the floor starts very, very high.
7. You’re a firm that wants mobile to be the core of your corporate strategy.
If you’ve reached this point, it makes sense to think about bringing software development in-house. You want to pay for the developer salary, overheads and training. A good example of this bucket is Hailo, which recently launched its service in Toronto. Their team built a mobile app in-house as a critical part of their strategy to disrupt the taxi industry.
Most tech-focused agencies of less than 10 employees use this framework as a rough pricing guide when they sell software development and design services, assuming a 15-25% markup on development costs. Again, I stress that this is a ROUGH guide. Companies who rely on offshore development will generally be on the low ends of the scale; companies with brand names and large development teams will generally be on the high ends of the scale.
Thanks to 401K for the photo above.