How Much Does It Cost To Build a Web App?
“How much does it cost to develop a web application?”
The answer to this question is what every client wants to hear from any development company – even before they describe what they want to receive in the end.
“All the money that you have, or maybe just a fraction of that.”
This is the answer every developer can give you right away, and there’s some truth in it. Sounds generic, vague, confusing, and unfair? Yes, but so is the question, if it’s put that way. The thing is, in the world of web app development pricing, there is no one-price-fits-all-apps approach – and there never will be. Why?
Because web application development costs depend on a variety of factors based on the type of product you want to receive (MVP or ready-to-market), the maturity of the end product (as the development process can be infinite and ever-evolving), the features it should have, and many other variables.
But let’s return to the cost issue and why it even exists.
It’s all about the perspectives of the clients and developers.
Clients often want to hear a certain figure for the product they’re thinking about. From the client’s perspective, getting a ‘figure’ will solve a lot of problems and simplify their decision-making. Unfortunately, getting a figure alone is never enough, because you’ll also want to understand what you’ll get for this amount and what risks may be involved.
On the other hand, developers want to know how much money the client is willing to invest in the project. Often, clients are concerned about the implications of such a question, though to the developer it’s a perfectly normal question to ask. The answer will give them an understanding of what kind of product they can create with the given terms and resources. This sometimes generates confusion, as both camps think they’re justified in asking what they’re asking.
In this article, I’ll describe the factors that influence web app development costs, explain why the client should be open about their project budget, and what every client should keep in mind before asking any team to create a web app.
The Anatomy of Web App Pricing
When I talk about web app development, I don’t mean just coding. Why? Imagine a web app that works perfectly on a single computer. No matter what app it is, it’s not doing anything useful, just making the computer produce hot air. To be effective, the app needs two things:
- To be connected to the outside world through user interfaces or integrations with other systems, for both input and output. The result of the program’s computations must impact the world.
- To solve specific problems that users encounter by either leveraging expert knowledge or enabling better decisions with the help of additional information.
When we look at it from this angle, it’s clear that app development requires a multi-disciplinary team. I’m talking about products here. Developing a web app includes several types of engineers, testing, analysis, design, formulating product hypotheses, and managing the process. So it’s important that the client understands the difference between product development and writing a piece of code.
Now let’s dig deeper into the subject. Why do we even need cost estimates? I see three main reasons:
- Budget planning. Apart from development itself, you’ll need to include additional steps such as testing and marketing (at least). Plus, there are always other cost contingencies to account for.
- Assessing the idea’s viability. What might seem a simple idea can ultimately involve complex development solutions. Maybe there are already lots of apps like yours, so you’ll need to think of a creative way to make it profitable. And when you know approximately how much it will cost, you should answer one simple question: can you afford it?
- Pitching ideas to investors. When you talk to them – and you will talk to them – forget about words like ‘game-changing applications’ and ‘huge market opportunities’. Nobody’s interested in your unique concept unless it can turn a profit. What you need are the expected revenues and costs of your web app supported by realistic and detailed assumptions and projections.
If you try to Google how much web apps cost, you won’t find a thing. Here’s why: it’s difficult to figure out exactly where development stops. Most consider a web app as finished when it’s deployed to production. However, as soon as you go live, you’ll think of a new feature you want to add.
You probably wish there was a Magic 8-Ball that could answer the question: ‘How much money do I need to make a web app?’ (Alas, there isn’t.) I also know how tempting it is to skip the calculations and questions and start the fun part – developing. But this is a big no-no, because you’re likely to end up at the stage of “Wow, that was a great idea!”
The next section will help you move beyond that stage and achieve decent results.
Web Application Cost Approach Number One: Thinking in Bets
There will always be unknowns or ambiguous elements associated with building a new web app (because it’s new, after all). One approach is to think of these things as bets or hypotheses to test. When we get a new idea, we’re full of optimism and sure that it will work. But for any idea to work, there must be enabling factors or some assumptions that must be true. The riskiest assumptions should be tested first. That way, we learn about the real-world limitations of our idea and can try to adapt it to reality to make it work.
What are the most common assumptions that need to be tested first? Here’s a list based on our experience:
- Demand hypothesis. This hypothesis tests that there is demand for a product that solves this particular problem. There may be a smaller number of potential customers than initially anticipated.
- Value hypothesis. When there is proven demand for a product to solve some problem, there may be traditional ways to solve this problem. For customers to want new ways of doing things, the solution must be valuable enough for them to consider switching.
- Feasibility hypothesis. Is the idea achievable given the current level of technological progress?
Betting on different ways to validate the hypotheses is the most fun part of the process. You may be able to check whether there is demand for a new product by building a landing page that outlines all the benefits and provides a call to action for the user. You can do this without building the product itself or vaguely estimating the cost to build a web app. This is the smartest way to build products, because you get feedback faster and can adapt and learn along the way. It’s the Lean Startup approach.
A great Quora answer states what first-time entrepreneurs often miss:
An idea is not a design; a design is not a prototype; a prototype is not a program; a program is not a product; a product is not a business; a business is not profits; profits are not an exit, and an exit is not happiness.
What you should take away from this quote is that product development logic will have certain maturity stages, with lessons learned at each turning point. It’s important to assess where you are in the journey and what stage you want to get your product to. Why? Because each stage will require different resources, decisions, and performance of different functions, and the focus will be on different features.
Another point to consider is product maturity. Do you need to test an idea and create an MVP just to see how it goes and then develop it more, or do you want your product to start generating revenue the day you launch it? Do you just want to prove your marketing hypothesis, or do you have solid market research that proves this product will be a huge success? Your answer to this question will influence what you can expect as your custom web application development cost.
Betting and Development Are More Similar Than You Think
At this point, you are probably wondering why I even try to marry the two and start questioning if developers put stakes rather than actually working on problem solutions. The thing is, when gambling, you can either win or lose. In development, you’ll always win by having the app designed – but at what cost?
Let me explain what I mean by that.
App development is much like betting: you have an idea of the stakes (the world of apps), you know how much you can bet (the budget for your product) and that you might end up with the minimum win or earn a lot (that your app will become a huge hit or you’ll need to try again). Elaborating on any product-related idea is betting on whether it will work or not, and here nobody is immune to mistakes. Sometimes they occur regardless of what you do, simply because the product development revealed issues that wouldn’t have been possible to notice otherwise or your idea of the product changed (for instance, the MVP hasn’t found much acceptance from the audience it was built for, even though your market research indicated the demand was there). Only the market response proves the bet was right.
Another reason why I say that web development is like betting is that you place stakes now with the knowledge and money you have. So it is with development. You can’t possibly predict how people will interact with certain apps or what issues you might face when, let’s say, your traffic is double the expected amount. You must deal with the resources you have and the problem you face with that perspective in mind.
Web Application Cost Approach Number Two: Imitation (And Why It Rarely Works)
Previously, there were two common approaches to developing an app: you knew what end product you wanted or what product YOU wanted to imitate. Both approaches are still common. Regardless of which one you choose, your web application development cost estimate won’t be exact. The reason for this is that your original (or imitated) idea might not become the final product. Inevitably, there will be a million decisions to be made regarding your product’s services, features, and efficiency because of the new knowledge you’ll gain from testing, validating, or launching it. This is knowledge you can’t get before deploying the app.
Here’s an example of why changes are inevitable in both scenarios.
The end-product approach
You want to build a social network for ravers who want to find fellow music lovers to go to parties together. The initial idea is to build an ordinary Create an Account login system. However, how do you make users believe the people in the app are real? You’re not allowing them to create a rave account, only log in via Facebook.
That’s the kind of change I was talking about. Rule of thumb: deviations from the original idea are 99% inevitable.
Here’s the imitation product approach
‘Dude, let’s build Trello, but with video charts. It should cost the same, maybe a bit more as I add a few features’.
No, it won’t. In fact, because the technologies have advanced since the original Trello was launched, chances are it might be cheaper to if create the EXACT SAME THING. But even if you do build a video charts-based Trello, the code and functionality will be nothing like the original.
But that’s not the only problem.
If you want to build a modernized version of an app that already exists, you need to think twice and answer these questions:
- ‘What is the value to the end-user?’ and
- ‘What kind of changes do I want to make with my app?’.
When your approach is “Trello costs X amount of money, so I need pretty much the same”, we’ll disappoint you twice. First, you CAN’T create the same thing because of copyright issues and possible intellectual property litigation. Second, your products’ novelty and not-the-sameness will cost you a lot. And the worst part? Nobody can’t name the exact figure right away.
Building web apps using this approach is a big no-no because the app will most likely be far more complex than it seems. It’s hard to predict what elements the app will consist of, so the technology you’re going to use will be equally unclear, as is the final cost.
Web Application Cost Approach Three: Microtasking
This is a more traditional approach to estimating web application development costs. It’s based on collecting requirements and breaking them down into very small tasks that can be estimated. What is the problem with this approach? It requires a big upfront effort in top-down design. The way we do it at Django Stars is by arranging a Planning workshop with the engineers that will be delivering the project in the Pre-Development phase. This approach requires well-documented requirements and upfront assumptions about where we can’t make a decision at the planning stage.
The upside of this approach is that you end up with a detailed estimate with potential risks and assumptions identified and an engineering commitment to deliver with the currently available information. It may include different scenarios and simulations (optimistic, realistic, pessimistic, etc.) because humans cannot predict the future. The same feature may have a different cost depending on the type of product, its purpose and novelty, interaction with other features, and so on, not to mention the fact that the number of these features may differ drastically from product to product. So, if you’re asking ‘Is there any certainty regarding how much a web app costs?’. The answer is: kind of, and it can be found in the form of budget planning.
Wait, what? What does budget planning have to do with the features?
The thing is, budget planning gives you an idea of who, how much time, and how much money you need to spend to develop a particular feature during a particular stage. Here, you should define the stage, list the desired outcomes, create a workgroup, set the hourly rate, figure out how much time each task will take, and then add it all up. The result of the multiplication and addition is your estimated web app cost for developing features and taking the product to the desired stage of maturity.
Our Approach to Web App Budgeting
At Django Stars, we differentiate the terms ‘engineering estimate’ and ‘budget quote’, and it’s very important that our clients know the difference between the two.
Budget quote is normally done during initial phases of communication with potential clients. It’s a high level overview of how much a product like this might cost. It’s based on:
- Initial product information from you
- Our experience from building similar products
- Quick wins that we see on the table
- High level scope that we agree during negotiations
The downside of this approach is that it’s not very exact; this is a minimal commitment at which we expect to deliver value to you. The upside is that it can be done quickly and without signing a contract. This helps you decide whether to go forward with your idea or not.
Example: You have an idea for a product and ask us how much it will cost. We arrange a call, figure out the product details, leave a ‘surprise’ percentage, and then tell you who you might need, what functions the product will have, and how much it will cost. In this scenario, we use the ‘betting’ approach for all the unknown unknowns and can’t guarantee this will be the final price.
Alternatively, if you know the input data, you can use our web app cost calculator to estimate the financial side of your project yourself.
Engineering estimation shows a particular amount of money, specialists, and time needed to implement your idea. It’s a commitment of the engineers that will be responsible for the delivery of your product. The thing is an engineering estimate can not be done without prior research, processing the product documentation, and defining the end goal. We call it the discovery phase.
The 3 Stages of Discovery Phase:
- Creating engineering tasks based on the product goal, user roadmap, functionality, etc;
- Choosing the scope of work;
- Estimating the cost of everything needed to complete each task.
After the discovery phase, we have a clearer picture and can work on the uncertainties and come up with a more detailed budget planning so you could better plan the product development workflow.
Example: You describe your project and then we do thorough research based on your desired outcome. We assess the idea, evaluate it, create a budget and state the price. If you agree with what you see, the work begins. Unlike an estimate, here you know what you’ll receive in the end and how much money you’ll pay for it.
What are the hourly rates of web development companies around the world?
Like everything else related to web development, it depends. The main factors are the country the developer is from, the developer’s domain and level of expertise, the development company’s position in the market, and the type of product. Below are the average hourly rates of web developers globally.
|Eastern Europe||Asia||Latin America||Africa|
Of course, these numbers won’t mean a thing after you tell the team what you want, but they can give you an understanding of how much their work can cost. So, if you know who you need to involve and how long the process might take, you can estimate the minimum cost of your app and see how much money you’ll need to invest. After you do that, talk to the team you choose and be ready to add a few zeros.
At this point, chances are that you may not have the answer to the ‘how much does it cost to build a web app’ question in the form of a certain number. And oddly enough, that’s what I hoped you’d come away with. No reputable development company will give you an exact cost without first taking a deep dive into the product details, specifications, expectations, and goals. My other point was to show the inside of the development world and explain why the unknown, unforeseen, or unprocessed factors can cost not only money but also potentially kill the project. Finally, I also showed how to eliminate most of the uncertainties, stick to your budget, and still get your project done.
- How much does it cost to build an app?
- There’s no universal price for developing a particular app, as it depends on the type of app, its features, your goal, and the problems the app targets. However, you can ask a development team to provide you with either a rough estimate or a detailed budget, depending on your input data and the team’s experience and qualifications.
- How do you estimate the price of an MVP?
- To estimate the cost of creating an MVP, you need to list the scope of work based on its functionality and features and estimate each task depending on who’ll be assigned to do it.