Before you launch into the app world, be prepared: developing a mobile app is not cheap, whether you put the hours in yourself, or commission a pro to develop your product. Figures will vary according to the complexity of your app, but regardless, development costs can be fairly high, especially if you plan on developing quite a few.
If a developer is creating your app for you, their charge may vary according to platform. For a really simple app on Android, for instance, £500 is probably the minimum. For a simple app on iPhone, it can go from around about £800 plus. At the higher end, for a more complex app, you could be going for £4,000. Things can get a great deal more expensive than that however. Anecdotally, we have heard of an American development company flying over to a UK client via private jet. Apparently, they wanted to charge £25,000 for the project in question, and a percentage of the revenue too. (We suppose they needed to pay for the jet somehow.)
There are development companies out there who will go for really high prices, and there are companies who will pay it. Raam Thakrar of Touchnote warns: “I know people that have built apps for not much more than a thousand dollars. But I also know of many companies that have spent in excess of £100,000 on an app. Just be really careful of what you put in, because a start-up going into mobile... most of them don’t make money on it.”
If you need a good bit of start-up money to develop your app and to get it off the ground, how you go about securing this investment is another question. You can save, self fund, and start small, like David Carter of The App Factory; or you can try to secure the backing of investors, like Iain Dodsworth of Tweetdeck. His company has the backing of ProFounders Capital, the fund set up by Bebo founder Michael Birch and Lastminute.com founder Brent Hoberman.
“A year ago,” Iain explains, “Tweetdeck was a one man operation. Now there’s 15 people. In order to grow that quickly in terms of resources, in order to build quickly, you need to have an amount of money, but you also need to talk to the right people.” With an investment base you get a lot more than money; through them you are better connected, and are likely to find developing relationships with platforms and providers comes a great deal more easily. “We could have done it as a one man band,” says Iain, “but it would have taken a lot longer to get to the stage we’re at.”
You could also decide to tie your app to a particular mobile service provider, as Raam Thakrar of Touchnote has done with Sony Ericsson; or share revenue with your developers, as Zolmo and Jamie Oliver have done. There are many ways to skin a cat, and as many paths to funding your app.
Even if you don’t have financial backing, you shouldn’t let high development costs put you off, according to Tristan Celder of Zolmo: “If you haven't got the capital to risk and your idea is strong enough, there are ways and means of getting your application produced.” Apparently Zolmo is always looking for strong content partners, and so in this case, the cost of producing an app would be zero as Zolmo would act as publisher.