Building a mobile application can be an exciting endeavour, and all the success stories may lead you to believe it to be true. But after embarking on this adventure, we’ve learnt that it’s not all sunshine and rainbows as the media and internet influencers might have led you to believe.
Development Costs Beyond the MVP
Scope Creep
Startups often fall into the trap of continuously adding new features, thinking each one will add value. However, this “scope creep” can lead to increased development time and costs. It’s essential to prioritise core functionalities and defer additional features to future updates.
Of course, some scope creep needs to be accounted for as software is a never-ending process anyway, and you might not have all the pieces of the software puzzle put together at the start until you start uncovering insights, workshopping ideas, and moving things around before you uncover the final result.
API Integrations
Integrating third-party services like Stripe for payments, Firebase for analytics, or Twilio for messaging can enhance your app’s capabilities. However, these services often come with usage-based fees that accumulate over time, impacting your budget.
Performance Optimization & Debugging
Ensuring your app runs smoothly across various devices requires rigorous testing, bug fixing and deployments. Unexpected bugs and performance issues can arise, necessitating additional development time and resources to resolve.
This is because each mobile device has its own hardware, components and ‘flavour’ of operating system. Meaning there could be a small incompatible software feature that the developer did not know until they hit that roadblock.
Infrastructure & Hosting
Cloud or Server Hosting Costs
Hosting your app on platforms like AWS, Google Cloud, or Azure involves costs that vary based on usage, storage, and data transfer. We usually recommend renting a managed server instead of using cloud hosting to avoid unexpected spikes in activity which leads to a hefty, unexpected bill.
Real-time Features
Implementing features such as push notifications, live chat, or geolocation tracking enhances user engagement but requires robust infrastructure, leading to increased development and maintenance costs.
Database Scaling
As your user base grows, your database needs to scale accordingly. This scaling can lead to higher costs for database management and hosting services.
A lot of these infrastructure costs can be mitigated by using a managed or barebones server instead of the popular cloud services that charge by usage. Especially as you start scaling, the usage-based model quickly becomes an expensive exercise.
App Store Fees & Compliance
Apple & Google Play Fees
Both Apple and Google charge fees for app submissions and take a percentage of in-app purchases. For instance, Apple charges a $99 annual developer fee and takes a 15-30% commission on in-app purchases. Simliarly, Google doesn’t have an annual developer fee, but also takes a 15% to 30% commission on any money generated.
Regulatory Compliance
Adhering to regulations like GDPR or CCPA is mandatory and can incur additional costs for legal consultations and implementing necessary features to ensure compliance.
Many apps tend to start their life in the local country of operation as learning and adhering and adapting the app to overseas markets becomes a headache to manage with so many factors to balance, just to be compliant with local laws.
Code Compliance
One seriously overlooked and hidden cost is the fact that both Apple and Google continuously change and update their code requirements, meaning you need to have a team ready to understand and adopt the new code changes and update your app accordingly and usually in a timely manner or risk your app being delisted.
Security & Legal Considerations
Data Privacy & Security Audits
Protecting user data is paramount. Investing in security measures and regular audits helps prevent data breaches but adds to the development costs.
Legal Liabilities
Unexpected legal issues, such as intellectual property disputes or user privacy complaints, can arise, leading to additional expenses for legal defense and settlements.
Marketing & User Acquisition
App Store Optimization (ASO)
Optimising your app’s listing to rank higher in app store searches involves keyword research, compelling descriptions, and high-quality visuals and ongoing requests for reviews and monitoring for bad reviews to gain user insights.
Poor reviews can result in having your app lower in the search results, and reducing the chance of a user installing, opening and using your app on a regular basis.
User Acquisition Costs
Attracting users through paid advertising, influencer partnerships, or public relations campaigns requires a dedicated budget, often underestimated by startups.
Metrics such as Cost Per Acquisition (CPA) or Cost Per Download are suddenly the key metric you review and think about on a regular basis. The onboarding process, how many user registrations vs. user downloads, becomes a very important reporting point to ensure the apps’ survival.
Retention & Churn
Keeping users engaged is as crucial as acquiring them. User engagement strategies, such as regular updates and personalised content, helps reduce churn rates but adds to ongoing costs.
Moreover, due to the limited attention span of how apps and just how mobile phones work in general, all that effort to get a user to open your app can be quickly dispelled by another notification.
Ongoing Maintenance & Scaling
Bug Fixes & OS Updates
Post-launch, your app will need regular updates to fix bugs and remain compatible with new operating system versions. Your testing would have only been on a select handful of devices which are available to you, and you surely would not be able to test and account for each and every hardware + OS combination.
The worst part is, you’ll likely learn about these bugs from 1-star reviews. You can do some things to mitigate and turn these around, but majority of the time, you only have one chance to actually make a positive impression on your user.
Tech Debt
The ongoing problem for many software developers, is opting for quick, less optimal solutions during development can lead to technical debt, requiring more extensive refactoring later, which can be costly.
Scaling Challenges
Rapid user growth is a good problem to have, but can strain your infrastructure if not anticipated, leading to emergency scaling efforts, increased costs and potentially downtime whilst you upgrade your systems.
If not clearly and communicated quickly, users are fast to switch their allegiance when it comes to apps, however, the flip side is investing in infrastructure that is not required. ie: your app flopped or the user numbers are not an overnight success. Therefore striking the right balance between these two sides is an art in itself.
Team & Support Costs
Ongoing Developer Costs
Deciding between in-house development and outsourcing affects your budget. In-house teams offer control but come with higher overheads, while outsourcing can be cost-effective but may present communication challenges.
Customer Support Expenses
Providing quality customer support through various channels requires investment in support staff and tools, contributing to ongoing operational costs.
Business Operations Expenses
Additional expenses such as analytics tools, legal fees, and administrative costs are often overlooked but essential for smooth operations.
According to the latest Clutch survey, the average minimum cost to develop a mobile app is between $10,000 and $49,999 USD (or about $15,000 to $78,000 AUD). That’s the average as well, so adding more features and complexity only increases this cost, plus the survey doesn’t take into account marketing and promotional budgets.
Mobile app development is a very serious and lengthy endeavour, not for the faint of heart. Your idea needs to be well thought out, with a carefully considered development plan as well as an ongoing promotion and marketing plan. You can use a tool such as Estimate My App which gives you a clearer breakdown of not only what expenses you’ll need to account for, but also how many features to cram into your MVP to keep things lean and moving along to the next stage.
