- It can cost around $50,000 to hire just one software engineer. Experienced engineers will have a yearly salary averaging $148k.
- Uber spends > $1.4 billion a year on development, they make > $3b / year and it’s still “not enough” to make them profitable.
- Kylie Cosmetics has no developers on her team and pays $480,000 annually, plus 0.15% of sales for her software.
- A simple portfolio / personal website with Wix would be around $100–200/year.
- You can find developers on Upwork for as low as $8/hour.
With all these variations, the question is not how much software costs to build, it’s what kind of software you can get within your budget. Your budget can be $10 or $10 billion and that’s how much the app will cost. Next, we’ll list the biggest factors impacting the cost of your software project. Our goal is to help you understand the landscape so you can ask better questions.
The cost of building software is mostly going to be the cost of the team you need to assemble to do it. In terms of functions/roles the team should at least consist of design, architecture, frontend, backend, mobile, devops and product management. Team members with expertise in data science, artificial intelligence, or another specialized field may be required depending on the complexity and focus of the application. The salaries and hourly rates for each of these individuals vary a lot. Assembling a team is a balancing act between experience and costs. Conservatively, putting the right experience together to build a team can cost upwards of $600k. There’s no wonder why companies raise millions to build out products.
An “app” can be built in a weekend by a student using the right tools and taking the right shortcuts. The same app can take a year or more to build for a startup with $10M in the bank. These apps will be vastly different. The student may be able to “demo” their concept, and the full-fledged team may be able to create a sophisticated application that can withstand a large consumer base.
The obvious factor of how much an app will cost is how much you can spend on it. We’ll walk you through the different paths taken by business owners when they have different budgets and our recommendations for each path. The product will be quite different, but luckily there is a point in which more budget does not necessarily mean a better product.
Without knowing the specifics of your situation, we can’t tell you how much you need to spend to get the app of your dreams, but we can share a few stories to help you figure it out for yourself. We will go through them, one by one, from least to most cash intensive.
A founder builds their own product.
|It’s easier to fundraise with a product Its cost is in time rather than capital. You bring your vision to life.||You are alone. It can take years. You don’t know what you don’t know.|
Our advice: Try to do this. If you find it easy, go for it. If you find it hard, the opportunity cost of your time might not be worth the cost-savings. If you are strapped for cash, here are a few things you can do to move the vision forward without diving into development.
A founder finds a tech co-founder who has little or no expenses and convinces them to build their app for 30%+ of their company.
|It’s easier to fundraise with a Computer Science grad on the deck. It costs you less up front. You are not alone.||Sharing the company means sharing the vision. These people are scarce. Tech experience does not come with business experience. This is a race against the clock. No cash deals are not sustainable even for the most privileged people because of their opportunity cost.|
Our advice: If you go down this path, make sure you are being realistic about expectations, honest with yourself and your partner about commitments, and have a four-year plan. This is the type of path where things always take longer than planned and ends in co-founder breakups.
If you want to know wether looking for a tech co-founder is right for you, check out this video by Michael Seibel. If what he’s saying matches the reality of your network and situation, then follow his advice. Otherwise we suggest doing things differently.
If you’re considering going solo, you’re in good company. Check out this Wharton research paper backing up your choice. Many investors still have a hard time with this, so the question to ask yourself is if fundraising ease is more important than optimizing for sustainability, longevity, and revenue. If the answer is no, this list of investors might be a good place to start.
A founder spends as little as $5-20k on the cheapest developers they can find.
|Relatively inexpensive up front. These people are common, there is a lot of competition, and it’s a buyers’ market.||You get what you pay for. This will most likely be throwaway code. Risky. You don’t know what you don’t’ know. The difficulty of managing across time zone, language, and context.|
Our advice: If you are tight for cash, you can opt for spending on advertising and providing your service/solution in a lower tech way rather than jumping into development. If you are going to work with more affordable developers, we suggest you find someone knowledgeable enough to define requirements and manage development. They can be compensated with equity and have a more managerial role. This person could support your vision, but be uncomfortable with the risk required to commit full-time to a new venture. This can work incredibly well if your goal is product validation, and will be a great stepping stone towards fundraising.
If you have a seed round of over $200k, you may be able to hire an engineer to build your product. Combined with a modest amount of equity you can spend the year working on both product development and business development alongside each other.
|You have a partner without having to give up a lot of equity. You can find a high-quality person, have constant contact, and a short feedback loop.||People who are willing to do this are rare (but more common than the sweat equity path). No one is the best at every function, and you will be counting on one person to do the work of a team on their own.|
Our advice: This person should be focused on their core competency and complement their skills with freelancers and other contractors. You should decide if your priority is user experience or core technology and hire accordingly. Be honest with them about your runway, your goals, and your expectations. Make sure you have a full-time need. If your product requires 3-6 months of building, having someone full-time might lead to overbuilding or idle hands. Neither of those is good for the business.
If you are fortunate enough to have the track record needed to raise a million-dollar seed round pre-product, that’s awesome! You can hire a full-featured team of the best talent Silicon Valley has to offer and build the product of your dreams. There are still some downsides though.
|You can afford the quality of talent that you need. You can hire the best and build the best product for your users.||You will spend a million dollars on making your product. You might feel validation from raising money before actually validating the product. You might need to raise money again before you’re ready to support your payroll.|
Our advice: Focus on finding and validating your product-market-fit before building the team. Being able to afford a team doesn’t necessarily mean that’s the best route forward. At this stage, the product and business will likely change, and the earlier on you hire an in-house team, the less flexible you can be with your vision. If you want to keep your options open, don’t be Uber, be Kylie.
Having experienced each of these scenarious first hand, our founder started Get It Built with the guiding principle that building profitable businesses using technology is better than building venture capital dependent businesses. Our advice is for profit-focused rather than valuation-focused businesses. We are here to create paths for different types of technology businesses. This is the story we are here to facilitate.
You find a market you want to serve. You validate that they have a problem that they are willing to pay to solve by selling them a low-tech solution. Once you’re confident there’s a market for your idea, you can come to us. With an investment of $10-30k, depending on the complexity of the business, we can deploy engineering, design, and product experts to collaborate with you on defining your product’s design and technical requirements. At this stage, we are focused on the visual and technical aspects of bringing your vision to life. We don’t take any equity and require no further commitments. After this phase, you will have a visual representation of your product, technical specifications, and an estimate of the development costs. You can use that to fundraise from investors, continue selling your solutions, pre-sell the product, or use an alternate funding route. With a validated solution and a clear roadmap, you will be talking to investors with more confidence and leverage than ever before. After fundraising, you can come back to us to build the product or take another route that fits your situation better. We are best equipped to work on projects with budgets in the $50-500k range. Our process aims to combine the best of both worlds; you have a world-class full-featured team at your disposal without the commitment of having them on your payroll. By focusing on deliverables, we can deliver high-quality software at a fraction of the cost of hiring a team. We are most often a good fit for monetizable products, so that after we build, you can launch and start seeing the fruits of your labor come in. Likewise, after launch, you can decide if you are ready to hire an internal team and we’ll hand over the code, or if you prefer, we can also continue maintaining it for you. Our process is designed to support founders who want to build their businesses on their own terms.
|Rather than an all or nothing approach to business, with us you have the flexibility to make decisions balancing budget, product, and timeline at each step of the way. This flexibility increases your ability to manage the risk of the business to adapt to how investors, consumers, potential team members, and stakeholders respond to your product.||The biggest drawback of our approach is that you are not getting team members, rather you are leasing our expertise and buying the deliverables that result from our work. For this reason, we can build high-quality products at an affordable price, but you should keep in mind that this affects the day to day of your business as well as investor perceptions.|
We hope this post helps you understand the many different ways there are to build tech products. Each path has a different price point and various potential pitfalls. You can start a successful tech business in any of these ways. If you think the Get It Built way could be right for you, we are gladly here to help.
Ready for the next steps? Learn more about how we can help or let us know about your product needs to get a customized roadmap.
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