Allen Pike • August 21, 2013
So you have an idea for an app
We get a lot of inquiries each week about app development or consulting. Most of our clients are existing businesses who need an mobile app or site for strategic reasons. Sometimes though, we get folks who are simply excited about an idea and are looking to have a Vancouver shop build it out. We love to have passionate startups as our clients, but here are a few common surprises that are worth heading off before we get started.
An app costs as much as a car
Building an app takes a lot of time and consideration, and for a high quality app that works well across platforms much more so. As a rough rule of thumb, an app costs as much as a car. It may cost $5k for a marginal one, $50k for a nice one, or $500k for a really spectacular one. Of course, the more features, screens, and platforms involved, the more expensive the app will be. When you’re crafting your business plan, keep this in mind when considering funding and feasibility.
Consumer apps are very hard to bootstrap
We absolutely love working on polished, beautiful consumer apps. It’s fun, right? That said, an app designed for normal consumers is rarely profitable. In most cases, consumer-oriented startups need millions of users in order to break even, which almost always ends up being via advertising. In order to get to those millions of users, you will usually need outside investment, which means you’ll need a plausible argument for investors about how you will build a $100 million business. There are many bright ideas for social networks and photo sharing apps that, while they would make nice apps, are not sustainable businesses.
Developers have 100% equity in their own products
This happens less frequently to Steamclock now that we’re larger, but prospective clients sometimes ask developers if they will accept equity in return for development services. Studios will not generally agree to this, since they usually have their own products on the go in which they hold 100% equity. Although we enjoy building great apps for great clients, we’re always folding the profits from our consulting work into building new apps like Party Monster.
You need an unfair advantage
If you are very concerned about NDAs and keeping your idea secret, you are likely going to have a hard time competing in the market. Be thoughtful of the “Second-mover advantage.” Unless you have an unfair advantage in this particular business, then you are in serious danger of being outcompeted, regardless of NDAs or patents. Unfair advantages may include technical ability, inside connections in the target industry, or exceptional financial resources. In the end, the success or failure of your idea will depend on the excecution, not the uniqueness of the idea.
If you’ve read through this and find yourself nodding along, then let’s chat and see how we can help. In addition to our usual software design and development services, we also do product strategy and startup consulting. Alternatively, seriously consider learning to develop apps yourself. It’s a serious time investment, but will make your startup idea a lot easier to get off the ground.