If you’re considering building an app, you know the price of apps vary.
Like goods and services, your options range from super cheap with caveats to “arm and leg” prices. This range exists for everything from plumbing to whiskey to cars, and it’s no surprise it applies to apps as well.
What you’re less clear on is why app pricing fluctuates as much as it does. You assume it has something to do with who you hire and what you’re building (key factors in every service price), and that’s true.
However, there are some other ingredients many founders overlook.
What key factors influence the price of an app?
These five factors influence the overall price of an app:
- Who your customers are
- What type of app you need
- How your app provides value
- Who you hire to build it
- How soon you need to launch
We take a look at each one below, starting with the most important.
Who are your customers?
Who your app serves determines every other factor: the type of app you need, what needs to go in it, and who you hire.
Unfortunately, many founders breeze past this question. They assume their app is for “everyone,” assume audience comes later, or assume their incredible product will auto-magically attract the right kind of people. Any of these assumptions effectively book your ticket for the struggle bus.
The better approach is to define a target audience. Your target audience is always a specific group of people with a particular set of needs. Here's an example: HR managers at high-growth startups with >100 employees. This audience will have different needs than HR managers at established enterprises or founders operating as HR at startups with <50 people.
It's important to define your target audience because not all audiences are created equal. Some have more expensive needs than others.
For example, enterprise customers need apps that pass rigorous security checks and provide many user management features, such as single sign-on. These checks and features increase the complexity of an app and the amount of time a team spends building it, which makes the app more expensive.
Likewise, apps for mission-critical roles in business (hosting, for example) will need heavy testing. This will be more expensive as well.
...not all audiences are created equal. Some have more expensive needs than others.
—Krit
What type of app do you need?
When most people hear the word “app,” they picture a piece of software on their phones. But there are quite a few different types of apps, including native, web, and progressive.
In fact, there’s a whole spectrum of app options.
On one end of the spectrum, you have native apps. These are the kind most people think of—the kind you download on your phone. On the other end, web apps are desktop or mobile, and they run inside a web browser (like Chrome or Safari). You can read about the nuances of middle options on our original post about the spectrum.
The type of app your business needs depends on who your customers are (seriously, everything comes back to them!), what kind of data you want to manage, your budget, and other factors. Check out the flowchart below for extra guidance on choosing one end of the spectrum.
In most cases, native apps are more expensive than web apps. If you’re choosing between native apps, the cost of iPhone and Android apps are roughly the same.
What value do you need to launch with?
Whichever type of app you need, it must deliver value to customers. That’s the only way to succeed in today’s user-driven world. Quick recap on how to do that: You deliver value by providing benefits, and you provide benefits through features.
That’s a mouthful, so take Google docs as an example. One specific way Google docs adds value to my life is by making it easy for me and teammates to collaborate on writing pieces when we’re hundreds of miles apart. The benefit is easy collaboration. And the features that enable this are sharing, commenting, editing, and revision history.
When you’re building your own app, you want to start with the value you provide and work backward to the least number of features you need to provide that value. (Want more detail? We walk through this in our post on the Starbucks app.) The list of features that need to go into your app is called scope.
The general rule is this: The bigger your scope is, the more your app will cost; the more features you want in your app, and the more complex each feature is, the more it’s going to cost. For example, when we looked at how much it’d cost to replicate a lot of what’s in Slack (a large scope), the price tag came in around $153,000. When we looked at how much it’d cost to build an MVP of the Starbucks app (a smaller scope), the price tag came in around $70,000.
Go big or go home?
Most founders are tempted to go big on scope—to include as many features and items as they can afford—even when they’re building their first version. We understand the temptation, but we strongly caution against it. Feature-packed apps are expensive and take a long time to build. Plus, if you’re still learning a lot about your customer base and niche (as most early-stage startups are), a leaner app will be easier to course-correct than a feature-packed one. Since every app changes once it’s in customers’ hands, this is very important to keep in mind.
Andrew Morris, one of our clients and the founder of Greynoise, put it this way: “You can always come back. Perfect is the enemy of good. You need to get something in people’s faces as soon as possible.”
To nail down the minimum scope you need to solve a customer’s problem, we recommend going through our roadmapping process. We’ve publicly shared the step-by-step process and templates we use in our own Roadmapping Sessions, so you can replicate it wherever you are.
"What goes into the first version of an app?" is a question we've spent years figuring out how to answer. You can steal the exact process we came up with. It's in our roadmapping post, linked above.
Who are you hiring to build the app and where are they located?
The “who” part of the pricing equation has two counterparts: what type of partner you hire and where they are located.
There are two types of partners you can hire: a freelancer or an agency. The median hourly rate for a freelance mobile app developer ranges from $61-$80, though some elite freelancers charge $150+.
If you hire a freelancer to build your app, you can expect an hourly rate between $50 and $150+. Rates vary according to the skills and experience the freelancer has.
Agency rates range from $125 to over $800 per hour depending on the size of their team, location, and whether they serve small businesses or enterprises.
These price ranges are all for US domestic options. Offshore freelancers and agencies are often ⅓ to ½ the cost of domestic providers. However, you’ll want to make sure you’re up for communicating across time zones and other challenges if you pursue an offshore provider.
We cover when to hire a freelancer vs. agency, the various pricing structures each offer, and how to outsource well in our outsourcing guide.
What's your timeline?
While app developers (freelancers or agencies) can build an app quickly, there are a few steps most founders tend to forget.
These are:
- Researching and interviewing potential partners
- Discussing and negotiating the project
- Scheduling the project and onboarding
Researching and interviewing partners can take as little as a week or as long as a month. Likewise, negotiations could take anywhere from 24 hours to a week or more...especially if you need legal review. This means it could take you up to a month to vet and sign a potential partner.
Even then, if your preferred partner is in high-demand, they may not be able to start work immediately. The best freelancers and agencies are often booked out for a few weeks—sometimes months.
And while it is possible to quickly hire someone off of a freelancing site, it’s important to weigh the pros/cons of doing so. Is getting to market one month early worth the repercussions of a hastily built and poorly functioning product? Keep in mind you’ll pay for bad software twice: once to build it and again to fix it!
Aside from determining who you partner with, your timeline can directly impact how much you pay. Many agencies and freelancers charge a premium for rush jobs. If you have the budget for this, it's a great option. But if you’re more cash-strapped, consider ways to flex your timeline.
Can you build an app for free?
The short answer to this is: yes, you can build some types of apps for free.
You can definitely build a prototype for free using no-code tools and creative solutions. We’ve covered how to do that extensively in other posts on the blog.
It’s also possible to build some apps without code. Bubble, an excellent no-code tool, showcases several apps individuals and companies have built using the platform.
Keep in mind, though, that many of these Bubble-built tools may have involved a designer or developer in some capacity.
Makerpad, a membership site that provides no-code education, also showcases several entrepreneurs who have built processes and businesses—usually by stringing together 3+ no-code tools.
The individuals and businesses in these showcases prove it’s possible to build some apps using no-code tools. And while no-code is rapidly becoming a strong solution for many founders (something we’re very excited about!), current platforms can’t handle every type of app. If you need to create a robust native app, manage complex calculations, oversee a large amount of data, or prioritize speed and scalability, a developer is still your best bet.
What could you get for $1,500 vs. $15,000 vs. $150,000?
Most apps we build for clients cost between $75,000 and $100,000 for the first version. For comparison, here’s what you can get for three other price points.
What can you get for $1,500?
- A custom no-code prototype from a freelancer
- A self-driven development course to learn code
- One roundtrip flight to New Zealand OR a badass drone
What can you get for $15,000?
- A simple app from an offshore team
- A simple app from a freelancer
- Entry into code school to learn code
- Used 2014 Subaru Forester
What can you get for $150,000?
- From Krit: a Roadmapping Session, custom native app, and 6 months to 1+ years of maintenance for your launched app
- Dalmore 64 Trinitas whisky
- Two Tri Motor AWD Tesla Cybertrucks
Our final two cents
Software development is expensive, and it’s tempting to accept the cheapest proposal when your options are all pitching a similar result. However, the “you get what you pay for” mantra applies to software development just as much as other areas of life. And when you work with Krit, you don’t just receive an app—you receive a technical partner, dedicated product manager, experienced designer, and ongoing support.
The counsel we share with founders is this: If you want a high-quality result, be prepared to pay a proportionate price for it. That doesn’t mean you should overpay for a project, but it does mean you should be prepared to spend a fair market rate. If you don't have enough budget just yet, you’re better off narrowing your scope than hiring lower quality developers. As we mentioned above, you'll pay twice for bad software: once to build it and again to fix it!
Not sure where to start? We'll help you figure it out...for free
“Krit brought my vision to life, and in the end I not only consider the Krit team to be colleagues, I consider them to be my trusted friends.”
Lauren Sturdivant
Founder at Case Status
If you have a prototype but aren’t sure where to go next, our CEO Andrew can help. He’ll help you think through questions like:
- Does outsourcing make sense for my product?
- How much would it cost and how long would it take?
- What do I even say to a developer?
- What tech should I be using?
Think of it as a free mini-strategy session that outlines how to go from “here’s what I’m working on” to “you can download the app here.”
