We get to talk to our fair share of founders venturing into the world of startups for the first time.
One of the first things these entrepreneurs want to know when they contact us is how much it will cost to develop their startup. If you’ve never been involved in an application development project before, the bad news is that it is probably going to cost more than you think. The good news is that there are ways to save money and methodologies you can use to limit your initial investment.
The size of the application, the quality of the design, the number of features and the complexity of the features all impact on what you’ll pay for these activities. If you want a native mobile app (iOS & Android) the cost is often higher than that of a web application.
You get the picture … this is not a cheap exercise. However, there is some consideration for scale here and a portion of the money would go to a creating a product that can handle a large amount of users. If you’re starting out you won’t need this level of scale. Just know that if your product is successful you’ll need to scale and that will cost money (that’s a good problem to have though as it means you’re finding product-market fit and are probably making money).
To give a different view on costs to The Next Web’s findings, there is a US-based startup that is a 2-sided marketplace between non-technical founders and development teams where founders can hire design & development teams to build their startup. Here are some costs from the pricing page of their website indicating what you will pay for your application to be designed and developed (the costs below have been converted to AU Dollars and include design, development and project management):
From our experience developing startups in Australia, the figures above are just about spot on for version 1 of the product. That’s a lot of money if you are bootstrapping (paying for the build on your own) and it is a big gamble if you don’t have any validation for your idea.
Fortunately, there is a more affordable option.
Take Airbnb for example. Today they are a multi billion dollar business and are on track to book more room nights than the largest hotel chains in the world. But even they didn’t start with a fully functional application.
To help pay rent the founders decided to try and sell accommodation within their own apartment, while they were there. Crazy right? In 2007 the ’sharing economy’ wasn’t even a thing. They knew there was a large conference coming to town and so they wanted to offer an affordable accommodation option for people who were too late to book into surrounding hotels.
They spun up a basic website and put images of the apartment up. They made 3 sales, and most importantly they got some face time with their first customers. The rest as they say is history … with a lot of hard work along the way.
The first version of your startup doesn’t have to cost $50,000. You could spend less than $10,000 and validate your idea before you invest heavily. There are many ways to do this, all of which depend on your business model and what you are trying to validate.
Spend wisely. Focus. Get to market … quickly. Learn, always.
Launch Lab is a startup web development company in Sydney and Canberra. We work with startup founders from concept to launch and assist with development and product strategy, web development and growth strategy.
We're an experienced team of local startup designers and developers in Australia