A kidney for an app

5 tips to cut app costs in half.

If you haven’t launched a mobile app before, building your first one can be an intimidating task. There is simply too much to consider and you quickly find yourself coordinating multiple teams doing things you don’t fully grasp. Planning and meeting your budget under these circumstances is a tall order even for the best of managers. Luckily, there are a few tips that can help you dramatically cut costs even if this is your first mobile project.

Tip 01.
Develop for both platforms at once

Long gone are the days when only specialty engineers could build apps for their platforms. Cross-platform development has significantly matured in recent years. Nowadays you can build outstanding apps for both Android and iOS at the same time using much of the same code.

Although there are a few exceptions, most mobile applications can benefit from cross-platform development with frameworks such as React Native. Taking this approach typically cuts the costs of owning an application by 30–40% with little to no downside.

So why do we still have native Android and iOS developers then? Well, some deep optimizations still require native coding. Apps like specialty SDKs or payment processors also benefit from total control the native approach offers. But for the casual application, going native is more often than not a way how software agencies go about pulling more money from your pocket.

Tip 02.
Build the apps and the backend under one roof

A long-known theory states that most software projects slip due to failures in communication. Having two or more teams building parts of the same thing is a fertile ground for miscommunications that can accrue weeks to months of delays. And delays tend to translate directly into costs.

The real riddle here is to find an engineering partner who is equally skilled in mobile and backend development. Start by asking for their references - do they have verifiable experience doing both? If so, go beyond their marketing materials and spend some time actually talking to them. 

Once you have found a good fit, you will know you saved yourself a ton of problems and coordination efforts. You can now treat them as a single vendor which is not only much more manageable but also less costly in the long run.

Tip 03.
Mid-market prices yield the best outcomes

Software development prices are all over the place. It is easy to find a sweatshop that works for as little as $15/hour, while the top-ranking companies offer price tags north of $150/hour. 

The reason for the latter is not because of some outstanding quality that separates these companies from the mid-market players positioned in the $60–$90/hour range. It is simply because their resources are limited and their hype has outgrown their bandwidth. A wise strategy for them, but not so much for you, the pragmatic spender.

Going for the lowest price is even worse simply because real engineering talent has its inherent costs. Risking your project by hiring a person who just passed their introductory programming course a month ago is nothing short of stupid. And trust me; we’re yet to see a $25/hour agency accomplishing anything short of tragic, however good-looking references they fabricated into a presentation for themselves.

Tip 04.
Pay for hours actually worked

Sounds counterintuitive at first, right? But bear with me, there is a good reason why I believe this is the best option for you.

Assuming you already selected a trustworthy and skilled partner, the next step is to lay out your product plans to them. Unfortunately, no matter how good of a job you did on your product specifications, software projects are always full of surprises and external factors. Some of them are difficult to predict even for seasoned professionals and experienced software agencies know that very well. If you insist on a fixed price, they will rightfully offer you one with all sorts of risk buffers included. All your negotiations on fixed price projects will only go so far; the risk for a rational agency is simply too high to even come close to their typical margins.

On the other hand, paying for actual hours is what enables your development partner to set a lower margin on their services. This comes at a price for them as well; you should make it clear in the contract that if you grow dissatisfied with their services, you have the right to terminate your partnership on a 4–8 weeks notice. This creates the proper mix of incentives on both sides while allowing you to stay reasonable on the costs. 

Another trick is to ease into the cooperation by agreeing on a small (1–2 months) work package priced at a fixed cost. Once everything goes well, you continue the relationship on a time and materials basis.

Tip 05.
Fix future costs early

An engineering partnership rarely ends with the product being built. You will be bombarded with new feature requests from your users, new operating system updates will keep coming, and production support will need to be in place.

Ask how such activities translate into costs early. Fix the rates, but do it wisely. If you don’t do it at all, you are risking that the moment a critical incident appears, you will be overcharged. But fix them for 3 years in advance and you will get overcharged as well because there is simply no way for the partner to predict the cost of labour that far ahead (the engineering wages are among the most dynamic of all). We at Panaxeo aim for the sweet spot and typically fix our rates for 12–18 months in advanced.

Bonus tip
Ask for incentive-based discounts

No serious agency will discount their prices just because you sell them on the idea that your app will be a big deal in two years. Wiser incentives include things like economy of scale: the more you order, the cheaper the service should be – simply because you cut the agencies’ slack times. Offer a deposit or a monthly billing period and you’ll strike out a risk item from your partner’s management sheet. And less risk on their end should mean a better price for you.

When negotiating the price, such mutual interests tend to bring the best results for both sides; and after all, having a win-win partnership from the get-go is what we are all aiming for, right?

👋🏻 Best of luck!

PS: In case you are on the lookout for a reputable, quality-oriented, and fairly-priced partner for your next mobile project, we at Panaxeo would be honoured to make it onto your short-list. To schedule a call with us, click this link.

Did you like this article?
Subscribe to our RSS feed!
We publish 2-3 new articles each month.