In brief
Building an app like WhatsApp or Uber requires months of work and a substantial budget. This 2018 article explains how complexity and hidden development tasks affect costs, and suggests MVPs, thorough preparation and BaaS tools to reduce the investment while testing a core idea that addresses users’ pain points.
Every day, we receive pricing enquiries from prospective clients, including requests for quotes to have us handle their app development. Alongside questions about how much it costs to build an app like WhatsApp or Uber, we often receive enquiries about developing apps like Airbnb, Facebook or other well-known brands. The underlying question is: “Can I replicate a successful model? How much would it cost?”
We will set aside the question of whether copying a successful model is a viable way to start a business. Today, we will explore how much it would cost to replicate Whatsapp, Uber or even Airbnb and Facebook.
App development projects are generally priced in man-days. Put simply, the daily cost of assigning an engineering team to develop your project is multiplied by the estimated number of days needed to complete it, producing the total quote. Since most developers have a standard man-day rate, the variable is the estimated timeline. In other words, a project’s quote depends largely on how long it will take.
You can probably see the connection immediately: the larger and more complex a project, the longer development takes and the higher the cost. Complexity mainly depends on two factors: first, how complex the design concept and features are; and second, how many features are required. Now, let us return to our original question: how much does it cost to develop WhatsApp / Uber?
How hard could it be to build software like WhatsApp?
With more than 1.3 billion active users worldwide at the time of writing, WhatsApp is a pioneer of messaging software, using an internet connection to let users send messages simply and reliably without incurring SMS charges. Some younger people may never have experienced the days before messaging apps. Back then, people used SMS to exchange messages, and sending messages between different mobile operators could incur substantial charges.
WhatsApp freed users around the world from mobile operators’ restrictions, allowing them to send messages freely at no charge. It does not seem to have that many features, and they all look fairly familiar, right? Looking purely at functionality, developing “send messages” takes roughly 7–10 days, “group conversations” around 10–15 days, and push notifications about 4–5 days. Add the other features, and it seems everything could be finished in a month or two. Would a budget of roughly HK$200,000–300,000, or less than NT$1 million, cover it?
In reality, much of the development time goes into work that is not immediately visible:
Expanding support from a single device to multiple devices multiplies development time
Fixing bugs
Tuning voice / video call performance
Creating a more refined user experience
Building a more stable backend
WhatsApp also uses seamless end-to-end message encryption to protect personal privacy, preventing hackers, governments and even WhatsApp itself from monitoring message content.
You might assume that message encryption is simply a standard feature of messaging software. Surely it cannot be that difficult? But do you know how long Whatsapp took to go from initial research to full implementation? Three years—and it did not do it alone, but worked with the encryption software startup Signal. A conservative estimate of four months to develop the first version would double the initial budget estimate of under NT$1 million, before including ongoing updates. We will examine development time and costs in more detail below.
Building Uber is also more complicated than it seems
If WhatsApp is estimated to take four months and a budget of nearly NT$2 million, what about Uber, the sharing economy legend?
Uber disrupted transportation with the sharing economy concept and enjoyed enormous attention, inspiring many entrepreneurs to dream of becoming “the Uber of the XX industry”. First, however, remember that Uber succeeded because of the fast, accurate matching service it provides to users, rather than simply because it is a cool app.
Fares and payment collection
Features such as “registration, login and account management” take roughly 5 days to develop, “payment methods” take 8 days, and “accepting or cancelling bookings” take around 5 days. These are only the basics, however. Uber’s app design is highly complex: the key is using big data to calculate pickup / ride solutions that work best for drivers and passengers. Real-time dynamic pricing alone takes more than 10 days to develop, before incorporating factors such as historical data and user preferences.
An initial estimate suggests that, with six months of development, replicating an early version of Uber would cost close to HK$1 million, or approximately NT$4 million.
Even a simple app starts at NT$1.2 million; it is best to allow at least six months
Goodfirms, an overseas app development company, conducted a related survey. Its findings estimated that a highly complex app would cost US$70,000–100,000, or approximately NT$2.2–3 million; an app of moderate complexity would cost US$61,000–69,000, or approximately NT$1.9–2.1 million; and a simple app would cost US$40,000–60,000, or approximately NT$1.2–1.9 million.
For Uber, the estimated development time was 5.61 months, with an average cost of US$91,218, or approximately NT$2.8 million. For Whatsapp, the estimated development time was 4.66 months, with an average cost of US$64,333.3, or approximately NT$2 million.
How long does it take to develop an iOS / Android app?
The discussion above mainly covers the technical work of developing features. In practice, an app’s development cycle also includes early research and planning, followed by quality assurance (QA) testing to check that it works properly, all of which takes time. Of course, not every app is as complex as Uber or WhatsApp. How long does a typical app take to develop?
Another overseas company, Kinvey, interviewed 100 app developers. Its combined survey findings showed that developing an iOS / Android app with its main features and both frontend and backend components takes an average of 18 weeks, or approximately 4.5 months. Actual development time still depends on each app’s feature requirements.
Taken together, the two surveys suggest that developing an iOS / Android app takes at least several months. Assuming a man-day rate of NT$20,000, a four-month development cycle would cost more than NT$2 million.
“I want to be as successful as WhatsApp and Uber, but what if I do not have that much budget?”
Since development costs are closely tied to development time, are there ways to shorten the development cycle and reduce costs?
Many essential parts of development cannot be compromised. For example, even highly experienced engineers need a certain amount of time to build an app’s underlying architecture. Skipping QA to save time can also backfire: bugs may go undetected early on, and a rushed release can ultimately damage the user experience.
Of course, that does not mean app development is completely inflexible. If you want to shorten development time and reduce startup costs, consider the following:
Consider a minimum viable product (MVP)
Most entrepreneurs are probably familiar with the concept of a minimum viable product (MVP). As the name suggests, it involves creating an initial version of a product at minimal cost and quickly releasing it to the market to test its viability. The central idea is not to build the cheapest possible product, but to complete it with relatively little time and money so that you can quickly validate your idea in the market.
Many entrepreneurs hope to replicate WhatsApp, Uber or another famous brand perfectly. In pursuing perfection, it is easy to keep questioning whether your product is good enough while overlooking a crucial issue: how closely do you want to replicate it? Does your app really need to cover everything and include every feature to achieve your goal?
The MVP approach asks you to set aside that mindset. Instead of spending enormous amounts of time and money on your idea of a “perfect” product, it advocates building, at minimal cost, a product that communicates your core design concept to the market. Market feedback then helps validate whether your idea will be accepted and whether it can generate a profit. Once you receive user feedback—or even attract investors and new funding—you can gradually refine and optimise the product until it becomes more mature. This approach greatly reduces investment risk and helps avoid spending heavily on a product that attracts no interest.
For one client, we used the MVP approach to develop and release three versions for market testing within three months. We then collected user feedback data to improve the product. It ultimately passed the market test, and the client secured venture capital investment. Remember that while you are planning a lengthy development process, someone else may already have launched a similar concept. To some extent, entrepreneurship is a race against time.
Prepare thoroughly and define your requirements to save time and money for both parties
Excellent UI / UX (user interface / user experience) is as important as flawless code. Together, they determine an app’s success or failure. Before development begins, developers generally conduct industry research, explore the client’s ideas in depth and design interface flows, among other preparations. Entrepreneurs should prepare thoroughly before working with a developer, clearly defining their expectations and required features. If you want additional user interviews, decide beforehand what you want to learn: users’ preferences and needs, their usage habits, or their views on competing products?
The more thoroughly you prepare, the more effectively you can avoid repeated revisions that extend development time or incur additional costs.
App development does not have to start from scratch: BaaS tools can save 50% of development costs
Small startup teams may have limited human resources, or lack engineers skilled in both frontend and backend development. But you do not have to build every component from scratch. BaaS, for example, is a commonly used tool for accelerating app development.
Without help from a backend engineer, it can let frontend engineers quickly set up a backend and select common backend features, such as chat, a CMS, social media account login and cloud databases. This allows them to focus on the frontend user experience. For a design in which frontend and backend work each account for 50%, removing backend development cuts development time in half, saving 50% of development costs.
Great inventions succeed because they address everyday pain points
The success of WhatsApp / Uber has encouraged many people interested in starting an app business to give it a try. However, not everyone has ample time and funding to develop a product. Consider using the MVP approach, preparing thoroughly and making good use of tools to shorten development cycles and reduce costs.
WhatsApp / Uber achieved unprecedented success because their design concepts effectively addressed pain points in many people’s daily lives, rather than because they had more money and development time than other entrepreneurs. This shows that the most important factor in entrepreneurial success remains the core idea you want to communicate through your product.
Original article URL: https://goo.gl/Y5bkrG