There are two kinds of aspiring entrepreneurs--there are those who decide whether to execute their idea depending on the cost of development of the product; and then there are those that put the product ahead of everything else.

If you can easily identify with the latter (and I sincerely hope that you are), you're definitely on the right path to entrepreneurship.

For those that must have their ideas executed and are as desperate to build their business as much as they want to breathe, they will always find a way to build their product irrespective of the current resources available to them.

Having said that, it helps to know your costs of building the mobile app right at the beginning so that you can make an informed decision of defining your Version One or your go-to-market strategy.

Pricing can be quite complex when outsourcing the development of your mobile app, thus making it important for you to understand the factors that influence the overall costs of development.

1. Complexity of business logic

How complex is the mobile application that you're looking to build? How complex are the algorithms at the backend to compute and process data for an enhanced experience for your target audience?

Complexities across mobile apps vary and thus the range of costs can also vary based on the business logic you want to implement in the first version or the MVP of your mobile app.

Let's take a video streaming mobile app as an example. You can either build one that simply lets your users watch videos based on genres, or you can build a far complex one that has an algorithm to collect data about your customers' preferences and then make recommendations accordingly.

The latter has a more complex business logic and would definitely be more expensive to build.

2. Backend or native

Does your app require a backend or will it be completely native? Having a backend can significantly increase the costs of development. Simply because it would involve another resource added to the project with a different set of programing skills--those that are web-based.

So how to tell the difference between an app that requires a backend or not? The moment you want a user to signup to use your mobile app, you'd have to create a backend to store all user-related information. That's really the starting point and the amount of effort required to build the backend is dependent on the complexity of the features that require backend access.

Any app with social networking fundamentals where you connect two or more users with each other and share data between them require a fairly complex backend to be build.

There are two types of costs that you will incur in this case--one is the development cost and the other is the cost of hosting your data in the cloud.

3. Content management system

Going one step further to the backend is to build a content management system or CMS. If your mobile app requires frequent update of content that has to be managed by you or the admin, it would require a content management system to be built in addition to the backend.

The CMS enables different stakeholders to add their content from the backend. For example, being able to add/update product information, pricing and product categories on an e-commerce mobile app, control algorithm parameters, etc.

4. Social features

Social features can significantly increase the costs of development of the app. What is important here is to define what type of social features you're looking at building the application and whether all of them are required in the first version or not.

If you're looking at connecting people for sharing of data, there are broadly two ways to do it--a Twitter-type follow or un-follow or a Facebook-type friend request management. Each will require a different amount of effort to build. Going further granular, do you want users to be able to just view the content or share, like or comment on it can also impact the costs.

You may not want to build all of the features on day one and can build in phases through app updates over a period of time.

5. Third-party Integrations

An important component that can reduce or increase the costs is the integration of a third-party service to enable a certain feature in your mobile app.

These are typically B2B services that build an investment-heavy infrastructure to support the features you'd like to build. Their model is typically on a subscription basis and their pricing is dependent on usage.

To illustrate this with an example, some health apps require them to host their data on a HIPAA compliant backend. The costs of building one on your own can be quite expensive and so you'd integrate a third-party compliant cloud service on a subscription basis.

Similarly, there are other services that provide you an infrastructure to build apps with features such as Chatting, Video Streaming, etc.

The tough challenge is to find a developer within your budget. But it's tougher to find one that can understand your business, its goals and objectives and your customers to deliver an experience-rich mobile app. Evaluating a development partner based on the latter, than merely based on budget can go a long way in building a successful mobile-first startup.

Published on: May 5, 2015