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The big boys have the tendency to build their software in house; a few youngster companies share the same dreams. That is not impossible but also very likely to become a big growing budget if not destined for failure (as proven by many). Only few companies have succeeded after many trials and millions of dollars..

A good friend and expert on business mobile Apps, Kevin Benedict estimate a minimum of 250K to have your first App alive in one platform, and that is not counting with integration, support, evolutions and any services licensing.

I disagree with Kevin and I’m more aligned with other annalists research that shows more a cost of $500K to $1MM budgets to the ball rolling. A mobile app is not a trivial effort, even if you have the funds, one must know how to build Apps to succeed. To put things in perspective, you shall consider that out of the thousands of new Apps released every day, only a small percent will succeed and a fraction will remain relevant for longer than a few months.

Building apps it not the same as creating a web based App that users won't have the option to not use, like SAP or any other horrible (meaning ugly user experience) backend system that users have no choice but to use. To create successful apps, developers and producers must win the heart of users with tangible things that shall include elements like: cool, convenience, time saving, simple, fun, etc. If you think you can create a new successful App, think twice and look at the challenge of being better at doing apps than the millions of developer who’s Apps will never be in the top 20 of any category.

Today almost any one can build a website and a web based system. The technology is based on standards and there are millions of skilled professionals. The mobile App business is in its infancy and qualified resources for business Apps is very scarce. There are a ton of developers building Apps. But only a few make serious money, those few are the ones who know how to build Apps successfully.

Any one can build an App. But success is at its best challenging. Take 1000 mobile developers. 100 would have 2 plus years of experience, 10 will have experience in Business grade Apps and 1 will be able to talk about past successful achievements.

Gartner says that “Less Than 0.01 Percent of Consumer Mobile Apps will be considered a financial success by their developers through 2018”. Companies who embark on mobile App development must be aware of the technical challenges of a rapidly evolving ecosystem and face the complications of support for multiple mobile operative systems and form factors. Although the mobile browser is evolving from a thin rendering engine to a sophisticated application delivery platform running complex JavaScript applications. HTML5 will continue to face issues such as performance, fragmentation and immaturity will challenge developers for several years. Ok that was too technical for most of the readers, lets take another angle.

Look at other industries like Airlines and Banks. 70% outsource the function, only the big and really sophisticated ones have success on building Apps, and they have an army of developers working on one App.

The fact that you can rent a van and hire a driver doesn't mean that you should try to do your own deliveries. There is UPS for that and they know their business well. Just think on the metrics your company will have to master to drive mobile Apps adoption.

The only reason that justifies a huge investment in a successful App is that the App will give you a competitive advantage and to create that advantage the company must hire proven mobile App builders, not use the same IT team that maintains web sites.

At Leapfactor we have a team of 50 people that have been consistently creating mobile Apps for 5 years and invested millions of dollars on research and development. Certainly, we believe that we have top talent and we are very proud of what we have created and achieved so far. That is why, I always find intriguing why anyone would think that they can design, build and operate an App with a handful of developers.

Every time I get to talk to a CEO or CIO about this subject the following two questions are asked:

    If I buy an App I'll have no competitive advantage and I'm going to have the same as any other competitor. Don't you use the same BackOffice systems and credit cards prosesing firms of your competitors? Do you really think you have a disruptive idea for App that will justify a big investment? Do you really think you can succeed considering that you and your team know little about the mobile apps business?. Furthermore, if you are convinced that you can create a tangible advantage with Mobile Apps, grab a big budget and go after your big idea with a vengeance, but make sure you hire professionals and that you provide your team with meaningful resources.

    Why not just hire an agency or a team of developers to create an app under your specifications. That appears to be more cost effective. The problem with this thinking is that you don't really know what is the real cost of designing, building and operating mobile Apps. We already established that you can't just hire a boutique to do what you think will be a successful App.

Assuming that you can fund the development of an App for a couple hundred thousand dollars. You must also consider a quarterly evolution to include learning’s and add new features. The rule of thumb is that you will expend the same amount of the initial development cost to do maintenance and handle a moderate evolution of the App. Also, consider the fact that you would need to keep on going with the operative system evolutions and new device form factors. I can go on, but I think by now you should get the picture. If you insist in you becoming a App producer, please write down your budget on a post-it to compare vs. actuals in the future.

July  22, 2015

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