If I had a dollar for all the calls, emails, Facebook messages that I received from startups and would-be entrepreneurs saying “I’ve got a fantastic idea for an app — I just need someone to build it”, then I would be the millionaire. Usually, the next thing to come out of the mouth of this naïve soul would be “It won’t take much just….” Insert here anything from a program that creates virtual sparkly unicorns that deliver your text messages to an app that takes a photo and 3D prints a mini Nintendo character with your face on it. Not to quash the dreams of the new crop of would-be startup entrepreneurs, but there is a whole lot more involved in building an app or software than first impressions suggest. Also, more often than not, it is significantly more expensive than it first appears.
Let’s take a look at some of the hottest apps and software of 2020 and try to pop the hood to estimate the build cost of the tech.
Slack
Slack is a business messaging tool that has gained popularity in 2020 as a remote working tool. With video conferencing available within the app, multi-channel messaging and status updates, Slack has become a vital tool for around 12 million users.
The actual messaging side of the Slack app is not a complicated build, with Krit.com estimating the cost of building a similar app at USD $150,000 ( I would be more likely to suggest $250,000 to make sure the bugs were all ironed out). But Slack the company has raised over $1.4 billion in capital over ten successive share rounds. Why might you ask has it cost over a billion dollars to create a piece of software with a build ticket price of under a million? There is a lot more to a successful app than just the code behind it, my friends, and the balance sheet of the Slack Corporation is evidence of that.
Uber Eats
Uber Eats is another app that has been used more this year than ever before. When I was in app development my other favourite saying from potential clients was “It’s just like Uber but for…. {insert penchant here}”. There is no “just” about the Uber brand. The Uber and Uber Eats apps are schlick stick, clever code with an epic marketing department that has led to a true disruption, first in the taxi industry and then in the food delivery market.
The thing I love about the Uber tech (warning *GEEK MOMENT*) is that the whole app is a web app — what that means is that the Uber and Uber Eats apps are just browsers with limited functionality that have a website running inside them. Why is this so clever? Because it means that the techies at Uber can update their “apps” whenever they want to as it is as simple as updating their owned website. No more being held to ransom by the man (aka Apple and Google). But I digress….
One very conservative estimate of the build cost for an app like Uber (or Uber Eats) is around $65,000 USD. But once again, Uber and Uber Eats as a company have had more than $20 billion invested. However, with a current valuation of around $70 billion, I think the Uber investors would be more than happy with their return on investment.
TikTok
Tik Tok is the new kid on the social media block. As for me, I find it a place where time stands still. One moment I’m opening the app, the next my children are wailing that they have not eaten for days — time vortex I tell you! TikTok has increased dramatically in popularity throughout 2020, and the reason is simple; when you have watched everything on Netflix, there is no other option but to resort to user-made content.
Despite the controversies surrounding TikTok, it is undoubtedly a 2020 app success story. The team at Clever Road estimate the build cost of TikTok would be around $125,000 USD. Once again, the conservative in me would bump that up by another 20%. So how much has been invested in TikTok to date? Remembering that this is a very young company and also Chinese owned, so data is a little more scarce, the estimate is at least $7.4 billion. That’s a lot of money to keep me in cat videos.
Sleep Cycle
Another app that has increased dramatically in popularity in 2020 is Sleep Cycle. Sleep Cycle monitors and reports on the quality of your sleep, and its handy alarm feature helps you to wake up at an optimum time in your REM cycle. It’s like magic! You would think with all the extra time we have had on our hands in 2020 that getting optimal sleep wouldn’t be a priority; however, this app has boomed.
When it comes to the trickiness of the technology, this app is the most complex build of all the ones we are looking at today. It includes sensors, multiple algorithms, microphone input, battery saving options, Apple overrides and a whole lot of other “little things” that add up to a very hefty development price tag. Funnily enough, it is hard to find an estimate on the build cost of a similar app, but I would suggest it would be north of $750,000 USD. This Scandanavian company has clandestine funding information; however, its revenue from 2019 (before the 2020 boom mind you) was $11.27 million USD, making Sleep Cycle an app to watch.
The Bottom Line
If 2020 is the year for apps, there are certainly some standouts. All of the apps we have looked at have trended across the globe since at least March this year, so I know I will be watching their 2020 revenues when they come out.
If you have a big idea for the next big thing, then don’t let my jaded view of the world of startups trouble you — people do make it. I have seen it with my own eyes and have been a part of some teams that have had tremendous breakthroughs. The world of apps is fun and exciting and whilst the tech is of course the starting point, no great apps exist by tech alone, it is the marketing department that make or break an app’s success, not the coders.
Want to talk tech with the most experienced team of marketers in Brisbane and the Sunshine Coast? Then that’s what we are here for. Get in touch and pitch us your idea, and we can help put the marketing legs on it to make it happen.
A solid digital marketing strategy might be just the thing you need to get you going.
Originally published at https://leepaton.com.au on September 16, 2020.