Get Paid For Your Apps and Keep Them Going

Nice example of a project’s cost. The numbers help put this discussion in a proper perspective.

Nice example of a project’s cost. The numbers help put this discussion in a proper perspective.

When you’re building an app “in house” though, your cost isn’t $150/hour. You might charge clients that, but costs are significantly less when you can do things yourself.

So it looks like 2 solid weeks of hustlin’ and about 3K for a designer and you got yourself a product

I’d be more interested in seeing numbers with regards to marketing the apps.

When you’re building an app “in house” though, your cost isn’t $150/hour. You might charge clients that, but costs are significantly less when you can do things yourself.

So it looks like 2 solid weeks of hustlin’ and about 3K for a designer and you got yourself a product

I’d be more interested in seeing numbers with regards to marketing the apps.

@marc: there is opportunity cost though, especially for a dev shop building their own products. If we’re building an internal app we’re not billing clients. So essentially your investment is the difference between what you’d pay an internal developer and what you *could* be billing a client.

@marc: there is opportunity cost though, especially for a dev shop building their own products. If we’re building an internal app we’re not billing clients. So essentially your investment is the difference between what you’d pay an internal developer and what you *could* be billing a client.

That’s not necessarily true Marc. The time they spent on this app took that time away from a paying customer who could have paid that same amount. The same goes even when you work on non-work related items like mowing the lawn, repairing you car, etc. I pay someone to mow my lawn because they are far less expensive than if I lost $100/hr, 2 hours a week doing it. There’s no guarantee that ADS could have spent 244 hours working for another client, but odds are good that at least some of that time could have been billed. You don’t know, so all you can do is determine the value of your time, and count that for both internal and external work.

That’s not necessarily true Marc. The time they spent on this app took that time away from a paying customer who could have paid that same amount. The same goes even when you work on non-work related items like mowing the lawn, repairing you car, etc. I pay someone to mow my lawn because they are far less expensive than if I lost $100/hr, 2 hours a week doing it. There’s no guarantee that ADS could have spent 244 hours working for another client, but odds are good that at least some of that time could have been billed. You don’t know, so all you can do is determine the value of your time, and count that for both internal and external work.

@robert: you are assuming that your firm is 100% booked up all the time. This might very well be the case, but I’m going to guess that even the busiest of companies have a few days here and there where they are in the process of landing new work etc.

So the reality is that, although you *could* be billing 150/hour while you’re building your own product, you really aren’t losing the money unless you have a client waiting for you.

I’m sticking to my 3K number above!

@robert: you are assuming that your firm is 100% booked up all the time. This might very well be the case, but I’m going to guess that even the busiest of companies have a few days here and there where they are in the process of landing new work etc.

So the reality is that, although you *could* be billing 150/hour while you’re building your own product, you really aren’t losing the money unless you have a client waiting for you.

I’m sticking to my 3K number above!

@Robert The rates seem a bit high for in-house development and the number being (14) 16 hr days seems a bit high too. I mean, did you really work 16 hr days?

Also, did you really pay a designer $150/hr?

@Robert The rates seem a bit high for in-house development and the number being (14) 16 hr days seems a bit high too. I mean, did you really work 16 hr days?

Also, did you really pay a designer $150/hr?

@marc: sticking to your guns is good. I’ll do the same.

@rob: we didn’t pay a designer $150/hr. (I mentioned I was using that as a average number), however I did work 16 hours days for a straight two weeks to get expens’d launched.

@marc: sticking to your guns is good. I’ll do the same.

@rob: we didn’t pay a designer $150/hr. (I mentioned I was using that as a average number), however I did work 16 hours days for a straight two weeks to get expens’d launched.

@robert, wow I am impressed. I run out of any useful development time putting in anything above 10hr days.

Actually, commenting on David’s original post this type of commentary isn’t really necessary. If you go with free apps you deserve to fail, pretty simple.

@robert, wow I am impressed. I run out of any useful development time putting in anything above 10hr days.

Actually, commenting on David’s original post this type of commentary isn’t really necessary. If you go with free apps you deserve to fail, pretty simple.

@brian: you can’t count time like that, otherwise you’ll start billing your friends for hanging out with them and charging your wife for taking out the trash. At those rates, it also “costs” you $1200 every night you want a full 8 hours sleep. Take it down to 6 hours a night, that’s $300 a day which comes out to $109500 a year!

I’m having fun with the numbers obviously. The point is that as a development firm it’s significantly cheaper to build an application like expense’d than if you are a company without developers. Don’t let the 36K number deter you from building something that might be interesting to you, or something you think you can make money on. Tell your next client that you can start their project in 2 weeks and get cracking on your own stuff!

@brian: you can’t count time like that, otherwise you’ll start billing your friends for hanging out with them and charging your wife for taking out the trash. At those rates, it also “costs” you $1200 every night you want a full 8 hours sleep. Take it down to 6 hours a night, that’s $300 a day which comes out to $109500 a year!

I’m having fun with the numbers obviously. The point is that as a development firm it’s significantly cheaper to build an application like expense’d than if you are a company without developers. Don’t let the 36K number deter you from building something that might be interesting to you, or something you think you can make money on. Tell your next client that you can start their project in 2 weeks and get cracking on your own stuff!

@marc: except that I actually have been sitting at my desk in the AC being paid that amount per hour while the guys are outside mowing. Previous to hiring them, and other’s to do my “yucky” work, I did not have the free time to do extra work on the side to my 40 hour/week full time job. It absolutely can work like that if you work for yourself. I’ve turned down 3 part time jobs in the last two months because I’m still short on time. If you work for someone else as an employee and can’t pick up any extra time, then no this doesn’t work for you.

And yes, when I go out with my wife on Friday, I am choosing that over making money during those hours, which I fully could have. Make me an even more impressive husband.

And per your last statement, if I tell my client I can’t start for two weeks, then I also don’t finish with them for two weeks later, which means the next client can’t start until later, etc, etc. It really does cost you money…unless you are sitting around doing nothing.

Now, just because it costs money doesn’t mean I’m against it. We at Agile Nomads are primarily working on our own projects and actively turning away work, because though its a loss in the short term, I believe it will be a gain in the long term. Just don’t fool yourself into thinking that it isn’t costing money.

@marc: except that I actually have been sitting at my desk in the AC being paid that amount per hour while the guys are outside mowing. Previous to hiring them, and other’s to do my “yucky” work, I did not have the free time to do extra work on the side to my 40 hour/week full time job. It absolutely can work like that if you work for yourself. I’ve turned down 3 part time jobs in the last two months because I’m still short on time. If you work for someone else as an employee and can’t pick up any extra time, then no this doesn’t work for you.

And yes, when I go out with my wife on Friday, I am choosing that over making money during those hours, which I fully could have. Make me an even more impressive husband.

And per your last statement, if I tell my client I can’t start for two weeks, then I also don’t finish with them for two weeks later, which means the next client can’t start until later, etc, etc. It really does cost you money…unless you are sitting around doing nothing.

Now, just because it costs money doesn’t mean I’m against it. We at Agile Nomads are primarily working on our own projects and actively turning away work, because though its a loss in the short term, I believe it will be a gain in the long term. Just don’t fool yourself into thinking that it isn’t costing money.

I think the issue here is ‘alternative’ business models. Charging a customer is one way of making some money, but do you really think Facebook would have the user base it has if they charged for it? That’s not to say Facebook is a worthless application, the revenues they produce demonstrate that it’s far from that, but by ‘not charging’ for it, they open up the userbase and thus make an alternative business model viable – in their case, advertising.

I think the issue here is ‘alternative’ business models. Charging a customer is one way of making some money, but do you really think Facebook would have the user base it has if they charged for it? That’s not to say Facebook is a worthless application, the revenues they produce demonstrate that it’s far from that, but by ‘not charging’ for it, they open up the userbase and thus make an alternative business model viable – in their case, advertising.

very nice post robert. this helps bring everything into perspective.

very nice post robert. this helps bring everything into perspective.

Re: Rob’s 16 hour days getting Expens’d up… It’s true. You should see how long he can go with enough Red Bull. It scares me.

Re: Rob’s 16 hour days getting Expens’d up… It’s true. You should see how long he can go with enough Red Bull. It scares me.