How Much Does my Digital Product Cost?
When searching for somebody to develop your digital product, you always get stuck on one key question:
How much does YOUR project cost?
To be honest, nobody knows. Salespeople will quickly give you a ballpark figure, but in reality, you can’t estimate the actual cost of developing a project while still in the developing phase.
Yet, how do tech agencies negotiate their fees, and how do they structure projects’ timelines?
To get a realistic estimation, you must be able to understand the following concepts:
- The many variables involved in a project’s estimate.
- How estimations are done.
- How to get the most accurate estimation from any agency.
In the video, Teo tells the story of a client who wanted to build a conference platform and reached out to Neo Vision, asking for a price. So, they planned a discovery call in which Jack was able to explain his idea. Jack wasn’t a technical person, so his explanation missed a few key elements. It was an unsatisfactory briefing; therefore, the team guided him on how a briefing should be structured for Jack to communicate his idea properly to his soon-to-be developers. We recommended Jack take some time to do this briefing by himself.
The purpose of a briefing is for you, the business owner, to communicate an initial sketch of the flow, interfaces, and features of your project to the development agency. You don’t have to use technical language, but make sure you are as concise as possible to avoid potential misunderstandings.
Remember that the first briefing should cover the developing aspect, meaning design and development, which is entirely different from the second briefing, which includes launching the project. Launching involves additional costs for marketing, production, and so on.
After receiving the first briefing from Jack, the team structured it into a complex formal document, including a rundown of the cost and timeline, and sent it back for validation. Jack agreed but decided to opt in only for an MVP at this stage because fully developing the idea would consume resources that, at the time, he wasn’t willing to allocate to the project. After trimming down the non-essential features and keeping only the essential components for the project’s core, the team delivered the MVP.
Now it was time for the second briefing, which usually happens in more than one iteration. Jack can add or discard features in this step, especially if they slip out during the first briefing. Once again, the team will create a formal document including the newly added elements. The estimation is based on time and cost, so Jack was reminded of the additional costs he might have to cover regarding the marketing, production, and other third-party integrations.
The estimation has two major components: design estimation and development estimation. In the design estimation, you cover the feel and look of the product, while in the development estimation, you specifically address the features.
The key takeaway from this should be that the estimations are 100% based on the briefing. Poor or information-lacking briefing might result in an incorrect design and other faulty features. It’s essential to take some time to build a comprehensive briefing and also to find the right development company to help you with it.
If you are in the same position as Jack once was, here’s a summary of the main things you should be aware of when searching for a fair price:
1. The many variables involved in a project’s estimation:
- The initial briefing;
- The list of interfaces and their complexity;
- The number and complexity of the features;
- Additional costs that any ongoing product incurs;
- And how much is your product prone to change?
2. How estimations are done:
Technology agencies rely on past experiences and research to gauge how much time it would take to build your product. They split each activity required by the product into tasks and estimate each one individually. They should also know how many generic activities should take. A good example is the Q&A part of a project, which usually takes between 25% and 50% of the total development time.
3. How do you get the most accurate estimation from an agency:
- Include as many details in your initial brief;
- Don’t be afraid to ask as many questions as you deem necessary.
(For questions examples, make sure to check out the video)
If you already trust your agency, don’t be afraid to discuss the expected budget and deadlines – it makes the job easier for everyone.
All of those make it impossible to get a 100% realistic estimation at the beginning of your project. The best you can do is eliminate or answer as many questions as possible.
Hopefully, the whole process will become more straightforward, and you now understand why trying to get the exact number out of your initial brief will only lead to disappointment.
Aim for ranges and not exact numbers!
If you want our input on any of your digital projects, feel free to book a free strategy call with Teo, Neo Vision’s COO.
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