How Much Does My Digital Product Cost?

When you start looking for someone to build your digital product, you get stuck on one question: how much will your project cost? The real answer is that nobody knows yet. A salesperson will give you a ballpark fast, but you cannot pin down the true cost of building a product while it is still being defined.

So how do technology agencies set their fees and structure project timelines? It comes down to three things you need to understand.

To get a realistic estimate, you need to understand three things:

1. The variables that go into a project's estimate.
2. How estimates are actually produced.
3. How to get the most accurate estimate from any agency.

Teo tells the story of a client, Jack, who wanted to build a conference platform and reached out to Neo Vision for a price. We set up a discovery call so Jack could explain his idea. Jack is not a technical person, so his first explanation missed a few key elements. The brief was incomplete, so the team showed him how to structure it properly, the way it needs to be for him to communicate the idea clearly to his future developers, and suggested he take some time to write that brief himself.

The point of a brief is for you, the business owner, to communicate an initial sketch of the flow, interfaces, and features of your project to the development team. You do not need technical language, but be as concise as possible to avoid misunderstandings.

Keep in mind that the first brief covers the build, meaning design and development. That is separate from the second brief, which covers launching the product. Launch brings its own costs for marketing, production, and the like.

After receiving Jack's first brief, the team turned it into a formal document with a cost and timeline rundown and sent it back for validation. Jack agreed, but chose to start with an MVP, because fully building the idea would use resources he was not ready to commit yet. The team trimmed the non-essential features, kept the core, and delivered the MVP.

Then comes the second brief, which usually takes more than one iteration. This is where Jack can add or drop features, especially the ones that surface only after the first brief. Again, the team produces a formal document with the new elements. Because the estimate is based on time and cost, Jack was reminded of the extra costs he might carry for marketing, production, and third-party integrations.

An estimate has two major components: design and development. The design estimate covers the look and feel of the product. The development estimate covers the features themselves.

If you remember one thing, remember this.

When you are hunting for a fair price, these are the things that move it:

• The initial brief.
• The list of interfaces and how complex each one is.
• The number and complexity of the features.
• The ongoing costs that any live product carries.
• How likely your product is to change.

Technology agencies lean on past work and research to gauge how long your product will take to build. They break each activity the product needs into tasks and estimate each task on its own. They also know roughly how long generic activities take. Testing and QA, for example, usually run between 25 and 50 percent of total development time.

Two habits make a real difference:

• Put as much detail as you can into the initial brief.
• Ask as many questions as you need to, without hesitation.

And if you already trust your agency, talk openly about the expected budget and deadlines. It makes the job easier for everyone.

All of this is why a fully accurate estimate at the very start of a project is not realistic. The best you can do is remove or answer as many open questions as possible. Once you do, the process gets clearer, and you will see why squeezing an exact number out of an initial brief only leads to disappointment.

Want our input on a digital project of yours? Book a free strategy call with Teo, Neo Vision's COO. For more, read how to prepare for the call and why deadlines slip. Ready to scope your project? Book a call with Neo Vision.