Have an idea for a web application? Want to invest in a real online venture? Something custom built to actually take on players in the market?
To build something substantial realistically costs thousands every month in development fees.
Let’s break down a professional development team, such as ours.
To develop a business application to the high standards that we have to for our clients, we have the following staff in house:
A Systems Architect, Project Manager, Programmers, Designers and an accounts person to manage the billing.
Of course they all aren’t fulltime on 1 project.
I’ll break down the % of time spent on an average 4 month project by each team member.
1 Systems Architect: 20%
1 Project Manager: 20%
1 Programmer: 100%
1 Designer: 50%
1 Account person: 10%
Our apps are all web based apps, hosted either internally or externally (intranet / internet), so there’s a high level of input from a designer who handles the interface design and xhtml etc.
This should be typical for any midsized development house. Let’s take US rates for staff and break down what a project would cost, and also look at the % per project.
Systems Architect: $100k – 20% = $20k a year, about $7k in wages for 1, 4 month project
Project Manager: $80K – 20% = $16k a year, about $5k in wages for 1, 4 month project
Programmer: $60k – 100% = $100k a year, about $20k in wages for 1, 4 month project
Designer: $50k – 50% = $25k a year, about $8k in wages for 1, 4 month project
Accounts: $45k – 10% = $4.5k a year, about $1.5k in wages for 1, 4 month project
So in total, in wages alone, for 1, 4 month project the cost for a company to develop an application is at least $40,000!
Plus, if this company is a contracted company, than they need to add profit and cover other costs, looking about $100k plus.
If you were to shop the project around and found a lone ranger, a 1 man show that can do it all, to cover his own wages for 4 months is still around $20k, and you would realistically expect less development done in that time since their time will be spent on other things, management, architecture, design, client updates, billing etc. I’d expect 3 days of a 6 day week of actual programming.
So how can I possibly justify my topic of a whole development team for $40 a week? Where is this crazy and bullshit deal?
Well there isn’t one. Not yet. Not that I know of anyway.
I can however divulge that I’m considering it…
I’m a systems architect and project manager for our current projects. We also have another project manager on staff, a designer, some ruby on rails programmers and some other general staff for accounts, and support.
There’s a bunch of projects that I want to build and I’m willing to open my team of developers to outsiders in exchange for their expertise, industry contacts and their own network of resources.
On top of that a requirement would be to share the development costs.
I can afford to reduce development costs to as low at $40 per week, on the proviso that there are 10 people investing in the application development.
So my thinking is that I’d invest in at least 3 shares minimum, and put the other 7 shares up for anyone to buy into at that $40 per week.
Why?
Well, I can afford to develop my own projects, and we do. But that’s what we do, we develop applications, we don’t necessarily have all the greatest industry contacts, networks of websites with thousands of users every day or things like that.
We can build businesses but we don’t have the time to market them, I’ve done marketing before professionally and I understand the resource requirement and time that’s really needed to make a web business work, and that’s not time well spent for a team like ours.
So I’m willing to open my team up to outsiders to own a portion of a business and in exchange for our super low development costs / super cheap investment, I’d only be accepting people who can offer what we don’t have, that marketing and promotion side of things.
Honestly the money for development isn’t an issue, but it covers my team costs and re-assures me that the people involved are dedicated to the cause; they have a financially invested interest in what’s going on, I would want to be partnering with people who have the resources and traffic to promote whatever it is we build successfully.
At the end of the day it’s about making the development successful, I wouldn’t be profiting from the development, so it’s in my best interest to partner with worthwhile people so me, just like you can profit from the business itself.
As for what we would be building, well I’m undecided. I have a lot of ideas, but who says it has to be one of my ideas? If someone comes along and has a good idea and is keen for what I’m proposing, then we might run with that and see if we can round up some other people to invest in it.
Anyway, just been a thought of mine, thought I’d blog about it.
Client work pays the bills and more, but I’m not into doing client work forever, we’re building our own apps and I’m defiantly interested in expanding that scope.
I’d be interested to hear some feedback on what people think about it all.
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