Can You Afford to Outsource? Can You Afford Not To?

Matthew Campbell, June 16th

iStock_000007531699XSmall.jpgA lot of my readers want to know how to program iPhone apps themselves, but a significant minority want someone else to do the work.

Why?

As we all know, programming on the iPhone is super cool and all that. But, if you are running a business AND writing code all day so you can create an app how do you get it all done? What if you don’t even know how to program but you think you have the app idea of a lifetime stuck in your head?

Realistically, writing code for your app is a full time job. So is the marketing of your app, the business planning and so on. All of these things need to get done in order to be successful and your choice is to do it all yourself or you delegate these tasks out to others.

Warning: this blog contains a simplified example intended to make a point!

If you do it all yourself you are a superhero – however, your business is going to take longer to grow. There are only 24 hours in the day and you are probably still working a day job. If it takes one month to design an app, one month to program an app and one month to do the marketing it will take you three months to launch the product by yourself.

If you get help you could theoretically launch the product in one month, but it will require an investment (in cash). However, that is two months were you will now be making revenue and you can start working on the next app. Because, believe me, with the competition out there you will need to make the next app.

How?

Assuming that you do want to outsource, what do you need to do to get it done? Even though you want to outsource your coding you are not off the job. You will need to still design the app and provide specifications to your coder. Carla White discusses this process in her book, Inside Secrets to an iPhone App, that I reviewed last month.

Here is a list of things you can expect to do

Discussion

I have seen others make this work – so I believe that it is possible to effectively outsource the creation of your app. The relatively high cost of having an app written is an issue. Actually $5,000 is very low price to produce a piece of software.

However, with the competition on the app store you cannot assume that your app will sell a million copies. A more conservative estimate would be that your iPhone app will bring in an average of $6,600 in revenue over the year. That is a $1,600 margin.

Of course, if your primary business model does not depend on simply selling apps at face value then $5,000 could be a bargain.

A Major Caveat

One thing that you should know is that if you go this route you will need to find a way to publish regular updates. Updating your app on a regular basis is essential to continuing to get sales – either you can do this yourself or again you can outsource this task.

In summary then, it seems to be that outsourcing your coding can be a viable option but it does not represent an easy out. Obviously, my analysis depends on very conservative assumptions on app earnings. If you think your app will be a best seller and are willing to take the risk it changes the equation a bit. Also, if you are planning a high priced niche app outsourcing could pay.

Have you tried outsourcing? Would you consider it? Why or why not?