Home – New Forums Tech talk App Development Tips – Offshore or Onshore?

  • This topic has 23 replies, 17 voices, and was last updated 6 months ago by Flyingbandit.
Viewing 15 posts - 1 through 15 (of 25 total)
  • Author
    Posts
  • #995138
    Flyingbandit
    Participant
    • Total posts: 15
    Up
    0
    ::

    Does anyone have experience with getting an app developed?
    In my experience, local Aussie developers are almost 10 times pricier than offshore. The problem with offshore development though is that they’re in a different jurisdiction so even if things go sour, it’s hard to resolve it by legal means.
    Also, how do you convince the developer to give it all they got? Do you give them a percentage of the shares in your business? Make a promise of ongoing contracts if they do a good job? Pay for their services in installments only if they do a satisfactory job as opposed to paying upfront?

    Your help would be greatly appreciated thanks! It’s tough as a start up with limited funds and business experience.

    #1200235
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
    Up
    0
    ::

    It is an absolute minefield and there are tons of horror stories of thousands spent, no deliverables, cost over-runs, time over-runs etc.

    Perhaps try to work out a list of due diligence questions eg, examples of completed projects followed by speaking to the owners about the process, communication,responsiveness, project duration vs what was quoted, budget vs what was quoted etc, etc.

    Another important consideration is to work out the minimum viable features you can have built so that the app works because this will give you an opportunity to test the market while not sinking every dollar you have into the project.As well, you will be able to assess the tech chops of the developer.

    To payment. Just straight fee for service is best. Payment by instalment can work and does offer you some protection. You definitely do not want to be in a position where you have spent your whole budget and end up with nothing to show for it. You can help keep the developer interested and working on your project if payment is partly based on timelines.

    Aussie vs offshore? I would pick Aussie every time due to convenience, communication – this can be critical in App Development because miscommunication can result in the project not being done to your specs. As well, it would generally be easier get talk to local customers and check the performance of the developer or company you interested in. As well, there is quality,and as you said, legal and other mechanisms etc.

    If you come across any useful info in this process you are embarking on, we would be very appreciative if you dropped in here from time to time to share your journey.

    Good luck.

    #1200236
    Melanie – MJT Law
    Member
    • Total posts: 55
    Up
    0
    ::

    I agree with Paul, I looked into getting a app developed but it turned out to be just too hard. I did recently come across a company based in Ascot who employs coders from overseas who are honest and approachable but it probably isn’t the price point of a true overseas or crowd sourcing site. They are members of my local chamber of commerce and I have met them a number of times.

    If you are interested I am happy to provide their name – just private msg me.

    Good luck, let us know how you go.

    #1200237
    Anthony Michaud
    Member
    • Total posts: 66
    Up
    0
    ::

    This is of similar topic to another recent thread – my thoughts:

    If you can accurately describe the application and layout, you should be able to find a developer who can give you a firm quote for completing the work.

    Things that will impact pricing – changes. If you need something changed, it may have significant impact upon the application, requiring significant change to the back end. Adding a “quick little feature” may add significant hours to the scope of the project – which is why the description process is so important. Not only do you make it easier to convey to the developer, but you also do a form of logic test, where you are testing the function as you document.

    Also – and this is a key item – ensure that you have two mandatory items built into the project. You must own all intellectual property associated with your project, and that complete documentation is produced.

    If you’re getting something generic enough completed, then you can fully describe it without consequence, and tender it out on various development sites, where progress payments are the norm, and there is a review process for ensuring you mitigate risk. If you’re developing the next Pokemon Go application, and need a level of confidentiality, you’re going to have to develop an NDA to go along with your specification documentation.

    #1200238
    bb1
    Participant
    • Total posts: 4,485
    Up
    0
    ::

    It is no different to dealing with any other business, be it gardeners, cleaners, lawyers, etc. You need a clear set of deliverables, specifications, performance criteria, milestones, etc, etc. Due diligence around the business you employ is critical as well.

    Obviously you cant hire an overseas cleaner or gardener (although I do have a Hollywood client), but with this kind of work either is viable, Paul mentions communications, but realistically, unless the developers are sitting in the same office as you, there can be just as many communications issues as one sitting in an office overseas, as soon as you put a telephone between yourself and a developer, distance makes absolutely no difference. Personally I would go local, but that’s just me trying to support local business.

    #1200239
    LukeHally
    Member
    • Total posts: 150
    Up
    0
    ::

    Not knowing your business, have you validated your market before you go through the effort and cost of developing an app?

    So many people spend twenty plus thousand getting apps made to find there isn’t a market for the idea, and plenty of development studios will happily take your cash to make it.

    Another option (depending on what stage the business is at and what the actual app is) is using a tool like PhoneGap to deploy a web app to Android and iOS. This isn’t a long term solution (the apps won’t be as efficient as native apps), but it can help you get to a wide audience quickly at a much lower cost.

    #1200240
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
    Up
    1
    ::

    +100 for what [USER=68089]@LukeHally[/USER] above says.

    This could be the best resource for under $50 you will ever find – it is a book that has a how to validate structure that is easy to follow.

    http://momtestbook.com/

    #1200241
    JohnTranter
    Member
    • Total posts: 842
    Up
    0
    ::
    Flyingbandit, post: 237075, member: 57515 wrote:
    Do you give them a percentage of the shares in your business? Make a promise of ongoing contracts if they do a good job? Pay for their services in installments only if they do a satisfactory job as opposed to paying upfront?

    Just a tip, if someone offers to pay me with shares then I instantly think they have no actual money to pay, and I will lose interest. I can barely go a month without someone offering me equity in return for work.

    The best method is milestones with deliverables.
    e.g.
    Milestone 1
    Functionality : User can create/edit an account and login. Able to upload photos.
    Payment : 10% of full project amount

    #1200242
    LukeHally
    Member
    • Total posts: 150
    Up
    0
    ::

    To add to [USER=20554]@JohnTranter[/USER]’s comments from the founder’s side. If you do find someone who will accept equity as payment, remember you are bringing on a business partner, not just a gun for hire. A book I found really useful was Slicing Pie.

    I also wrote a blog on this last year that you may find useful: Startup Equity: Non technical founders

    #1200243
    Flyingbandit
    Participant
    • Total posts: 15
    Up
    0
    ::

    Thanks everyone for your responses. I’ll share my tips as I go along, as requested by Paul.
    One can develop a native or web app. If one is tight for money like I am, if you’re targeting the Australian market, I would suggest going for an Android native app. This enables you to use features specific for the android device (e.g. accelerometer). The reason I say Android is because Android has more than 50% of the market share in Australia.
    However, if you don’t need to use device-specific features, then a web app may be more practical.

    Sources:
    http://ausdroid.net/2016/01/28/android-market-share-in-australia-now-back-above-50/
    http://www.smh.com.au/digital-life/mobiles/apples-iphone-loses-top-spot-to-android-in-australia-20150907-gjhc4l.html

    #1200244
    Rohan@TD
    Member
    • Total posts: 164
    Up
    0
    ::

    Having recently supported a client through this process (among other things) here are some quick thoughts:

    • [USER=68089]@LukeHally[/USER] is 100% right. You need to do your market research. You’re developing a business, not just an app.
    • Equity vs. cash payment. There’s a wide range of different considerations when approaching this question. Upfront, having somebody inside the tent (with equity) increases their commitment and ultimately reduces the cost of the apps development. But with that saving, comes the cost of introducing a partner into your business. If you head down the equity route, establishing the right conditions to your equity agreement is critical – Vested/Equity cliff/Silent or active partner etc.
    • Use milestones. Our service agreement come with specific milestones and the costs associated with reaching them (along with other terms and conditions). Don’t hand over a pile of cash without very clear and binding terms of what they will deliver. If you’re paying upfront, consider only paying to the next milestone.
    • Onshore/offshore. Australian developers aren’t necessarily 10 times, or at all, better than those offshore. Mel is right, some charge you Australian prices and offshore the work. Seek rock solid examples of their work to confirm their capability and to justify their prices. As [USER=78928]@Paul – FS Concierge[/USER] points out, communication is much easier with somebody Australian based. It’s also easier if something goes wrong.
    • Deeply consider your revenue model. How are you going to make money from your target market. It sounds simple, but it’s often overlooked by some developers.

    Good luck

    #1200245
    Flyingbandit
    Participant
    • Total posts: 15
    Up
    0
    ::

    Also, from a taxation point of view, if we go with an offshore developer:
    – We won’t be able to claim GST (because there is no GST)
    – We can still claim it as a business expense.
    Correct?

    #1200246
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
    Up
    0
    ::
    Flyingbandit, post: 237221, member: 57515 wrote:
    Also, from a taxation point of view, if we go with an offshore developer:
    – We won’t be able to claim GST (because there is no GST)
    – We can still claim it as a business expense.
    Correct?
    You will still be able to claim overseas development costs you incur so long as your business has income to claim against.
    #1200247
    DaveHecker
    Member
    • Total posts: 3
    Up
    0
    ::

    There is a lot of great advice on this thread.

    The offshore development world was aptly described as a ‘minefield’ – it’s risky and the failure rate is high. And so, it’s easy to say ‘always stay domestic’ – that is true. A local development team, all other things being equal, is always going to be best.

    But the reality is that developers are scarce, especially in Australia. I am the Co-Founder of a firm that places clients with overseas developers and we’ve seen a huge spike in clients from Australia over the last year. I’m not exactly sure why, as developers are scarce everywhere but it seems that the problem is somehow worse in your part of the world.

    So, when cost and availability make using domestic developers unworkable, consider the following when looking for an offshore team:

    1) Don’t just look for technology experience. It’s not enough to look for ‘3 developers who are great at javascript and have experience in financial apps’. There is so much more than that. Look for a company that fits your culture, your work style, and you are comfortable with.

    2) Don’t be price-blind. Of course, cheaper is better but price can be deceiving on the global market. With no barrier to entry, the bottom end is exploding with cheap, unseasoned developers who can be more trouble than they are worth and ultimately cost you more than if you’d paid more in the first place. Instead of using currency effects to spend as little as possible, use it to get access to premium developers are a great price.

    3) Don’t try to ‘screen’ and ‘vett’ your way to a perfect partner. It just doesn’t work that way. When you find a team that looks like a fit, break off a chunk of work and offer it to them as a trial. See how it feels to work with them. Remember, smaller projects can be harder than bigger ones (as far as estimation and timeboxing) so don’t worry too much about the details – use the trial to get a feel of their professionalism and communication skills.

    4) Get on skype and talk with everyone. There is no better way to get a feeling for the communication skills, which are critical!

    By the way I’m also working on finding out why demand has jumped so much in Australia, so if anyone has any ideas about that please get in touch! Good luck!

    #1200248
    DaveHecker
    Member
    • Total posts: 3
    Up
    0
    ::

    Just out of curiosity, was the project handled as a fixed-bid engagement? Or was it time and materials?

Viewing 15 posts - 1 through 15 (of 25 total)
  • You must be logged in to reply to this topic.