Start-ups warned over overseas app developers


Australian businesses are increasingly using cheap overseas firms to help them join the app rush, only to end up with a botched job, a local app developer has claimed.


Josh Guest, managing director of Melbourne-based app developer b2cloud, says the rise of the digital era means demand for mobile apps is growing.


At b2cloud’s inception in 2009, there were 60,000 apps available globally. That number has skyrocketed by more than 1000% in three-and-a-half years.


“Every day we speak with clients about the challenges their industries face. Retail is under serious threat and manufacturing is no longer an industry in Australia,” Guest says.


“Developing an app is the easiest and most effective way for businesses to connect with their customers.”


With the world’s second-highest rate of smartphone penetration, there is huge demand for applications to be developed in Australia.


However, a serious skills shortage in this area means many businesses are turning to overseas suppliers, lured by the promise of cheap labour and fast turnaround times.


Unfortunately, a growing number of businesses are being duped, forking out money for apps that fail to meet their expectations.


“Over the past few months, we have been inundated with enquiries following a series of reports that suggest an app can be developed for under $5,000 and make you millions,” Guest says.


According to Guest, b2cloud has been approached by hundreds of businesses who ventured offshore to get their app developed, and now need help to fix the botched job.


“We have no choice but to say, ‘I’m sorry, there is nothing we can do to save this, you have wasted your money’,” he says.


Guest says good apps are expensive to develop because of the team involved in the process. In addition to a developer, there will usually be a designer, a user experience expert and testers.


“You’re building a piece of software that people interact with on a small screen so you have to nail it or they have a poor experience,” he told The Australian Financial Review.


“An app must be easy to use and intuitive. If you go out and build a poor app, customers will resent you and business can be lost quickly.”


Although the price of an app can vary wildly depending on what it does, Guest said it usually costs at least $30,000 to deliver something useful.


He also said business owners can no longer afford to ignore Android because about half of their customers own one of these devices.


Michael Salmon, co-founder of Sydney-based dating website AussieMen, told StartupSmart earlier this month businesses should create a web-based app.


“The main benefits that are driving companies to web-based apps are the ease and cost,” he said.


“You have one technology and one platform, whereas if you made an app for Apple, Microsoft, Android and BlackBerry – that’s four different programs right there.”


“With a web-based app, you make it once and put a wrap on it so that it can go into the relevant app store, which takes about 30 minutes.”