Product Team Costs
How much should it cost to create an app/website or capability?
Getting asked this all the time, I thought I would share my rough formula to start a conversation.
Resources: Contractor: $150/hour or FTE: $150k/year (includes 20% for benefits)
Typical Product Team makeup:
- Product Owner (1)
- CX/UX (1)
- Front End Dev & Design (1)
- Mobile IOS Dev (1)
- Mobile Andriod Dev (1)
- Fullstack Backend Dev (2)
Product teams should not be more than 12 people
The team above:
- fully contracted (7 * 150/hr * 2000/hr/yr) $2.1M/yr burn
- full FTE (7 *150/yr) $1.05M/yr
Tooling cost: You will have a rough $7k/yr tool cost per/user, $49k/yr
A scrappy MVP should be able to be created by the above team in one quarter (3 months) with a V1 deployment done in the following two quarters.
If you need a scaled enterprise app for a large company, you might need 2-6 product teams working in tandem. ( a mobile product team, a web product team and an API enterprise bus product team could create an ecommerce site)
Of course, there is a lot more involved in costing. The dev prices will vary wildly. One can drive out costs by nearshoring, offshoring, using flexible IaaS/PaaS, and open source. There are tons of creative funding models and tools like research tax credits that can be leveraged.
Actual Linkedin post: http://bit.ly/2Ij8xKF
