Start Up Blog

Advice they’ll never take

Posted in entrepreneurship by Steve Sammartino on October 24, 2013

I was recently talking with a colleague from an extremely large corporation. We were discussing the relative cost of building smart phone applications. He went on to tell me how much they paid for the app after he gave me a demo on his phone. He then asked the price it should have cost to build it. I told him it should only be cost 5-10% of the price they paid.

Flummoxed he asked some advice on how to get things built for this much lower clip. Here is what I told him – Remove your logo from your business card before you get the quote. He laughed and asked if I was serious. I was very serious.

Sometimes the simplest advice is the hardest to take.

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3 Responses

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  1. Sean Callanan said, on October 24, 2013 at 9:06 am

    Good advice Samma, we should have included pricing in our discussion on building apps on Beers, Blokes & Business podcast on building apps – http://beersblokesbusiness.com/10

    • Steve Sammartino said, on October 24, 2013 at 9:17 am

      With services, the recipients ability to pay is often the core price determinant. But from an entrepreneurs perspective it is also tricky knowing what price to ask and not undervaluing service we provide to them.

      A tricky art,
      SS

  2. penny said, on October 24, 2013 at 12:26 pm

    You are right on the money as usual.

    Although I would add that a big company shouldn’t try to pay that 5%-10% price, as big companies are much more demanding on vendors – endless meetings, changing business needs, integrating into more complex IT environments, lots of stakeholders etc.. etc.. If a big company pays the same as a small company, they will likely find they don’t get what they need (and they kill the partnership in trying).


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