The 7 main costs in apps development

With the explosion of the applications market, many people and businesses are thinking in developing mobile apps. But how expensive is this venture? Where are the main costs located?

I have put together a description of the most common costs that this kind of venture have. Here is the list:

1. If you develop it yourself: The most obvious of all the costs. Developing good software application costs money, it's true. But it is not as bad as you might think. If you plan to develop it yourself, think that even the most innovative apps are mostly built on a combination of layers of already written pieces of code, so you do not have to reinvent the wheel. Just google the keywords that identify the functionality that you need, and there is a good chance that  you will get many of hits with perfectly usable libraries. With that said, I need to add that putting together different existing libraries it is not always an easy task and it is not always applicable. To sell well, the apps should be innovative, and most of the time innovation requires high effort. Note: if your are going to use open source code or freeware in your app, do not forget to check the license agreement to see that you're fulfilling all the conditions. And last but not least, if you see a badge with the word "Donation" in the developer's site, it is not a bad idea to follow it and donate some money to the developers. After all, they are making your life easier.
2. If you hire a third party developer or company: There are many, many companies with qualified developers that can help you with this task. The main problem is to find somebody you can trust. I would start searching in sites like odesk.com or elance.com to find freelancers or third party companies specialized in mobile development. If you find find candidates, try to find references. Google their names, follow them in the social networks. See previous works. Once you have all the information, take the decision. And one last advise: Cheap is good, we all want cheap, but if you want your app to succeed, aim for quality.
3. Design: This cost is not so obvious but it is the most important one. You have developed a great application? Good for you. Does it look good? Is it clear for the end user? No? Sorry, you won't sell any. The design is the single most important cost. The code could be just good enough to make the app run, but if the design is not perfect, your app will not perform well in sales. Design apps that are clear for the user. The purpose of your app must be clear in the first screen, if it is not, rethink your design.
4. Sales & Marketing: Today the distribution channel for software applications is the Internet. So, this is where your marketing should be located. Internet Social Media channels are the ideal place to perform marketing campaigns, and if you do it good, it can be almost free. But keep something in mind: what makes your marketing campaign successful in social media? Your app, and specially your app design.
5. Sales Administration: Two words for this: Application Stores. The reduction in the complexity in the invoicing, contracts, receivables, sales statistics, etc, is unbelievable. It was never easier. I prefer to pay the 30% to Apple, Google, BlackBerry or whoever, than deal with accounting and administration. And believe me this, I live and work with the not so efficient German bureaucracy.
6. Customer Service: Houston we have a problem! If your application is a simple small video game, you won't have mayor problems. But If you application is the front end of a broader service or it has more complex functionalities, you need to pick up those calls, answer those emails, monitor Twitter and Facebook, host and moderate a forum, etc. I would say that customer service is the Achilles' heel in this business. You could fail in many places and your business will survive, but if you fail in your customer service, there won't be anybody in Houston to save you.
7. Operations: This cost is only present if your application offers some kind of service. This is the cost involved in running the service itself. In my company we use all cloud based services. On-demand services are the best suitable for start-ups since they usually require low or no up-front cost. In our case we use Amazon Web Services with Ubuntu Linux servers and Squarespace for our web site. We administer the services ourselves from our iPhones with a couple of very useful apps. We use iAWSManager to administer the Amazon EC2 instances, we use iSSH as a secure shell and Squarespace for iPhone to administer our website.

There is an extra cost that I personally recommend. Look for advise from experts. I have read a very good post sometime ago called 4 secrets of the world's most successful businesses where this particular suggestion is described in detail.

Did I forget anything? If you know other important costs that I am missing, just let me know your comments.