SXSW Panel: The Figures Behind the Top Web Apps

This mornings panel is about what it takes from a financial perspective to build and maintain a large web app. I give this one a 8.5/10. What I really liked about these panelists is that they didn't make the discussion about "I" but rather about "you" and what needs to be considered. Of course as a former accountant, I look at these numbers with a bit of a different eye. Giving equity did not mean it was free for example :)

Here are my notes:

Carson starts by talking about barenakedapp.com and how it worked with his wife, Gillian.
Panelists:
Ann Crady – Mayasmom.com
Mark Hedlund – Wesabe.com
Michael McDerment – FreshBooks.com
Beatrice Tarka – Mobissimo.com

Cost to build – to get it live:
DropSend  – $48k
FreshBooks – $20k
Mayasmom – $70k
Wesabe – $200k

FreshBooks – didn't spend anything on design and development – Mike did the design, his partner did the development – $140k went to marketing

Ann – build it as cheaply as possible and get it out as quick as possible.

Mobissmo – used polish and italian designers

Carson – cheap to build an app – expensive to grow and maintain it

Mark – has concerns about working with lawyers for equity

Maintenance:
DropSend – $3k does no marketing
FreshBooks – $46k
Maya – $30k
Mobissimo – $150k
Wesabe – $3k

Ann – must think about how the business scales and you must decide what you doing the site for – biz or fun

Ryan – there are 3 scenarios – fail, barely make it, succeed – must determine what to do

Beatrice – we got some great press including a note in Time magazine which helped to establish a rep for the company, pr people connect but then its your job to connect the company

The panel seems to agree that if you have very strict requiremements, outsourcing to offshore might work, but building a fluid app should be build locally. Ryan hired 2 people in Moscow.. he notes that it isn't outsourcing, they have to believe in the product.