How To Pick A Development Agency in 2022

How To Pick A Development Agency in 2022

Picking the right development agency for your software product is a challenge. This is a guide to help you ask the right questions and narrow down the right agency.

Picking a development agency is a monumental decision for a brand or entrepreneur. The wrong choice could lead to months of frustration and cost. Worst of all, the development agency holds onto an asset that you paid lots of money for - which could eventually depreciate to $0 if you ever have to replace it. 

To start your agency search, most people turn to Google and start searching for development agencies. Remember the first three results are ads, but all agencies compete for ad space and SEO content. This means that the best agency isn’t always at the top of Google - so a proper review site would be a better source to find top talent. 

The most popular developer agency ranking system is Clutch.co

First, select the platform and location you want your software project to be built in. “Top US Mobile App Development Agencies” is a category we are constantly interested in (and paying) to rank for. Sure, Clutch does a fantastic job at third-party reviews but remember most customers of agencies will only be asked to review if the project went great. 

Immediately click on the Leaders Matrix to see who actually performs in the market and is ranked by Clutch’s algorithm rather than whoever pays the most to Clutch. 

HOT TIP You should only be contacting the top 50 or so agencies in each category in the leaders' matrix. If you see an agency listed in the review section with the word sponsor that does not appear in the top 30 - do not select them. 

Clutch is a sea of development agencies - some great, some retired, some horrible. 

How do you navigate the best way to find an agency when many of the Agencies only promote their highlight reels?

Select 10 Agencies

Scroll through the top 50 agencies in your category and start clicking on a few of the websites of the Agencies that stick out. We all have a spider-sense for people we want to work for and Agencies will spend more time on their homepage than they do on their clutch rankings. 

Clutch does a great job at displaying the most important information on the list view of each agency. You will see the minimum project size each agency accepts, the number of employees, and their hourly rate. From here you can get a sense of what type of agency you are about to investigate. 

Types of Agencies

Cost Per Hour $25 - $49, Minimum Project Size $5,000

Regardless of the number of employees, this is a “Pump it out” agency. These agencies survive by doing a lot of apps per month. Review which country this agency does most of its development to see if you are comfortable with working in that time zone. This type of app usually solves a very specific problem or very limited MVP. Sales and Development will be offshore and there will be limited to minimal quality inspection of the code. 

Cost Per Hour $50 - $99 Minimum Project Size $25,000

This type of Agency will have offshore developers still and have more systems in place to start testing the quality of the products. The larger the team size the more systems this company will have. Check the year this company was founded to ensure that they have been in business long enough to build brand awareness. There is a possibility the sales team could even be on-shore to support their growth. The products that are delivered are still very limited MVPs or limited functionality type apps. 

Cost Per Hour $50 - $99 Minimum Project Size $100,000

Agencies in this bucket will have very regimented systems and repeatable processes. Sales teams AND project management teams will speak excellent English and all of the apps will have quality engineers inspecting the code. An agency of this size will do 10-20 really big projects per year. Things to check out are years in business as these types of agencies will get return customers that last years. Typically, these agencies' websites will consist of a few companies and apps you have heard of before for you to test. 

Cost Per Hour $100-$149 Minimum Project Size $25,000

This is a difficult position to understand and one that you should question heavily during your discovery call. Typically, this price range is set for American developers yet the project size doesn’t seem to support their salaries. Really understand where the developers are located to be sure that your project is getting the service you requested and check to see what type of project manager/quality engineer your code will undergo during the development process. Be Very careful with the sales promises here. 

Cost Per Hour $50 - $149 Minimum Project Size $150,000

If you have the money and want the best of the best this is the category to be in. From my experience, there are very few that fit this category. Fueled, Netguru, Rightpoint, STRV, and Atomic Objects are CEOs that I respect and believe are running fantastic agencies that we at NineTwoThree look up to. You will find apps you have actually used before on many of their websites and will get the red carpet rolled out for the sales process. 

HOT TIP Contact one or two of these agencies during your investigation of building your product. You will get an understanding of what great customer service looks like. It’s equivalent to walking into a Mercedes Dealership to test drive an E class before buying the Honda you wanted anyways. It’s just nice to know what premium feels like. Who knows, every once in a while the agency will like your idea and want to build it with a bench team (which is still an all-star team.)

View the Portfolio of Their Website

Before you started investigating agencies you had a pretty good idea of what you wanted your app to look like. Hold that vision in your head and select the few agencies you have narrowed down your investigation to. Are the apps on their portfolio page match the type of style and feel you wanted your app to have? Do they build similar apps to what you have in mind? Are the end customers of the products similar to your end customers?

For example, if you want to build an app in the Food Delivery space then are there any portfolio items that have to do with delivering food or packages? If you are an influencer building an app for your following - does the portfolio have other influencer apps? If you want to connect your app to a device - has the agency done this before?

Check out the team on LinkedIn

Head over to LinkedIn and check out the current employees that work at the agency. Remember the number the company listed in Clutch? Does it match the number of employees that claim to work for this company? Remember, that LinkedIn is controlled by the user - not the company - so the number of employees should be within 10-20% of what Clutch says. 

Another important piece of information you can gather from LinkedIn is to click on each person to see which country they are from. Typically an Agency will have 1, 2, or 3 offices. Why? … Cost.

Agencies could have a sales team in America, a Management team in London, and a Development team in India. Even though Clutch lists them as American - their actual team you will be working with will be in a different time zone. Some agencies go the extra mile and hide their 3rd office - but LinkedIn will sniff this out. The location (or previous jobs) of the employees will always tell the truth of what time zone you will be working with. 

On a positive note, LinkedIn will also demonstrate the company culture. A good company with good communication will have a lot of internal interaction with the social feed. The company profile will promote employees and celebrate birthdays/anniversaries / and projects. Basically, the more interactive the team is - the better the team culture will be. If this is something you are interested in - LinkedIn will give you all the answers you seek. 

Contact The Agency Three Quick Questions

I’ll make it super simple for you. Here is a draft email you can copy and send to the top ten agencies on the list of choices…

Hello {Agency Name}, my name is Quinn and I am interested in building a native mobile application that picks which shirt I should wear in the morning by the mood I am in.

Do you have developers available to work on this project if we started in July?
                                                                                                                                                                                      
What were the last three prices you quoted for an iPhone app (of any kind.)? Which Developer will work on my project and what projects have they worked on before?   

Thanks, Quinn

The goal of this email solves three massive questions Agencies try and fool us all with. Let’s dig into each question in particular to understand the nuances. 

Do you have developers available to work on this project if we started in July?

The first question addressed the availability of developers. This is important to understand if the Agency is a massive operation or a boutique shop. More importantly, you are selecting the date you wish to start your project. This provides the agency with a framework of how to approach the call. 

Think about calling a plumber. There are typically two scenarios. “I need a plumber right now!” or “I need a faucet replaced sometime this month.” Both have very different cost structures (and availabilities of the plumbers.)

The more developers they have on the bench the larger the Agency. For example, Netguru has a massive 900-person team with a very large bench. They are fully capable of taking on almost any request, size of the project, and type of product. Their response might be “Sure what is the project, we can start right away!”

On the opposite end of the spectrum, a fantastic operation like ACG is very boutique that embeds its developers right into the Client's company and produces extreme quality. The answer to this question from ACG might be “Depends on what type of team you are looking for.”

By kicking off the conversation about a deadline you might even get “We are all booked up through September” making your search easier and saving a few phone calls (even if the Agency is great.)

What were the last three prices you quoted for an iPhone app (of any kind)?

Pricing out an app is hard - but for the most part, an Agency will gravitate to building a specific type of app. What this means is that the size of the app that they usually win from other clients could match the same size app you are requesting. App agencies typically fall into four categories. 

Companies like X, Y, and Z fall into this category because they cater to the entrepreneur. The entrepreneur has an idea or a concept and needs something prototyped and developed to test the market. Usually, these apps have limited functionality and are built by developers focused on speed over quality. Complexity is the enemy here because it will complicate the delivery. 

This is the bulk of the bell curve of apps developed by Agencies. Every agency will do products within this range because the 10-50k’ers will eventually hit a home run client or the more experienced agencies will backfill their bench with projects of this size. 

The output of this range gets you an MVP that can be battle-tested by end-users. You will still get an app with limited functionality and probably still only on one platform - but the app should be close to 95% crash-free. 

Do not choose Hybrid apps if you are in this price range. You can understand why here.

Most Entrepreneurs want a fully functioning app that will work on both Android and iPhone and produce revenue on release from the app. Brands want an application that is incredibly stable with complex functionality like user permission matrixes or multi-account usability and at this price point, they are asking for too many features just to support the higher number of customers than the lower ranges. 

What happens in this range is that the expectation is to get a $250,000+ app - but the funding just isn't there yet - so the client is looking for a $150,000 app. This leads us to the danger zone where the agency has to drop its prices to support the lead OR the entrepreneur/brand has to increase its budget to accept the higher quality app. 

Not all agencies can produce a $250,000 application. In fact, in the top 25 agencies on the mobile development agency list on Clutch, there are 6 agencies that produced a $250,000 or more application - and there were only 4 (including NineTwoThree) who had done this 3 times or more. 

These applications require interviews, in-person meetings, team discovery, and a foundation. The Client will want to know who is going to work on the project - lawyers will get involved on the terms - this type of application CAN NOT crash - like ever. 

Once you push over $250,000 the team is battle-tested in building robust applications and has the experience to work with engineers on the client team. 

This is why you ask the next question regardless of scope…

Which Developer will work on my project and what projects have they worked on before?

There are agencies that produce hundreds of apps and have beautifully designed landing pages for each app. Surely, you can download that app and understand how well it works - but where is the developer now? Does he still work at that company? Who will work on your app?

This question is vital. Agencies are really good at creating processes for their team. When they hire developers and engineers the process will allow the engineer to produce quality code alongside a project manager and quality engineer. If the process is great, middle to senior engineers will excel and create excellent code. However, junior engineers will be learning how to code on a team and learning a process at the same time. They also will not have the experience on the other agency projects - so ask which developer you are going to get!

Alternatively, if the agency does not talk about the process then they might not have one. Meaning that the developer you get is SUPER important. We all know that business is about procedures and repeatable processes because when that star engineer leaves for the big show - the dust is never going to survive. 

Focus on Hours Not Price

The recommendation is to get multiple quotes. Every agency knows that the price is going to be a discussion point so we will all bounce around words like “ballpark price” or “estimation” or “MVP price.” Do not worry about the price. 

What you need to do first is establish an anchor. Anchors are what you feel like you should pay for the app. If you have never bought a business before and you walk into the local gas station and ask “how much would it cost for me to buy this place?” You might be shocked to find out the owner would not sell for less than $7M. Why? Because your anchor might be $400,000. But you didn't know that in the gas station industry - this particular gas station gets 500 cars an hour. You get the point. 

Anchor your app - call agencies and get a few ballpark prices. Make sure you leave the phone call with the second question in your email. 

But then forget about the price. Focus on the hours for the rest of your agency partnership process. 

By the time you get to the proposal state, you will get estimates with all different prices. Do not worry - focus on the hours. The better agency will provide you with a breakdown of costs for each feature you want to build. The even better agencies will estimate how many days each section of your app might take. We at NineTwoThree can produce an estimate with over 100 features in less than a week. Most importantly our estimates are within 5% of the actual build cost. (But you cant learn this during discovery.)

The hours will be your marker. Line up the agency estimates and notice how far off the estimated hours are for your project. It does not matter if the developers are from India, Ukraine, the United States, or Mexico. A login screen is a login screen in the same way that a bathroom is a bathroom. It takes 3 weeks to build a proper login screen the same way it takes 2 weeks to frame a bathroom. 

Create a Bell Curve of the hours from your estimates and throw out the bottom few - regardless if you like them. They do not know how to estimate and did not take the time to engage you during discovery. 

Do Not Get Fooled

Oh, the tricks agencies can play. Here is a list of tricks I have seen in the industry that give all of us bad names. 

The Sunk Cost Gotcha Agency

This is by far the most common thing we hear in the agency world. A development shop will have a very good sales rep that promises the world. The client will be wooed and sign up for a $100,000 application. 

BONUS TIP: Read the terms and agreement - make sure that you can exit the contract at any point and own the code that was built by the day you exit. 

After about a month the client will start to realize that the project is falling behind. “But do not worry,” the sales rep says - “we delivered hundreds of apps, we will catch right back up.” Two months go by and you start to feel that you made a huge mistake. Communication has dropped off and you still have not seen a build. “Have no fear, ill swap PMs, you will be fine.” Then 4 months and you are out $75,000 - but you still have nothing to show. 

What the client feels is the sunk cost fallacy. They do not want to quit and the agency knows it was never going to deliver on time. So the timeline is extended and the project is delayed while the client waits and waits sitting on their sunk costs. Finally, when the code is delivered - the product is buggy and the Client is embarrassed. 

How to Avoid the Sunk Cost Gotcha Agency?

I wish I had an answer for you on this. Salesmen will be salesmen. One way I avoid this on my sales calls is I show the client a few active projects and their expected timeline. You can ask for this - if they show you one project chances are they are legit. My assumption is that if an agency does this on one project they probably are late on all projects. 

Be careful reading reviews too. Reviews can be executed on month 1 during the honeymoon stage. Sunk Cost Gotcha Agency also knows this so you will probably see a lot of “Currently in progress” or “we are one month in and in love.” 

Talk to clients of this customer that have completed the project. If they are not on Clutch call them. 

The Ghost Agency

Of course, American developers are sought after just because they are American - but are they really better developers? I'll leave that question rhetorical - but the better question is who is actually developing your application?

There are agencies that will explain they have American developers - even tell you that all the projects on the website were built by American developers - even introduce you to Timmy, the American developer. However, the entire app will be built by developers from another country while Timmy monitors their code and takes all meetings. 

How to Avoid a Ghost Agency?

Agency owners talk to agency owners. Ask the CEO of the agency you are hiring who else he recommends in the industry. I have 3-4 agency CEO calls a month and will know about almost every development agency by sending a few messages. 

If you are talking to three or four agencies you will find that they might know each other and more importantly know another agency that you are thinking of hiring. Usually, the agency owners that have many contacts in the space are reputable - and the ones that talk about their dream homes and Bentleys are not. 

Another way to check is by checking out the team on LinkedIn. Even if the agency is not allowing their employees to put their company in the bio - the United States managing staff might all be from the same country. You can find this out by looking at the previous companies they worked for and which country it's from. 

The Hybrid Solution To Everything

If you want your app to last for less than one year, redo it every other year, and have developers retire from ever writing code in your language then hybrid is for you. It's great for MVPs, prototypes, and experimental ideas - but horrible for real customers. The time saved is not much if the application is built correctly and the cost of maintaining the app will cost more than if you had just built it natively. We have done the math and tried hybrid. Never again. 

Ready To Build - Ask For The Terms and Conditions

Every good agency has a Master Service Agreement ready to go. Ask for it from any Agency you are willing to work with. Honestly, if I was in a position to pick an agency I would pick 5 CEOs on LinkedIn that I believe have my morals, call their sales reps, and ask for the MSA (on the first call.)

What does an MSA tell you….oh boy, get ready for the most tell-tale sign of what you are about to get into. 

Termination Clause

Do you know that people sign up to work with agencies, commit to $100,000 or more, and agree that they will pay 100% for the product regardless of quality?

Imagine buying a house and waiving the inspection clause….oh, I guess I walked into that one. I guess you can do this - if you have a high-risk tolerance. But why?

Wouldn’t it be better that you pay milestone payments every month and receive the code for what was built already? We at NineTwoThree for sure think so and put this into the first draft of our MSA. At any point, for no reason at all, the Client can cancel the service. Within 30 days we are required to complete all the development up to the point of termination and deliver the entire code to the customer. 

We have never enacted an early termination clause and are so confident that we produce quality projects that we do not mind giving the customer the option to cancel. Our history has demonstrated that we do not need to think about this part of the agreement. 

But you know who does? 

Agencies that get burned by early terminations. If the management team cannot control the quality and customers keep canceling prior to completing the project then the agency might ensure this clause is NOT in their MSA. There will be no mention of early termination and even have language around paying for 100% of the agreed contract regardless of any cancellations - oh boy that one would sting if you didn’t read it right. 

Taking On Code Ownership

This should be so easy. Every Agency should turn over 100% of the purchased code upon final payment. Period. 

Once a month we get a call from a potential client that has an Agency that is holding them hostage for additional payments to receive their code. Or worse, committed to never sending the code to the client because it was part of the agreement. 

When you read the MSA, ensure that you own 100% of the deliverables at the end of the project. 

HOT TIP There is a part of the agency talk called “Interim work” which is basically code that is developed using libraries or other project code. Agencies will do repetitive tasks like login screens or profile screens. It is fine if the Agency does not give up this technology - but remember it is still part of the final code. So even though the Agency holds onto the IP of the Interim work, you still get to see how that interim work integrates with your project when you get the final code. 

Warranty Period vs Guarantee 

This one is simple to comprehend that it feels good to get a Guaranteed product and is better understood by one of the greatest salesmen of the 90s. Tommy Boy himself. 

(2) Tommy Boy Guarantee - YouTube

Guarantees in contracts are useless. What are you agreeing to that the code works? Well, you logged in right? After you logged in the dashboard button took you to the settings screen and the back button crashed your phone. “But we guarantee the product works.” 

It’s ambiguous - look for warranties. 

Warranties are a period of time that you get to test the crap out of the product you just got. You can send it to a million customers or your mom. Click on every screen and try and see if it works underwater. If the Agency knows they deliver a quality product they will have a 30-day warranty to fix anything that was promised during the foundation. Basically, if the agency said you were getting a purple dinosaur animation eating the traffic on the navigation screens - you better make sure you sit in hours of traffic waiting for the dinosaur - and if not the agency will fix it regardless of time. 

Warranties are a way of an agency telling you - we mean quality. We produce crash-free apps and we are confident we will build one for you. If this is not in the MSA ask for it - as you will not be the first one to ask. If the agency is confident they will oblige. If they wiggle - they worry about their quality. 

We have even sent out proposals with a $25,000 kickback if the app does not achieve 95% crash-free users. How is that for confidence?

Final Thoughts On Choosing A Development Agency

Choosing a development agency is no simple task, especially since this is a partnership that can last long-term. Using these guidelines will help you to select an agency that offers the best results, so make sure to bookmark this guide for future use.

Subscribe To Our Newsletter