Nearshore Americas

State of LATAM Mobile Development: Thin Supply of Developers Yet Increasingly Sophisticated Delivery

Whether you are looking to build a proprietary consumer-facing mobile app or give employees access to enterprise application tools via a mobile business application, chances are ROI can be more attractive with the right nearshore mobile development  partner.  Although mobile development skill is not ubiquitous in LatAm by any means, pockets of mobile development maturity in Latin America are more than evident.  With the release of iOS 7’s local search dynamic, there is more opportunity for more players in the space. LatAm will not be left behind.

One who knows a little bit about working with clients large and small in the mobile development space is Chad DePue, founder of Inaka, a nearshore firm that builds iPhone, iPad, and Android apps with operations based in Argentina.  Inaka has engagements where strictly development services are sought by their customers, however, the company mirrors the trend of high-end nearshore software development services in that Inaka works side-by-side with many clients realizing the product vision, aiding with customer discovery, and running the client through the lean startup methodology to produce an attractive minimum viable product.

DePue talked of providing “bootstrap” services, sort of an outsourced incubator, not just guidance but the technical expertise to build the product as well.  “We’re essentially starting a lot of startups from scratch, but we’re not in the same physical building.  We are getting them from idea to design, to coding, to launch. It gives us an opportunity to share our accumulated knowledge.”  DePue, and other nearshore firms like his, are not competing with outsourcing giants that take specs and build applications with little buyer-provider communication. Inaka is more on an equal footing with domestic consultancy firms offering similar services.

They work with larger clients too that are much more focused around an experience that matches their brand.  “You really have to get into the head of the corporate client and understand how the app will match up with their brand.  They are very particular about the way they address their audience.  In contrast startups are in the process of customer discovery; who is my customer and how do I reach him or her,” explained DePue.  He recounted that it is very different the way a company like his interacts with the two, with larger companies creativity happens around building the product for the already well-known customer while with startups it is much more experimental.

Nearshore Providing Lift and Velocity

DePue described Inaka’s relationship with Whisper, a mobile-based anonymous social network, which shed light on how nearshore mobile development firms are an option for startup companies.  “We built everything, we built the client and the server, and we designed the architecture and wrote all the code up until the first year. We got them launched and everything is going great, but it came the time for them to build a team. That is what they did and now we are in the supporting role, not driving the day to day development,” said DePue.

He went on to explain that for his company it is a huge success because it proves that a prominent startup can be launched with a bootstrap team in South America, go through a Series A round, and continue on with a bright future.  “We started this whole thing, we launched it, and then we handed it off.”  The need for the handoff was no surprise for DePue and his team, he mentioned that during an angel investment round the investors don’t mind an outsourced team, but when it comes time for Series A and middle stage funding rounds, investors look to have an in-house team established.

Objective C and More

Although developers in Latin America are increasing seeing mobile technologies as a career path, a large population of developers already up-to-speed with iOS and Android will not be found.  “It is as hard as it has ever been to hire an iOS developer.  Three years ago, nobody knew it. Today not enough people know it. Either way, you are going to have to train people.  Mobile development in general is not on the forefront of developers minds,” affirmed DePue even though his operations are based in Argentina, one of LatAm’s most mature software markets.

Like other US citizens that run nearshore operations offering development in trending technologies, DePue doesn’t find recruiting all that tough, it is more about getting new team members trained and acclimated to a West Coast-style startup environment.

Our interviewees generally said that although there are more nearshore firms building mobile apps, prices have remained steady.  Despite the increasing complexity of apps, frameworks and better experience with estimation practices have given rise to more cost transparency.  Flat fees for app development have also become more common.  Juan José Navarro, founder of Hexacta, notes that “nobody does anything from zero anymore, frameworks are always employed – the same reach can be achieved with less money.”

Niall Minihan of Kogi Mobile attested that the price of building a custom mobile app, whether it is iOS or Android, is about 40 percent less than in European or US markets.  DePue cited that it is anywhere between 33 to 50 percent less expensive than in the US, although it does not compare to the very low cost some offshore development firms charge.  He also mentioned that there are some really low bids coming out of LatAm at the moment, but he has not seen quality come out of those bids.  As for offshore mobile dev, similar arguments for nearshore culture, time alignment, and quality are given.  As far as freelancers go, Minihan says they can’t do the QA testing or provide the ongoing support a team like Kogi can.  “We have over 60 devices in the office to test apps.”  Minihan also pointed out that companies that work with freelancers often do not account for the added cost of maintenance over the life-cycle of the app.

Local Market, an Unsuspected Growth Driver

Kogi Mobile started with the intention of selling their services to European and US markets. But to their surprise, a significant growth area for the company of late has been its domestic Colombian market. “Over the last 12-18 months, we have seen a lot of growth from the local market, we have already worked with some big companies in Colombia like XM, UNE, and Argos,” cited Minihan.  He went on to say that those same companies previously would have looked outside Colombia for mobile development, but now have the option to work with well established domestic firms like Kogi.

Sign up for our Nearshore Americas newsletter:

Argos is developing a consumer facing app that facilitates the buying of home building materials with features like image matching for a color of paint a customer wants to buy.  The technology can cut out time wasted by consumers going into physical locations for a simple action such as matching paint. Minihan says the explosion of devices running Android in Colombia has given Colombian firms the impetus to act.

With the release of iOS 7, Apple allows for similar localized apps to be released in different local markets.  “It essentially allows me to put an app built for a local purpose in the app store in Petaluma, CA and then a similar style app for San Francisco that do not conflict with each other, I think that really opens up the app store.  Now I don’t have to worry about Apple rejecting me because I put a similar app in my town as the town three miles down the road.”

DePue went on to note that that new dynamic will commoditize the app store to a degree and mitigate run-away apps, but will open up the opportunity for more people to build more apps thus driving growth.  The change amplifies the opportunity for people to create and sell apps for local business and local dynamics, obviously with tighter ROI projections buyers will be looking to lower cost providers based outside the US.

Jon Tonti

Add comment