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How much do organizations spend to develop new digital products?

by Mike Fishbein in Roundup
November 2, 2015

To compete today and avoid the fate of Blockbuster and Kodak, virtually every company must enter the digital arena. Yet, despite so many businesses doing so, little is actually known about digital product development costs. Practices that once worked for physical factories and products are now applied fruitlessly to digital products.

To develop better practices, many important questions must first be researched and answered, including:

  • What exactly are the costs involved with building a product?
  • How long does, or should, it take to build a product?
  • Do most organizations build digital products in-house or do they use an agency?
  • How do organizations budget for the costs of new features and user research?
  • What are the ramifications of not following best practices?

Our new report holds the answers to these questions and more.

How we collected the data

To uncover these benchmarks, we partnered with Mindgrub to survey 100+ product managers from numerous industries and company sizes. Our respondents hailed from companies that range from startups to some of the largest organizations in the world:


We actually had more than 20 industries represented in this survey, but simplified many of them into four encompassing categories. Respondents from technology companies were the most common, but services and manufacturing made up a sizeable segment, further illustrating the prevalence of digital product development across industries.


A peek inside

More than half of our respondents spend more than $50,000 per month on building a digital product:


But as you’ll see from the report, this result is misleading before breaking it down further into monthly costs juxtaposed against company size. The full report explores this further while also presenting interesting findings on budget expenditures, tools and methodologies used, the ramifications of a failed product launch, and more.


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Mike Fishbein

Mike is an expert and author at Alpha. He is the host of the industry-leading podcast, This is Product Management.

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