How to start and run a social network

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How much does it cost to build a social networking platform from scratch?

with 54 comments

Here’s how much (I think).

That’s the question an acquaintance asked me once. The question actually caught me off-guard because, I am used to people saying – “ooh”, “aah”, “That sounds so much fun”, and so on – when they here what I do both in my day-job and my moonlighting affairs. But when I was asked this question, my mind started swirling a bit (maybe because it was my second glass of wine at the alumni reunion… but whatever). Although I gave him some numbers that he ‘seemed’ to be convinced with, I thought about what would be a ballpark number of moolah one would need to build a Facebook or a Hi5.

So, I set forward to create a spreadsheet that will give an ‘indicative’ number for this. First, I listed down all the possible ‘feature sets’ or ‘story titles’ (depending on which development style you may want to follow). Then I started adding effort estimates for each of them completely based on my experience/gut-feel.

And then I started to think about outsourcing. Somewhere on Mashable I read about how programming skills are getting commoditized (is that the correct word?) and what matters is the main idea or concept. Now, if you’ve read my previous blog you would know what I am talking about here. So, if you want to just own the concept and you want to focus all your energy and resources in building a community on your platform, then outsourcing platform development would actually make sense. Now, there are various implications and factors that influence the decision of outsourcing your platform development – maybe I will save that topic for another post. But at a high-level, outsourcing can be of 2 types -

1. Complete (offshore) outsourcing of a custom built social networking platform

2. Using white-label, on-demand platform vendors to build and customize your community on top of it.

Both are completely different animals and need different set of skills and resources to manage them. So, just for the sake of discussion, let us focus on Option 1 – complete custom platform development.

In my spreadsheet, I started factoring on offshore costs from 2 theoretical locations. But the efforts involved in managing outsourced development is not the same as an on-premise engagement. Therefore, I added ‘Effort’ columns for outsourced work as well.

Taking all this into account, my “highly scientific” methodology of effort and cost estimation have led me to believe that a non-differentiated, plain-vanilla social networking/community platform can be developed well within a $100k budget. Of course, this can be made more cost-efficient by adding the offshore factor, which can bring the development costs to around the $50k mark.

Now, I am not sure how aggressive or pessimistic this estimation is. So, feel free to take a look at my spreadsheet and use it for your own planning needs (no copyrights whatsoever). And yes… If you feel that I may be way off mark here, I would love to hear about it. Let me know if you find something missing or if you think my estimates are too aggressive.


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Written by kvinod77

January 5, 2008 at 2:35 am

54 Responses

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  1. Thanks! Great information!

    Zack McTee

    April 22, 2008 at 6:54 pm

    • Almost accurate estimate as we are building it will be live very soon
      cheers

      YS

      February 27, 2013 at 6:51 pm

  2. This was incredibly helpful – thank you!

    Anna

    May 14, 2008 at 2:22 am

    • I have just gone through this process! I built a social network that is as big as Myspace with a craigslist attached. I have had a situation happen where I am no longer going to do this… If someone is interested I would like to sell or be a silent partner to someone who is looking to do this. I have the site all done but cannot do it as my son needs all my attention.

      T. Parker

      March 4, 2011 at 6:44 pm

      • Hi,
        I know this is a older posting, but I’m interested in discussing your platform. Please let me know! Much appreciated, thank you.
        -Taylor
        Contact: Empireskyline@ gmail. com

        Taylor

        January 18, 2012 at 11:56 pm

      • I’m interested. Can you please send more details about your site if you still have it.

        Mounir

        February 14, 2012 at 9:51 pm

      • Dear T
        I am interested to spk more – pls mail me on emwllp@gmailcom Thanks Ali

        A Davis

        April 20, 2012 at 4:41 pm

      • Hi

        Still for sale?

        Khaled

        May 24, 2012 at 7:49 am

      • I am intereseted in buying the social network as I a young aspiring entrepreneur who believes that it will be a viable business venture

        mohapi

        June 8, 2012 at 1:28 pm

      • Hi, I have an idea for a social network and am interested in talking to you more about this,. Wondering if it could be adapted for what I am looking for.

        I have to say as a parenting/ marriage and family coach, I have a great amount of respect for you for putting your son first!

        Looking forward to hearing from you soon! (Gosh, just realized how old this post is! I’d still like to discuss the details if you have the time!)

        jeanniescrossroad

        July 5, 2012 at 9:37 pm

      • I am aware this thread is aged but I am willing to accept full responsibility for your site. If you have sold it, please let me know to whom as I am a business man and specialize in social networking.

        Brett

        July 10, 2012 at 6:51 am

      • this is Brett again, my email is bpriester12 @ g mail (.) com

        Brett

        July 10, 2012 at 6:52 am

      • hi,..send me details to skarthyca@gmail.com.let me know more about this..interesting..

        ghgderaan

        August 7, 2012 at 3:45 pm

      • i m interested to discuss about this..

        ghgderaan

        August 7, 2012 at 3:51 pm

      • send me cost details to skarthyca@gmail.com.happy to know more about this..

        ghgderaan

        August 7, 2012 at 3:52 pm

      • Thank you for your message, can you please send me link to your social network

        Denis

        September 25, 2012 at 6:27 pm

      • i cn hlp…. jaganr.biz@gmail.com

        JAGAN

        October 5, 2012 at 7:42 am

      • how much do you want for it. email me @ gerardmorrison@sbcglobal.net

        gerardmorrison

        February 6, 2013 at 9:59 pm

      • Listen dont let this opportunity pass you up a great idea can come from anywhere I have the next big thing and my site actually helps people get to the next level in there lives email me for more info selfmadekingz123@gmail. Com im looking for a co-founder this site has the potential to make billions .

        derrick king

        March 27, 2013 at 5:16 pm

  3. Hi Vinod,
    I am very glad to find your blog!
    I am preparing now a business plan for building a new social network, but I am not a technical guy…. Do you think that your cost estimations for building a social network are good enough to be presented to VC’s?
    Thanks!
    Shay

    Shay

    July 12, 2008 at 3:47 pm

    • Using the word social network when talking to VC’s these days will cause them to dismiss your idea…the social network market has been dominated by Facebook and all of the others. You’d have a better bet labeling your product or idea as something different or as a tool rather than a social network.

      Dave

      March 12, 2011 at 4:31 am

    • i have a very good idea for a socail network if u would like to talk to me please get back
      to me at my email tracywatts2785@yahoo.com. it is a very good idea, just as or better then
      facebook or myspace, it’s a great idea. please contact me through my email, i need help on this!

      tracy watts

      March 22, 2012 at 3:58 am

  4. Thank you for your blog. What is the approximate operational costs for myspace or facebook?

    neang

    January 27, 2009 at 8:18 am

    • Hi Neang,

      It depends on what you mean by operational cost. And do you want to know approximate operational cost for facebook and myspace specifically, or of social netowrks of similar nature?

      -Vinod

      kvinod77

      January 29, 2009 at 5:00 am

      • I like this conversations fellas. But to throw another variable…or possibly less variables in the mix. Doew anyone have an idea on the amount a site like eharmony would cost to build? Is it more or less difficult? I have an idea but no knowledge in this area…chemistry really doesnt prepare you for computer science. Thank you in advance

        marvin

        January 7, 2011 at 8:44 pm

      • Sorry for double post first one I gave a typo email.
        I like this conversations fellas. But to throw another variable…or possibly less variables in the mix. Doew anyone have an idea on the amount a site like eharmony would cost to build? Is it more or less difficult? I have an idea but no knowledge in this area…chemistry really doesnt prepare you for computer science. Thank you in advance

        marvin

        January 7, 2011 at 8:45 pm

      • hi sorry to jump in the middle of this. but i have a few things im working on too, but have noooo skills in coding or design or engineering at all. so where would i go, and would i pay a flat rate to create a site, or pay by the hour? and would i need to create the site first then search for funding, or apply for a loan to create the site?

        eddy

        March 26, 2012 at 6:35 am

  5. Wow! Thanks. I now know that I need to seek some funds:)

    ABCrane

    January 30, 2009 at 5:27 pm

  6. продам Форд-Фокус 2008 года за 200 тр. торг возможет. срочно!!!
    +7 960 200 9209

    Jakarklorycal

    March 8, 2009 at 2:55 am

  7. apollomatrix.com will make you a custom social content site for 10K it has all the common social network functionality and plenty of any extensions available. They will complete a custom business development program for you.

    If you are looking for a 48 hour turn around and a smaller site you can use http://buildasocialnetworkingbusiness.com/ They usually have a 48 hour turnaround and can be extremely helpful with understanding how to run your site. The owner just contacted me and told me April 1st 2009 they are starting 100 purchases for $100 at http://buildasocialnetworkingbusiness.com/ … hahah craziness

    bry

    March 22, 2009 at 4:42 am

  8. the link to the spreadsheet isn’t working : ( please tell me how I can access this?

    Kristin

    July 28, 2009 at 3:23 pm

    • ya , link doesnt work anymore. any idea to find someone helping me to launch a social or commerical website which might earn me effortless monthly extra income ? thanks

      Mehr Liaqat Jalvi

      August 25, 2012 at 9:30 pm

  9. I’d like to add you to my professional network on LinkedIn based on reading blog about facebook app buildling. I would like to have one built. that is expensive and large investment for something that may not succeed. do you know, how do you know if your success rate will be able to cover the cost of production at minimal? thank you.

    Anna

    September 2, 2009 at 3:28 pm

  10. Thank you very much buddy!! it helped me.

    sandip

    December 8, 2009 at 6:29 pm

  11. Hi,
    I think your estimates for development are maybe a little low.

    It depends on who your outsource partners are and how good they are. And you have not included Graphic Designer costs either.

    I think if you want something of really good quality that people are actually going to want to use …. then you’d struggle to get it done for less than $40,000. Also you are not including your own time there in project managing the project. You can either spend time or money but just managing the project, providing feedback, testing etc, takes a lot of time.

    I have just done a project with about 8 uniquely designed pages, plus a number of simple form based pages, plus database etc, all Php/MySQL/AJAX, for about USD $60,0000 including project managing (paying a 1st world salary). The Indian programmers we use charge $15 an hour. They are good but I’d defintely NOT leave them to their own devices, they are good programmers, but not designers.

    If you want a website that is scaleable then you need a good designer who can build it with future proofing in mind and you would struggle to do this by offshoring it.

    Peter

    Peter

    December 17, 2009 at 10:28 pm

    • I like these conversations fellas. But to throw another variable…or possibly less variables in the mix. Doew anyone have an idea on the amount a site like eharmony would cost to build? Is it more or less difficult? I have an idea but no knowledge in this area…chemistry really doesnt prepare you for computer science. Thank you in advance

      marvin

      January 7, 2011 at 8:46 pm

    • Peter,
      the site you built was a social media site? did you go to vc’s or is that even possible without a site already in place?

      michael

      February 4, 2011 at 12:29 am

    • Please how can I get in touch with you. I have an idea and i really don’t know where to start. I would really appreciate tips and directions on how to do this. Contact esujohn@gmail.com

      Esu John

      August 12, 2012 at 7:35 am

  12. ok, great info… let’s say you were to get a site like this off the ground… how much ‘traffic’ or number of members could it support? If it got lucky and became an ‘overnite’ success – how do you scale up hardware to handle growth of members?

    Or put another way, based on your cost estimate – we open and we got great exposure and tons of people flocked to the site – would it crash because it was designed of ‘x’ number of UV or page views per day and was overwhelmed because the initial site was not sized for the large amount of traffic? (does this make sense?)

    thanks

    Jake

    January 9, 2010 at 6:04 am

  13. Thanks for sharing your estimates.

    I assume 60/hour in the US should guarantee high-quality work, no dead-ending, standardized style etc.

    I’m trying to identify the range of cost for this type of work and I’m seeing about $40/hour for the average.

    Bryan Basamanowicz

    January 21, 2010 at 7:20 pm

  14. By the way are you still Blogging?? Not quite sure how to subscribe…

    Bryan Basamanowicz

    January 21, 2010 at 7:21 pm

  15. Vinod,

    I was wondering if you could give a ballpark estimate for a social networking platform using the “white label” programs available. I have no idea how I would even begin to gauge the price, im just a marketing student with an idea that I would love pursue. Thank you

    John Severin

    February 18, 2010 at 6:45 am

  16. Interesting analysis.

    Is ‘design’ in your spreadsheet IA/UI or for the design phase of development (as in architectural programmer)?

    Gut reaction, it’s an overly opptomistic estimate – I think you’ve underestimated the development time, development normally takes at least twice as long as design. In which case you’re looking at adding another at minimum another 1/3rd to the cost.

    Are your development timings based on purely functional server-side code or does it include front-end development (this is really the same as my design vs architecture question from a different angle i guess)?

    Plus you’ve got to consider scalability of code and hardware, either adds complexity and cost to the project as a whole. As, if you’re aiming for a large and succesful social media site then you’re going to need all aspects to be ‘fine-tuned’ that’s an expensive requirement that needs specialists (for every different aspect: front-end, DB, server-side code).

    Interesting enough that i’m gonna browse another couple of your posts :)

    Matt Newman

    April 9, 2010 at 12:37 pm

    • Matt, seems that you know a lot about this, have you or are you capable of building your own large social site?

      michael

      February 4, 2011 at 12:31 am

  17. If you use a CMS and build off of that you can save significantly on cost. These include : pligg, joomla, drupal, etc. There are many free plugins/tools available as well.

    For my next project, I want to build it from “scratch” but may use one of the CMS as a backbone.

    mba student

    October 1, 2010 at 6:15 pm

  18. Hello,

    I would like to start off by saying this article was extremely helpful, especially with the extra spreadsheet. But, being new to the business world and a freshman in high school, I have some questions regarding the spreadsheet. I am sure they are completely atrocious and silly, but I have to remind you: I am new to business and cash flow statements.

    1) What is the difference between ‘Tier 1′ and ‘Tier 2 Offshore’? What exactly does that mean?

    2) What is a ‘white-label, on demand platform vendor’? I understand that it is outsourcing, but I am unsure as to what it exactly means.

    3) On the spreadsheet, on the second page, it says ‘Estimated Billing Rates’. What does that refer to? What are you being billed for?

    4) How much would it cost to also include:

    Media/Web document uploader
    Media/Web document downloader
    Media/Web document archive

    5) How much would it cost to have multiple servers, to possibly host a full database of documents and/or presentations, or other media?

    Thank You! This has been extremely insightful! I am competing in DECA competitions, which involve business knowledge, etc. And since my product is a social network, you blog has been extremely helpful!

    S G

    December 3, 2011 at 1:23 am

  19. question: would any of you (non expert in computer science) dare to outsource the development of a social network/groupon fusion platform (if you can imagine one) to India? would that bring the cost of developing it down to a more reasonable rate? as for “loss in translation” issues, i wouldnt mind spending the time it will take to develop it there in order to make sure the product fits the idea… your thoughts will help a lot! thanks!

    dumerilii

    December 11, 2011 at 11:36 pm

  20. How To Make Money with Social Media | Driving Traffic is something i will look into.

  21. Yeah facebook started wit a budget of $450 or something like that. You can start a good social network for $5,000. Its not about how much money u put in to it, just look at facebook, its plain and simple not to much not to less. You just need a good name and alots of motivation. You put your time and heart into it you can do it, nothing is easy but know you dont need a $100,000 budget thats bullshit!

    demetrick smart

    July 4, 2012 at 12:24 am

    • Facebook started with a budget of $15,000….

      Weston

      October 22, 2012 at 6:20 am

  22. [...] “How to start and run a social network”. kvinod77. http://mysocialnetwork.wordpress.com/ 2008/01/05/how-much-does-it-cost-to-build-a-social-networking-… [...]

  23. WOW My post may never even get read at all. But wow… just a little bit of patience, and a little bit of reading, coupled with a little bit of common sense, luck, faith, and skillz… you can be as rich as facebook, and just as plain as a canvas, and just start planting seeds, and building your community as you go….

    thank you I am http://www.mzztlove.com the internet’s best kept secret UNTIL now!!!

    Mzz TLove

    August 15, 2012 at 5:12 am

  24. It is a nice list that brings a simplistic approach. While I don’t agree at all on your data estimates, it will give some starting bullet for anyone starting a community site built from a cms, such as JomSocial , Social Engine or any of the hundreds of solutions that exist.

    Your title is misleading, there is quite a difference between a simple community site and a social “platform”. A community site might have the look and feel of a platform and they might feel comparable, but its like comparing a fighter aircraft to a fork lift.

    A community site like Jomsocial is great for most project, there are social feeds that feel similar (or even better) than Facebook, you can post pictures and videos alone or in galleries, you have a user management dashboard, an event manager to build social events, integrates webinars or any similar task requiring a date and a time. You have user groups that could be made from friends and relative just like facebook, and its extensible: you can buy addons that are like little boxes of code that you add to your site to add new features.

    All that is great if your requirements are not too exhaustive, your keep a moderated traffic and a relatively low number of users connecting simultaneously. The largest community site that is cms based is busuu.com with 12 million users, 45th community site by user and 29239th site by traffic. When you get to that level, you might have an easier access to build a platform and stop using a site.

    So what are the difference between Facebook and a social community site?

    – Scalability – Your system have to be able to receive 10’s or 100’s of simultaneous connections.
    – Facebook has its own integrated OS, you can build applications on Facebook. To explain things in a simple way: Frameworks are built under OS, with a framework, you can build a cms, under that cms you can build a social extension, and under that extension, you can build your average community site.
    – You can integrate php parts on a cms based community site. No python, Ruby or Perl… CMS will run on these, they are the engine.
    – Let say you are successful with your site: you will have room to multiply the first installation by 60 times to reach the limit of your Godaddy or siteground account. Let say you multiply your first installation by 20,000 times… would you be on a comparable level with Facebook? With 20 Petabytes of Data, Facebook will still be 20 MILLION times larger than your site.
    – As for the required time to code the platform, the most conservative estimate talks of 2 Million Hours. Unless you manage to find extremely good programers that will accept to receive $0,0015 per hour ($0,06 / week or $3,12 per year), the odds of respecting your budget are pretty thin !

    Jason Mailley

    October 25, 2012 at 2:07 pm

  25. Im trying to make a social site too, and i feel my ideas are better than facebook, i just need help with making it… I have the ideas, but im not good at coding or anything… Im an idea guy, if anyone is good at this let me know

    insanefreak21

    February 20, 2013 at 1:33 pm


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