Software development is much more expensive than people predict, including software developers.

Let's say you're paying $200/hour to a software consultancy -- which isn't as much as it sounds, the engineers doing the work will not be making anything close to HN-bragging-level of take-home at that rate, although they'll be doing okay.

120,000 is 600 hours of work at $200/hour billed. So that might be two engineers working about 8 weeks.

Does two engineers working 8 weeks seem so crazy for developing a novel app, full-stack from back-end to design? Not at all.

Software is expensive.

Which means, sure, there's plenty of money in developing it!

Sure. Nevertheless, the "App development" budget for a startup with no users/clients should be $0, otherwise it's not a start-up, but more of a start-middle.

For sure you don't want to spend that kind of money without customers/clients yet. The problem with a software-based startup is... software development is expensive.

Not that contractors will rip you off charging too much for shoddy work -- although that happens, software is expensive even when it doesn't.

If you are paying a consultancy for the software development, you should probably plan on spending six figures in consultancy invoices to even get an MVP -- if you mean an actually working app by "MVP". That's not a lot at all. So... up to you to figure out how to verify your business model before you do that (with an "MVP" that isn't actually a working app yet perhaps), or have a business plan that accommodates it.

At least 70K spent on development before a penny in bookings - and probably closer to 100K given the relative 2020 vs. 2021 bookings. Absolutely insane, and it's no wonder this guy lost almost a quarter million.