Why Startups Should Outsource Software Development

Running a tech startup is hard. You may have funding, but you need to get a product working, fast. There are two options for creating a minimum viable product: either hire a third party development team, or build your own team from scratch.

Building a team adds unnecessary complication, costs, and risk to your business. Many startups that build their own team run into hiring problems, take too long to get to market, or run out of money. Outsourcing software development, on the other hand, helps mitigate these issues.

Reasons why startups should outsource software development include:

  • Saving resources on hiring

  • More time for the rest of the business

  • Larger talent pool

  • Faster time to market

  • Prevents work interruption

  • Lower costs

Saving resources on hiring

A startup might begin with just one or two people. But building a product can take a whole team of developers. Hiring all those developers to create an in house team wastes time, costs resources, and can cause more problems down the road.

A Quartz analysis showed that 10% of startups fail due to hiring issues. It is difficult to tell ahead of time whether a new hire will be a good fit. They could turn out to lack key skills or discipline. Additionally, new hires usually do not know each other, and are not used to working together. It can take weeks or months for new developers to get up to speed working on their projects.

Hiring a development team solves all of these problems. Third party development teams consist of vetted developers who already work well together. They have had a long time to get used to their own workflow. Additionally, the team can include experts that would otherwise be hard to get by hiring a small in house team.

More time for the rest of the business

With any business, creating a viable product is only half the battle. Startup founders also have to take care of marketing, managing the business, and obtaining more funding. Outsourcing any part of the business can free up time and energy to focus on the rest of it.

With a third party developer, you save time on hiring, management, and development. An outsourced team will usually provide a project manager to take care of the process and make sure the team is aligning their goals with yours.

Larger pool of talent

If you only have three developers, you only have three developers. But if you hire a third party team, you may get access to the skills of 30 or 40 developers, even if three of them do the majority of the work on your product. This means you can get expert skills without having to hire additional expertise. It also means you can adjust over timing, scaling up the project as needs change.

Faster time to market

The tech world moves fast. Startups that get to market early have an advantage over those that get to market later. Third party software development speeds up development in several ways.

Outsourcing your development means you can skip the hiring process entirely, which could take weeks or months. You can also communicate your schedule to your outsourced team so they can plan time accordingly. Also, a larger team means you might not have to wait as long for expert input.

Prevents work interruption

Running a small in house team can be lean and cost efficient, but it is fragile to sudden changes. One member of the team may suddenly have an accident, quit, or go on parental leave. This can disrupt your workflow, leading to development issues, schedule conflicts, and a later market entry.

Hiring a third party team prevents this from happening. Because these teams are usually larger than the small in house team you would have hired, if one person leaves suddenly, there are other developers who can pick up the slack. Additionally, existing teams may have contingency plans built in for sudden personnel changes.

Lower overall costs

Quartz’s analysis suggested that 46% of startups fail because they run out of money. Development is a major component of startup costs, so paying less for it can help your startup succeed. Hiring a development team can, in many cases, save significant costs in development fees compared to hiring an in house team.

Some third party development teams can be quite expensive. A reputable team in Silicon Valley may be more expensive than an in house team, but you will get your money’s worth.

An offshore team, on the other hand, can be much cheaper, because of lower costs of living in their country. But there are potential problems with hiring an offshore team. Language barriers can create communication issues that lead to problems in the development process. Working in different time zones can obstruct the development process. And different cultural norms can make it difficult to align goals.

Many businesses now turn to an alternative option, which is hybrid onshore and offshore teams. These teams have members in multiple countries, and they may all speak English. Because half the team is overseas, total costs can be much lower than with an expensive onshore team. And because half the team is onshore, communication issues are reduced to a minimum.

Conclusion

If you run a startup, and need to build a product fast, consider outsourcing your development. This will likely save costs, prevent hiring problems, get the product to market quicker, and give you more time to focus on the rest of your business.

JetRockets offers onshore experience with offshore costs. Our development team is split between the United States and Russia, bringing overall costs down. And all of our members speak fluent English and have years of experience working together. This allows us to take your vision and communicate it amongst ourselves, aligning our goals with yours.

We allow you to save time on hiring by providing an entire team of vetted developers up front. This frees you up to focus on the rest of your business. Additionally, our large talent pool provides ample access to special expertise. Our hybrid model allows us to offer lower costs than an in house team, while maintaining quality of product.

On the other hand, you could always build your own team. But be aware that this will mean hiring delays, a smaller pool of talent, and potentially later entry to market.

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