Should a Startup Outsource their Software Development?

March 16, 2020 / Bryan Reynolds

Reading Time: 4 minutes

Startups have to be agile and able to handle a multitude of tasks, usually simultaneously. Outsourcing some of these tasks can free up time, allow a startup team to work more efficiently, and help you save money, provided you choose the right components to outsource. Since the savings of time and money can be considerable, outsourcing large projects like software development makes sense for many brands.

How can you tell if working with a dedicated software development company is right for your startup? Consider your current team, your skillset, and the timeline you are working towards to determine if this cost-efficient approach to software development is right for you.

how outsourcing helps

Outsourcing Creates a Level Playing Field

A common misconception is that outsourcing custom software development is just for big startups with large budgets. Outsourcing can benefit a leaner, more streamlined startup by freeing up the time and talent that the founders bring to the table. Since outsourcing allows any brand to access skilled teams, (that they don’t have to hire, train and employ full-time), this process creates a truly level playing field and ensures a new brand can compete in even the most competitive of fields.

A competitive edge is appealing to most startups, particularly those that are in industries that are packed with other contenders, but other factors matter as well. Here’s what to consider when you decide if you should work with a software development company or bring your startup project inhouse:

How Much do Costs Matter?

You may have a generous VC or impressive working capital, but if not, then outsourcing’s lower costs may be very appealing to you. The right software development company can provide you with services that rival or improve upon what an in-house team can provide, but at a much lower cost.

When you have an in-house employee, you pay for their time, whether they are working on your project or not. Once you commit, you need to find them work to do, or risk having salaried employees on hand that are not contributing to the success of the company as much as possible. Employees cost more than just their salary or hourly wage, benefits, insurance, and other perks are needed as well.

When you outsource your startup's software development, the company you work with will handle these tasks – and cope with the legal side of hiring, paying, and managing workers. You’ll also have access to a full team of workers instead of a sole employee. Even the most dedicated employee takes time off, gets sick, or goes on vacation – and your development could stall while that happens. Working with a team ensures your development keeps moving forward.

Easy Scalability

The typical startup moves swiftly and your needs may change rapidly. Scalability is an important factor when it comes to any service or task you are paying someone for – whether you are paying an employee or outsourcing. When you can’t easily scale up or down, you end up paying for more services than you use (or not being able to access needed services because you lack the ability to keep up with demand.

Outsourcing is designed to be scalable, since a software development company needs to be able to meet the needs of brands of all sizes. This allows your brand to access the services it needs, when it needs them, without overpaying or buying more than you need.

In the high-pressure world of the typical competitive startup, agility and scalability are essential for any brand that needs to keep up. Working with a software development brand removes scaling issues from your list of things to worry about and ensures you always have access to the assets.

When you keep things inhouse, and come towards the end of a frantic development cycle, you’ll be left with employees and assets that may not have much left to do. These will be burdensome and difficult to deal with; if you outsource, you simply scale down the project as rapidly as you need to, resulting in streamlined costs and boosted efficiency.

Save Time

You may be able to find money from several sources, but you and your key partners and team members have a limited amount of time available, even if you work on your startup during all your waking hours. Outsourcing frees up not just the time needed to complete a task, but all the time you would otherwise have to spend tracking progress, managing employees, following up on issues running a dedicated inhouse team.

When you outsource, you save time on communication as well — from robust reporting tools that reveal where your project is in real time to working with a single point of contact, you hand over the complex management tasks to someone else. You simply check progress, evaluate results, and enjoy the benefits of “done for you” work.

In many cases, a software development company may have teams working around the clock, with multiple skilled employees working to complete your project 24/7. Most startups just can’t afford that level of intense development work or that timeline.

Whether you need to compete in a field packed with big brands, or you need your startup to run efficiently and with agility, outsourcing your software development can help you focus on all of the key tasks you must do to bring your dream to fruition.

Learn more about using outsourcing to make the most of your startup endeavor and to boost both productivity and efficiency. We have full stack developerss who can help you determine what outsourcing your software could for you and the difference it could make for your brand.