Every Startup has to deal with major challenges as it tries to build a successful business in an economy that is fast-paced and fiercely competitive. In fact, statistics show that the majority of Startups fail, many of them in the first year.
Because of this, it’s essential to use of every bit of help available to master the initial challenge of building a novel product, and taking it to market as quickly and effectively as possible.
For products that rely on software, an attractive option is to outsource the development to an outside agency. Several famous and highly successful platforms like Whatsapp and Skype started as outsourced projects.
Nevertheless, the decision to outsource never comes easy, since it involves giving up part of the hands-on control to an outside partner.
Here, we summarize the main advantages of outsourcing software development for Startups, which might help to make this decision easier:
Access to highly trained software specialists
It can be very challenging to find and hire highly specialized developers, and you can lose a lot of time trying to find the right people.
An outsourcing agency gives you immediate access to many expert developers, since hiring and training them is their core business. They can also provide you with a variety of skills and software tools, which are hard to duplicate in-house.
Also, if the software you want to develop is not your core product, developing it in-house would be a distraction for your team, while outsourcing it gives you a chance to focus on your core expertise.
Lower cost compared to in-house development
Reduced cost is often cited as the main advantage of outsourcing. Indeed, by finding the right provider it is possible to save up to 50% in production costs, while still generating a highly valuable product.
But it is important to emphasize that simply choosing the cheapest provider is not a good strategy, since you’ll end up with a low quality product, and lots of bugs to fix.
As with all other services, it’s important to balance cost versus quality when choosing the best outsourcing provider, and a good strategy is to look for one with a proven track record.
The ability to develop a prototype product
The first big hurdle that needs to be taken by any Startup is to get seed investment. However, nowadays it’s very difficult to obtain seed funding based on just an idea, even if it’s a very good one.
That means you have to create a prototype version of your idea, to demonstrate its value and potential for success, which you can then use to convince investors to fund your project.
An outsourcing agency can help you create a prototype at minimal cost, and without having to hire your own developers before you are sure that you’ll get the funding.
Faster delivery and scalability
Speed is critical for Startups, since it’s important to market a novel product before someone else does something similar.
An agency usually has the personnel to start working on a given project immediately, while hiring new staff or training existing staff in a new technology can take months to complete.
Utilizing an agency also offers flexibility, since it is possible to increase team size, or to add new skills to the team, at any point in the project, thereby further enhancing speed of delivery.
This enables a Startup to scale its operations much faster with an outsourcing agency, than scaling in-house.
Outsourcing allows you to focus on marketing
Building a new product that rocks is essential for the success of a Startup, but it’s equally important to market that product as early as possible to the right target market.
By outsourcing your product development (or parts of it), your team is freed up to work on marketing efforts that will generate more sales.
Since many Startups begin with relatively small teams, this offers a big advantage.
The ability to do short-term projects
Some projects are short term, with a well-defined end date. Or they could be small exploratory projects that will only be continued if the result is very interesting.
Projects like these are difficult to manage in-house, since you would have to hire new staff to carry them out, without the certain knowledge that you’ll keep them afterwards.
These one-off projects are ideal candidates for outsourcing to an outside agency.
Taken together, the benefits provided by outsourcing software development offer impressive advantages to any Startup. A Startup needs to focus on its core business, and acquire clients who are willing to pay for that. Anything other than that is better to outsource.
The correct software outsourcing strategy can take a new business a long way towards attracting investors, and ultimately becoming a successful and established company, making it an option well worth considering for any Startup.
If you do decide to outsource your software development, you should take the time to do detailed research on the candidate company(s). Do a thorough background check by talking to previous and current clients, and make sure the vendor consistently delivers top quality.
Remember that if you hire a vendor, you might end up working with them for many years to come. In that case, they’ll actually become your technical partner, which is why it’s important to make sure the fit is good before you commit to them.