How to successfully outsource startup software development?
It’s not unheard of to learn about new startups popping up like popcorn in a microwave. With so many being conceived every day, the fast pace at which they need to pick up speed, and the massive levels of competition the world of IT has to offer, for startups, everything is turned up to the highest gear and every decision is critical.
Startups thrive on fast decisions that are centered around core business operations, so yeah, you can say it’s a pretty tense, intense, adrenaline-inducing, and quick-on-your-feet environment. Phew, we got a little tongue-tied there but alas, that’s the startup way of life.
For startups, no detail is too small and no decision is too trivial. It all matters, and most importantly, it all adds up to the well-being and future success of the company, so it’s critical for founders and stakeholders to stay centered on strategic tasks. With lots of ground to cover and things to care for, it can be quite easy to fall down a rabbit hole and get lost in the little things about the business, but you have to remember that time is of the essence and there’s no minute left to spare.
Now, for an even greater reality check, most startups start with a tight, limited budget. Not only that, they’re painfully under-staffed yet dreaming about business expansion.
If we’re doing a modestly good job, by now you already know that getting a startup company up and running is tough as nails, which is why most startup companies decide to outsource specific areas of their work to outside organizations or freelancers.
In this article, we’re going to dive a little deeper into the challenging world of outsourcing startup development and show why finding a reliable startup tech partner is not only important but vital for any project success. Let’s get rolling!
Outsourcing vs inhouse development for startups
Ah, the age-old question (okay, not that old, but at least a few decades old). Should you outsource startup software development or develop in-house? While the decision is not as clear-cut as we’d like, it all boils down to the unique needs of your business model.
When talking about startup companies and their unique set of challenges, it’s almost a given that outsourcing is the most cost-effective, time-effective, and quality-driven decision your startup can make. Why? Well, hiring in-house development teams is expensive. Oh, so terribly expensive. And it’s a luxury that many startup companies simply can’t afford. Plus, there’s no real guarantee that you’re hiring the best talent because well, not all talent can be in-house. Talent is everywhere, so why limit your startup to geographic constraints?
Most startups outsource software development to carry out development work without the headaches of benefits packages, onboarding, training, and other costly, time-consuming areas that are already taken care of by an experienced outsourcing company.
Main software outsourcing models
With so many outsourcing companies out there, there are some commonalities that ring true for most of them. There are three main software outsourcing models:
- Team-based or Managed Team model
- Project-based model
- Staff augmentation model
Let’s dissect each one.
Team-based or Managed Team model
The right team of individuals is what makes or breaks a great project, so startup companies need to carefully assess who they onboard to their endeavors to ensure those first few months of existence are maximized with the best talent.
In the teams-based model, startup companies would typically choose specific professionals to build a team so they handle the bulk of your project work, which is easier said than done. One of the key differentiators of this model is the ability to have a dedicated team working exclusively for your project, which some consider an extension of your in-house team.
- Tighter collaboration and strong ties with the team, making it a trusting environment where you can delegate important tasks based on your startup needs.
- Easy communication between your tight-knit team and the outsourced team, fostering innovation and improvement.
- Reliable work deliverables with highly-skilled professionals who know what they’re doing and have enough experience to back their skills.
- Because the team is already highly skilled, the ramp-up is virtually non-existing with no time needed for knowledge transfer.
- Given the involvement the team needs to achieve in your project, this model is not well-suited for short-term projects.
- You have to somewhat blindly trust that the outsourcing company will put together the right team of individuals for your startup needs.
One thing to keep in mind is that the team-based model is different from the staff augmentation model because the outsourcing company is committed to an outcome, not hours of work.
Think of it as a turnkey project where you essentially hand over full control over the technical process of the development of your project to the outsourcing company. The responsibility is fully on their court, which includes managing teams, gathering requirements, developing the project work, being accountable for failures and risks, and delivering a fully-finished product.
Oftentimes, startup companies favor this model if there’s no real in-house team to work with and there’s no true knowledge of a particular IT tool. It’s also a good option for teams who are swamped with other projects and there is currently no option to open up recruitment.
- Minimal involvement from your side; the outsourcing company takes care of everything and you only focus on the strategic tasks of your startup.
- The deliverables are agreed-upon upfront so you have a clear idea of what will be handed to you and under which specific time frame.
- All the accountability lies in the hands of the outsourcing company. Under this model, you only have to wait for the fully-realized product to be handed to you so you don’t have to worry about the risks of failures involved in building it.
- Virtually zero control over the business process carried out to create your product.
- Team members working on your product have no direct communication channel with you, which creates significant communication and collaboration gaps.
Staff Augmentation model
Is your current project lacking enough resources with the adequate skills to get the job done? Then the staff augmentation model is for you. If you prefer to own the end-to-end pipeline of your project development, the staff augmentation model gives you the largest surface area to control and have the most responsibility for your deliverables. Think of staff augmentation as scaling your team by hiring extra elements to develop projects based on your needs.
- It’s cheaper to extend your team with outsourced resources than to expand your in-house team.
- You’re in the driver’s seat and get to choose how many and which talents to hire. This model is far more flexible in letting you choose who you want to join your team.
- You can add or remove resources to meet your changing business needs.
- This type of model works very well for both short-term and long-term projects.
- Because much of the control lies in your hands, the outsourcing company doesn’t have as much accountability for project failures or risks.
- It can be challenging to maintain communication with the extended team and have them feel as an extension of your team.
- You need to allocate a specific amount of time to train the professionals you add to your team.
- There is a stronger dependency on internal processes than with the other two models.
How to start your outsourcing startup journey
Regardless of the model that suits your needs best, there are some common-ground advantages to outsource startup software development:
- Zero recruitment risks.
- Quality resources that are highly skilled in specialized engineering fields.
- Cost efficiency with lower staffing and HR costs, lower operational costs, and lower outsourcing startup development costs.
- Flexibility to add or remove to your project as needed.
When building a business case to outsource some or most of your development projects, it’s important to consider the parameters that matter to you most so you choose the right outsourcing company. To get started, we recommend that you prepare answers to the following questions and that you ask :
- How flexible are my project requirements?
- How many specialized skills does my project need?
- How much time and budget do I have for this project?
- How involved do I want to be in the project?
And these are some questions that you can ask outsourcing providers to get a better sense of what they’re offering:
- The types of outsourcing models do they offer?
- Price points for each of the outsourcing models?
- What options do they offer for different levels of client involvement?
- What type of clients have the provider worked with and are there client testimonials?
- How does the outsourcing company validate and build skilled teams of experts?
- What is the culture of the outsourcing provider?
By answering and getting answers to these questions, you’ll have a stronger sense of what your startup needs and what providers are ready to offer to make your projects a success. If we’re talking about specific parameters that you should be mindful of when deciding between software development companies for startups, here are some of the most prominent criteria to assess:
- Portfolio of clients
- Experience with small, medium, and enterprise projects
- Online reviews
- Employee happiness
- Project confidentiality
- Mastered technologies and skills
- Service Level Agreements
- Communication channels
- Time management guidelines
- Compliance with regulatory policies
- The culture of the company
Svitla Systems as one of the best software development companies for startups
Much more than a startup outsourcing company, Svitla Systems genuinely cares about what’s best for a project and the individual working on a project. Our unique style of work has garnered us great attention, especially for our advocacy for a truly balanced lifestyle between work and personal time because, well, we’re not machines. We’re human first, and we care about doing our best by being our best.
With no geographic barriers to prevent Svitla from hiring top-tier talent, the team of professionals that we boast is scattered all over the world, across different time zones, and working in different languages, truly giving our clients unlimited support 24/7/365.
For years, we’ve made it clear that our business model is to create mutually beneficial business relationships where we can see projects grow and evolve, much like our professional team of resources who are always in search of the next big project to work on with the same excitement as day 1.
With an unrivaled breadth of technologies mastered by our professionals and skilled engineers, there’s no limit to the types of projects we’ve worked with and can work with. Our collaboration models are designed in such a way that it’s a no-brainer for clients to choose our solutions, making them easy, simple, and headache-free. But most importantly, effective and value-driven. For this reason, many of our biggest clients have collaborated with us for many years, making our relationships long-term, stable, and reliable.
Startup companies are all about scaling as fast as possible with limited resources. When building software, there’s so much ground to cover that it’s virtually impossible for a startup to get it all done in-house, and it’s no wonder that many turn to outsourcing as a solution to their challenges.
Hiring an outsourcing company is almost like an art form. You need to carefully evaluate what each provider offers and how their business model adds value to your startup company. As your business grows, find a startup tech partner that knows how to grow with you.
Over the years, Svitla Systems has cemented its place in the world of outsourcing providers in Eastern Europe, trailblazing the way for many others that have come after us. Given our proven portfolio of successful projects, the long-term relationships that we’ve built and nurtured with our clients and partners, and the agility, flexibility, and high-tech nature of our talented professionals, we are poised as a reliable tech partner for startup for the next big wave of software projects that will call for more sophisticated and advanced technological approaches to engineering future solutions.
If you’re a startup and are looking for the right outsourcing provider, partner with us where we’ll make it our goal to find solutions and not obstacles to your projects.
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