WHY STARTUPS SHOULD CONSIDER OUTSOURCING DEVELOPMENT

Sep 8, 2017
written by Victoria Topalo

Startups are revolutionizing nearly every segment of the US and world economies. The overall health of the business environment for private companies improves with every year, as Bloomberg U.S. Startups Barometer shows. There’s never been a better time for launching a startup.  

If you happen to be a startup founder, you are familiar with many the ups and downs imposed by limited time and budget. These are especially true for early phases, when you want to test your ideas by creating a prototype or minimum viable product (MVP) and woo investors or customers. With that in mind, you might find yourself struggling to choose between hiring tech talent in-house or outsourcing the development process.

In this piece, we’ll show you why you should seriously consider the second option for your startup.

Reason 1.
Better Price

Obviously, good technical talent is expensive. According to Payscale.com, the average pay for an experienced web developer is $69,193 per year.

Source: PayScale. Experienced web developer salary

When you hire in-house technical talent, apart from a competitive salary and recruiting costs, you may also need to cover employees’ medical insurance, dental, 401K plans, and more.

Of course, if your business model leans heavily on technology, you’ll have to hire a CTO internally at the bare minimum. But in general, it’s more affordable to hire an external high-level tech team and pay solely for the actual development time (If you’re curious as to our rates, contact us here).

 

Reason 2.
Faster Hiring

It can take quite a long to hire premium talent, which can delay time to market. A study led by Dr. Andrew Chamberlain, the Chief Economist at the career site Glassdoor, illustrates the variety of hiring times within the tech industry. The table below shows job interview durations for some tech-related job titles according to Glassdoor data.

 

 

Source: Research report. Why is hiring taking longer? New insights from Glassdoor Data

After the hiring process, you’ll need some time to test the skills of hired staff and set up effective teams. Not to mention, there’s always the possibility of employees leaving, which can lead to falling into new recruiting cycle again.

While finding a web agency isn’t a quick job either, when you’re done you’ll have an experienced product manager, CTO, a business head and a few skillful developers. With this kind of professional leadership and the technical team, you’ll have a better chance to bring the product to market faster.

 

Reason 3.
Better Expertise
& Reliability

Quality developers are scarce. Finding top talent is difficult—larger enterprises can afford first picks. So, finding the right candidates and eliminating those whose only expertise is self-promotion is often a challenge.
Most agencies and software houses employ good talent that works on multiple projects. They simply can’t afford to hire poor tech talent because these people are on a core of their business model.

Selecting a good development partner and establishing a good relationship is critical. Often, a product delivery takes more time than expected, so you’ll need a reliable partner for a long run and you’ll need to be comfortable with the dev team. Since agencies are interested in long lasting partnerships, they’re usually ready to continue collaborating for next phases of your product and to cover your technical necessities.

Having successfully collaborated with many startups, we’ve come to understand their needs and priorities. That said, you can always rely on our advice, so don’t be shy to ask.

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