Outsourcing software development: are early-stage startups & software houses a match made in heaven?

The solitude of the long-distance runner

Unless you’re a business-driven programmer, you’ll probably try to look for ways to bring tech competencies on board. One of them is outsourcing software development. That’s a challenge of its own, and if you’re doing it for the first time, you’re probably going through a list of pros and cons of outsourcing. To make it even less sweet, many VCs and angel investors are said to have a preference for the in-house teams when it comes to product strategy.

Opportunities & benefits of outsourcing software development

Building a startup is not a sprint but a marathon. To reach the finish line, you need to exercise your business muscle, distribute the strengths, and balance the weaknesses accordingly. After all, your goal is to build and maintain a stable business with a team of dedicated professionals you can rely on.

One way to get there is to understand the startup lifecycle, the market, the competition, your users’ needs, and, of course, your product features. That’s where a software development company can come in handy.

Product discovery

One of the most challenging experiments for a startup is idea validation. Without a doubt, most founders believe that their business idea would change the world. We’d like to confirm it, but unfortunately, we can’t – at least not in every case. The reality shows that even 42% of startups fail because the market doesn’t need their product.

As much as it’s your role and responsibility to figure out the strategic direction for your startup, an experienced product team can help you clarify the vision and make the product idea more specific. That’s what product design workshops are for. The good news is – a software development company like Merixstudio knows how to organize them and help you validate your idea remotely!

Prototype & idea validation

And speaking of validation, outsourcing software development may prove useful in creating a prototype: a clickable model of the product. In other words, you can hire professionals to test the waters before putting loads of money into coding. Look at it this way; a prototype is one of the most efficient ways to visualize the product, whether you intend to show it to potential users or potential investors.

Sloppy mockup times are long over, so to make prototyping right, you need a blend of creative and business-oriented minds. Today’s prototypes have the potential to give potential users an experience close to that of seeing and using the fully-fledged product. With a high-quality design before their eyes, it’s only once the users try to interact with the prototype in more complex ways that they realize it’s not the finished piece of software yet. A good example is that of the prototype we prepared for our client from the hospitality industry:

Looks like a full-grown website, doesn’t it? And trust us, to some extent, it felt like one, too.

UX & UI design

A fair number of startup founders we work with used to share the conviction that they should have a design in place to start talking to a software house. That’s not true. In fact, it can be a source of unnecessary problems, especially if the design agency hired in the first place doesn’t have extensive experience in creating digital products. Unfortunately, we’ve seen it too many times.

As a founder, you don’t have to bother about the pixel-perfect designs at all. If you’re talking to a software development company, it's their concern to bring UX and UI designers on board and make sure that both the visual and coding specialists understand one another. Of course, that’s not mandatory – but wouldn’t it be nice to have the entire team under one roof?

Efficiency of agile processes & workflow

No matter if you’re a solopreneur or a technical founder with no experience in project management, you probably feel under your skin that software development is a process. As such, it can fall under efficient or inefficient management, depending on your experience and the experience of your product team.

When you’re putting together a team for the first time, you need to prepare the processes from scratch, which requires a lot of negotiations. After all, your specialists may be familiar with different tools and approaches. A software development company, on the other hand, has a set of tested and proven processes in place – well known to all of their employees, also those who would join your project with time.

As a result, tech partners can offer their support in terms of constructive product management and introducing effective processes. If you choose your partner carefully, you’ll be able to deliver the product in a timely manner, even with no previous experience in application delivery.

Strategic capacity for scaling up

Among millions of things you do as a startup founder, you also need to think ahead. What happens when you reach 1000 users or five big clients? These are some of the tough questions you’ll face. Fortunately, you don’t have to prepare a detailed technical plan. Enough if you find out the answer on the strategic level.

A capable software house will anticipate technical problems, assess risks, and help you draft a viable development strategy. They’ll think about your product’s growth as well and advise you on infrastructure and architecture.

Talent capacity under control

With over 40% of employers facing the talent gap, hiring top talents is considered one of the three most time-consuming challenges of early-stage startups. But that’s not the only bump on the way to building a capable team. Employee retention problems, lengthy and expensive recruitment cycles, difficulties in the proper evaluation of technical skills, and then onboarding… These are only some of the roadblocks, and as a startup, you usually have only one chance not to mess it up. You get all of that taken care of by outsourcing software development.

Whether you’re in need of software developers, QA specialists, architects, designers, or DevOps, a software house with a long history of working with early-stage startups will have the right blend of people in place. These experts, if only worked in projects from different verticals, can provide you with usability and tech stack recommendations – especially if you’re a non-technical person. Look at it this way: when you work with a partner who has 150+ experts on board, chances that you’ll find people experienced in solving particular problems are incredibly high compared to a small in-house team.

Scale-up and flexible growth

Surprised how much support you can gain from an outsourced team? Hang on, because it didn’t exhaust the entire spectrum of opportunities. Let’s say that you built the prototype or the MVP, gathered the feedback from the market, maybe even raised some funding. Then it’s time to scale.

We already mentioned that a farsighted startup founder prepares a growth strategy in case of scaling. In contrast to in-house hire, outsourcing software development gives you flexibility, whether you’re scaling up or down. Along with your requirements or budget changes, your team can adapt to the circumstances, remaining your business partner, not an expense on your payroll. The tempo of changes in the outsourced team will save you both the time and money you’d devote to finding talents locally.

What makes a software house a perfect fit for a startup?

All sounds good and promising, but how to choose the right technical partner among all those software houses around? Or maybe they’re all the same?

Well, not exactly. There are a few details that make certain software houses stand out among the competition. Considering outsourcing software development, you might want to get familiar with the most significant ones.

Previous experience working with startups

That one’s obvious, right? You’re a startup, so your partner should be skilled in working with companies on the same lifecycle stage. Enough to say that early-stage startups have different challenges and pains than B2B companies that have been out there for years. Also, today’s applications are different than the ones designed five years ago. What we’re trying to say here is that it all cuts down to having enough clients in a similar position as yours in terms of their market knowledge, business experience, available budget, or technical expertise. You want to compare apples with apples, not oranges, right?

🚀 Keen on building a prototype, a PoC, or an MVP? See how we did that for other early-stage startups!

How to quickly assess which companies to shortlist? Recommendations are the shortest way to do it. You can visit Clutch or other review sites to scan the clients’ opinions and project descriptions. You can also use the old-school approach and call their clients to find out what the cooperation looked like. This way, you might learn more than the written references say.

Top Python & Django Developers according to Clutch (Oct 26, 2020)

All-round expertise and curiosity to learn

When you build a digital product, the cooperation with a software house is more like a partnership than a straight paymaster-contractor relationship. A knowledgeable team will quickly challenge your idea with tens of difficult questions. That’s a good sign. Product development is not a place for comfort and fluff but for edge and anxiety.

Of course, it doesn’t mean that you’ll deal with a bunch of specialists who would look down at you. Quite the opposite. Set your radar to open-minded professionals, curious about your idea and your market, but sensitive to everything that could make your product blunt. The versatile competencies of your outsourcing partner will complement your assessed in-house capabilities. You’ll most likely find the missing competencies among high-tech teams that have already built several startup products such as a Minimum Viable Product or a Proof of Concept for their clients.

Effective processes & efficient workflow

There’s no way to manage a software project (either in-house or remotely) without a nitty-gritty set of tools, procedures, and attitudes than keep everyone informed and engaged. Project communication, embedded in a well-thought project management process, says a lot about how much we work towards shortening the time to market.

If you’re on a time crunch (and as a startup founder, you probably are), ask the software house about their recipe for successful project management. Including a project manager in the team can take the burden of operational work from your shoulders and help you gain time to make product decisions. What can also help is choosing an agile framework that will not hold you down but allow a fair dose of flexibility to start as soon as possible and clarify the unknown on the way.

Key takeaways on outsourcing software development

Building a startup with an in-house team full of skilled professionals is a dream come true for many young entrepreneurs. Still, it’s the most demanding, and the most time-consuming way to go. Chances are that before you put your team to work, your competition will already outpace you.
Outsourcing software development can quickly take you to a place where you’ll be able to raise additional funds, and earn time for long recruitment cycles.

If you decide to start the journey with a versatile team, make sure you learn about their experience with startups, MVPs, and PoCs. Ask for examples, for referrals, talk to their team, meet at a product design workshop. And don’t worry, you’ll be in the good company of big names who started exactly the same way:

• Slack - 401 mln USD in revenue in 2019
• AppSumo - makes more revenue per employee than Apple, Facebook, Google, and Amazon
• GitHub - bought by Microsoft for 7.5 bln USD
• Alibaba - 56 bln USD in revenue in 2019

Have an idea for an app? Reach out to our product team for support and save money, time, and nerves.

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