Does Your Startup Really Need In-house Development?

Once a startup decides to build a product, they can ask an remote development team to make a prototype for them to test the general appearance and “feel” of the product. After that startups usually test and evaluate the idea. But is remote development something that a startup can stick to on a regular basis?

Not outsourced but remote

The first mistake is to take your remote team as outsourced. Just think, once you hire a remote development team you don’t get things done for you, but you integrate your new employees into your existing team to achieve the common goal. Here’s the difference.

The right thing is not to think of your remote team members as outsourcing.

A lot has been already said on hiring remote developers, but outsourcing for startups is a very special issue. They offer innovative solutions, don’t have their customers’ audience yet and are very dependant on investors’ money. So a special approach to hiring a remote software development team is a must.

Individual approach to select each candidate

We insist you don’t create any general RFP and send them to numerous companies. After that you’ll get tonnes of proposals that are hard to choose from. Instead, try selecting and hiring individually. Take active part in the interviews, ask not only position-related questions but try to learn more info on individual aspects of the candidate. Try to find out if that will be a match to your team and make sure you feel convenient to communicate with the person.

You can find more on this point from our previous research here.

Share your company’s goals, interact with team more often

This works not only in case of startups. But for such companies close communication, goal sharing and deep integration is a must. the problem is that when people create something innovative they need to be located close to each other to share opinions and ideas for development. But it’s impossible for a remote team. So you should do your best to arrange regular status calls, practice google docs sharing, implement project management systems etc.

Don’t focus on costs

Repeat actions make perfection. There has been a countless number of times we argue the same: don’t put costs’ cutting as a top priority for you to outsource. But again: it matters.

Getting a quick prototype at $10/h is okay, but there’s always smth you pay for. When you decide to trust your future product and destiny of your startup to a remote development team you shouldn’t concentrate on their rates.

You can and you will cut your costs. But when it becomes your priority, there’s a risk to hire a substandard team being in a mess.

Finally, there are some positive examples of startups that managed to grow into successful companies like Skype, who maintained remote developers in Estonia, BaseCamp and Github, who also hired remote teams and up-to-date they do deliver progressive solutions to clients form the whole world.

Just let’s compare these 2 cases:

I. You hire a remote highly-skilled developer at $30 rate from Ukraine to work for you full-time and sign up a 1-year contract with him. You personally interviewed him, contact his referees and evaluated his test task. He is supposed to closely communicate close with the rest of the team during the whole project.

Is it outsourcing? – Not sure.

II. You hire a development company somewhere in India to work on your project with the fixed rate of $30 hourly and completely trust them implementation of your project. You have no idea who’ll be developing it, you don’t run the interview and selection of candidates and they don’t work for you directly.

Is it outsourcing? – Definitely.

The second option can be dangerous for your startup since you have no control over what’s being developing. So before making a decision, ask yourself:

Would you like to hire remote developers or you would like to outsource?

Why startups?

Outsourcing can help a start-up in a variety of ways. While each outsourcing strategy is different, the outcome is contingent on a few factors.

What is startup about?

Technology-oriented startups usually have more potential to outsource since there’s no need to be close to your consumer. Development can be done behind your customers’ eyes, meanwhile marketing research and sales can remain in-house.

Your provider

It’s vital that your provider is experienced enough to work with technologies your project requires. Another aspect is communication. Make sure you can expect regular updates and clear communication, then such collaboration may last for a long time.

Technology aspect

Check if your startup has someone who handles all technical issues and is able to monitor development process. More often than not a startup is a small cooperation of masterminds who are not always tech gurus and need support from development side. That’s why, by the way, a lot of Silicon Valley-based startups have either Ukrainian roots or acquire remote development teams located there.

So if a startup has a reliable technical background and chooses appropriate outsourcing vendor then it will definitely scale in short terms, release faster and save costs.

Focus on marketing

Your startup has to bring customers to the doors. If not – it’s a fail. Your customers are the first you should care about. Especially when you run a startup. No one but you, the initiator can present your product the best in the most favourable light. So when a CEO has to care a lot about the coding and is up to his ears in development, then who’ll be out to “manage” the customers?

What’s with investors?

An open secret is that decision makers in startups are investors. So first of all think of the advantages you will describe offering them hiring a remote team. They will probably give you a go-ahead if you mention positive results you can achieve like costs cutting, ability to hire relevant specialist you fail to find in-house.

Faster product release

Your investors would definitely love it! This is the most desired point every startuper aims at. That works really simple: you save both time and money by hiring a remote team. Because you save money you are not to wait for further funding and the chances are pretty high that you can release your product to the market faster and ROI won’t be long in coming.

So these are the most common factors you should consider and not forget to precisely choose your provider. Not only by company, but also by country. And of course be sure that you’ll be able to provide the workload for full-time remote employees.

Which functions are the best for startup to outsource?

When you develop a produсt it’s essential that all R&D is located at the customer’s side. So putting your market …. far away may prevent you from building innovative product that would fit the market needs.

First, decide which functions are core for your business and what your management is the most competent at. For example if you have strong software engineers on board you can attract QA specialists or any other ancillary development staff. Oppositely, hire external sales/marketing if you feel that your team lacks such specialists.

How to avoid the risks?

Any business has to be ready to take up the risk. When you decide to outsource you should also do your best to think of the following issues:

Startups have plenty of things to outsource be it strategy, software development, design, content marketing or any help related to presence on social media channels and assistance with PR.

Most risks are common not only for startups. But taking to account that startups grow innovative solutions, the first thing to do is to check the data protection by signing NDAs, check references and trust your project only to a reliable partner with experience.

Another issue we’ve already discussed is that once a startup has signed up a contract with outsourcing company (at least for 6 months), their teams very often slacken because owners didn’t plan the workload for this period. But when you run a startup it’s impossible to plan anything.

We recommend that in order to eliminate risks you should try hybrid model (remote+in-house). Keep your core competences in-house and outsource only to trusted partners.

Why agencies?

Well, commercially-free: startups need agencies. Why? From our experience big companies know better how much work and development they need. Oppositely, startupers very often can’t define the workload. That’s why they can sign a contract with outsourcing provider and then struggle paying off all the idle hours just because they have no idea what to develop next.

But an undisputed fact is that startups need enthusiasts passionate about the projects they work at.

Recruiting the best is like fishing – you need to go where the fish is.

Remember, if by outsourcing you mean “throwing tasks over the wall” then it won’t go for core development. Your success story with remote development depends on three “hows”: how you take it, how you treat your team and how you choose the provider. For us it’s hard to impact the first two options, but we can gain responsibility for the last.

If you don’t have funds to pay for full time, then having a reliable outsourcing agency that’s ready to provide staff when you need it – is really the way out!

Let’s discuss in detail?