Should start-ups outsource software development to scale faster?
Entrepreneurship is not for the faint of heart. A start-up’s success hinges on the hard work of its founders across many aspects of running the business—raising capital, strategy, operations, marketing and more. But what about technical skill?
If your big idea relies on technology to bring it to market, do you need to be able to develop the software or understand the technology behind your product or service?
After all, offshore resourcing is a cost-effective way to access IT talent and with the right processes managing a remote team can prove more effective than coordinating in-house talent.
From my perspective, technical leadership is essential—yet outsourcing to quickly build your technical team (and product) from scratch is a smart move. The solution? You need both.
Control technology decisions and outsource to grow
Good leadership is fundamental to business success. Research involving Australian CEOs found that 25% of business failures were due to a lack of leadership, poor management, and/or no planning.
If your start-up hinges on technology, but you have no technical knowledge—it’s a bad idea to outsource software development from the get-go. The risk to your company is too great to delegate control of key technology, architectural, and infrastructure decisions.
Having a technically-minded person in a position of leadership is wise. I’d recommend that non-technical founders find a technical co-founder and/or Chief Technology Officer (CTO) who can sense-check technology decisions.
If you are technical, or you bring a technical co-founder/CTO on board, outsourcing your development work is not only viable—but desirable.
A well-managed, outsourced team you can depend on—combined with in-house technical leadership—is a highly scalable model. It’s easier to acquire skilled team members from a global talent pool, and there are immense time and cost savings too.
Five ways an outsourced development team fosters start-up growth
Time and money matter to startups. You’re likely in a hurry to prove your concept through a minimal viable product (MVP) that you can use to build a customer base or recurring revenue, or as a means to attract further investment to evolve the product and grow the company.
Typically, you’ll have a finite budget and deadlines to meet as you’re working towards your MVP. Provided you have the technical vision you need, an outsourced team of developers is a great idea for launching your business in this high-pressure scenario.
Here’s five reasons why:
1. Reduced time to ramp up:
Hiring processes create lag. It can take anywhere from 30 to 90 days to hire a mid-level developer in local markets including notice periods. That’s up to three months before you can even begin introductions, share your vision and start creating cohesion.
Outsourcing gives you the luxury of choosing from ready-made teams who’ve already established a rapport and have a proven track record of delivery. Your time to hire is practically instant. Then you only need to worry about aligning the team to your vision.
2. Scale as your needs change:
You won’t have static talent requirements throughout the lifecycle of your start-up. Sometimes you’ll need to build out or pare back your team according to development requirements and cash flow.
A competitive talent market means quickly adding multiple developers is no small feat, and there will also always be some early attrition due to better offers, cultural or vision misalignments. Professional and organised outsourcing providers help you minimise, or mitigate entirely, the impact of any sudden shifts in talent needs or team attrition.
3. Access deeper talent pools:
Finding software developers with the exact skill set to match the technology requirements of your startup is challenging—more so if you restrict your search to your local market. You could be on the hook for training or experience long lead times while developers familiarise themselves with the technologies in use.
A survey of tech leaders conducted by Nielsen on behalf of payment company Stripe found 46 percent said it was difficult to find developers that work on the tech that matters to them.
Outsourcing with an offshore model—through a provider that bears the cost of preparing talent—extends your reach. You can find people that know your technology stack and can hit the ground running.
4. Reduced risk:
In any business, cash flow is king. This is doubly true for start-ups with limited capital and a paper-thin margin for error. Having full-time employees on the books with their own families to feed is an unnecessary risk and source of stress when you’ve just started building your revenue.
Gain or shed resources with greater agility and ride out fluctuations in cash flow by working with an experienced outsourcing company.
5. Benefit from established processes:
If your start-up has no existing software development or delivery processes, initially leaning on an outsourced service provider with established processes will save you time and effort.
Robust processes don’t just happen—they require identifying issues with existing methods and workflows, learning from mistakes, and continually tweaking approaches to embed improvements.
Outsourcing your team through a reliable provider who has honed their processes during many successful software development projects lets you avoid having to experience the risks and setbacks for yourself. That means you can confidently plan and budget your software delivery, manage stakeholder expectations, and minimise the risks that poor processes introduce.
If technology is fundamental to realising your startup idea, and you have capable technical leadership in place, outsourcing software development is an excellent strategy to bring your product or service to market and grow your business.