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The Case For Software Development Agency: A Quick Guide To Help You Decide Whether In-House Or Outsourced Development Is Best For You

We have all heard about those inspirational and fantastical startup stories – Had a garage, the greatest and most innovative minds came together, worked day in and day out and hacked their way into launching a product that took the world by storm and blew everyone’s mind. We all love these stories and they are a good source of motivation and inspiration in this ever-expanding technology landscape. However, that’s about it. In reality, such fairy tales happen so seldom that you probably have a higher chance of winning a million-dollar lottery than being the central part of such a tale.

Why do startups fail? If you look at research on why startups don’t make it, the wrong team is among the top reasons.

why-startups-fail

Having the right team is right up there.

However, that is the most difficult part. Procuring a team to help you build a product exactly as you envision is challenging and an arduously slow process. Practically speaking, the competition for good developers is cutthroat and there is a massive shortage of talent. Shortage of talent makes it harder to attract great programmers. They are in high demand and they want to work only on projects that they deem to be “cool”. If you want to get the crème de la crème working with you for your startup, you imperatively need to have an exciting product and the ‘next big thing’.

Before moving forward, I would like to state that “Of course, if you can manage to find the perfect team for yourself, go with it.” But if you are not really backed by Top VCs or an influencer yet who can attract good people to join in because they would believe in you, this is exactly where a good software development agency’s role comes in.

 

HOW A GOOD SOFTWARE AGENCY CAN HELP YOUR STARTUP?

As the founder of ProofPilot, one of our many clients, Matthew Amsden quoted after his experience “I do not have co-founders and co-founders are hard to find. No one wants to join when there is no traction with your ideas. It is just so hard to convince people when they have a 2X opportunity in hand.” And this was a problem Matt was facing even after securing 2 million USD in funding.

Matt found Mindbowser through a reference in 2018 and since then Mindbowser has been able to take care of everything for Matt, setting up a dedicated team for him. Today, ProofPilot is transforming the clinical research world and counting Google and Harvard as its customers.

Similarly, we have helped numerous startups get real traction on their ideas. Our customers today are funded by the likes of Chan Zuckerberg initiative, Simons Foundation, The Carson family charitable trust, and many more. In my honest opinion, in this modern global and highly connected world we live in, it is totally worth it to use an evolved and experienced agency to take your startup from the point A which constitutes planning and building to point B that is success and traction.

It goes without saying that Cost savings are on the cards when one engages with an agency. The cost of an employee is on average 2X of the salary paid creating an even larger saving if you can get a similar work done with an agency. Ofcourse, cheapest may not be the best. A startup founder should adopt the idea of doing things well rather than doing things cheaply. There is a big difference between a 1000$ vs a 10000$ service.

Here are some more reasons to consider when making the decision to outsource your project:

  • Accessible Expertise

The outsourced agency has accessible technical expertise to help you with your idea and its completion. Most of the time this competence is better than the ones you might be able to accumulate during the early stage of your startup. Effectively tasks are completed faster and with better quality with a better team at hand.

  • Guarantee Of Best Practices

Collaborating with an agency guarantees that the best practices and their evolved process can help shape the product better. At Mindbowser, our Design Sprint process helps identify magic beans- features that delight the users. Inputs from other experts can be valuable to add creative features that you may have never thought of.

  • Plug And Play

Not all the technical expertise that is needed for a project is required on day one of the collaboration. This means you can use the service to your advantage, paying only when you use. Infact, many times smaller roles or work like a quick UI ask or a Devops consultation may just come in complementary, which may otherwise become a big task in isolation.

  • Use the greater firepower

Just a few days back a customer asked me that apart from our technical prowess, they also want to engage to learn about influencer marketing and content strategy from us. This immediately gave me a thought about how we can help our customers in various ways.

Many of the agencies, including Mindbowser, have built their own channels and follower base over the years. Mindbowser has 2 publications theiotmagazine.com and chatbotsjournal.com. We also are a part of StartupGrind Network. Through such channels, an agency can help in providing greater reach and even aid other areas of the customer’s journey with their resources.

  • A Partner To Bounce Ideas With

An expert opinion is invaluable in the decision making process for any startup. Especially if founders or CXOs of an agency are involved in working alongside you, working with an agency practically guarantees an educated second opinion on all your technology decisions. Such discussions may also become a vanguard of ideas for feature sets that you may like to include in your product.

  • Time To Market

Working with an agency significantly lowers your time-to-market. With a fully set up team available right from day one, you save invaluable time in recruitment and management. This adds up to allow time and money available for more number of iterations when you search for product market fit. Like David Rusenko, Founder of Weebly has pointed out- It takes upto 10+ iterations to find what your customers really want.

  • Diverse Teams

Diversity sparks innovation. Mature agencies also bring in diversity and opinions to the table that helps spark innovation which is possible with diverse experiences and backgrounds. Additionally, you may get help from subject matter experts on board with the agency.

  • Focus

Letting your software partner handle development allows you to focus on the other important aspects of your business at the particular stage – strategy, networking and launch plan. With a reliable agency, you have one less headache to take.

 

HOW TO DECIDE BETWEEN OUTSOURCING AND HAVING AN IN-HOUSE TEAM?

On the other hand, if technology is an enabler of services and conveniences like building a cab service like Uber or a food delivery service, using a software development agency seems more feasible and cost-effective.

Of course, if you can manage to find the perfect team for yourself, go with it. No doubt, an in-house team has great advantages. Also the decision between to outsource or to do in-house may all depend on the kind of startup you are building. Are you offering a complex consumer product like an antivirus or probably a VPN where technology innovation is happening? For such cases, you definitely need to have an in-house team to look after development and R&D.

If you’re somewhere in between these two extremes, consider asking yourself questions such as:

You can make a decision based on your situation. You may even carry out some development in-house and outsource some requirements to agencies with specific expertise.

  • Can I attract good tech folks to work with me
  • Can I stay invested in technology work day to day- If not
  • Do I have an in-house CTO who can be a hustler and also be able to keep things in order
  • Is the solution to the problem you are solving available or your solution will be an invention

Here is a quick flowchart to help you decide:

Not all roles in your organization may be suitable for outsourcing, and not all roles need to be full-time in-house hires either. As management expert Peter Drucker has more than often pointed out, keeping in-house experts around for the few times you need them is too costly and entirely unnecessary. On the other hand, outsourcing without thinking could be problematic as well. Evaluate your needs thoroughly, as the requirements themselves will answer your needs.

HOW TO WORK WITH YOUR TEAM WITHOUT SINKING YOUR SHIP?

Once you’ve chosen to partner with an agency for your software needs, there are things you can do to ensure that you get the best out of this relationship and make the relationship really work for you. Managing a few variables and details can help determine the success of an outsourced project. The following are some points to help you during your partnership with your agency-

  • Embrace it

Once you have done the due diligence and decided to get started with your partner, trust your decision and your partner to build the best possible solution for you. Doing so will help you stay stress-free and focus on the business aspect of your endeavour.

  • Clear communication

Communicate your doubts and queries to ensure that your software is being built the way you intend it to. If you are not satisfied with something, state it clearly. If you liked something, appreciate it. If you did not liked something, clearly share what should have been done and get it within plan for next.

  • Follow the process

Follow the processes and other protocols your partner follows for maximum co-operation and synchronization. There are chances that your dev partner has a process that has evolved from its own set of hits and misses. There is no reason to reinvent the wheel. Being on the same page as your partner is invaluable.

  • Incentivize

Incentivize your developers regularly to ensure that they are content and thus can give their best. You can build a bonus plan attached with performance rewarding the partner when they have gone over and above the expected. We recommend defining Key performance indicators (KPIs) as part of the contract and creating a risk and reward plan around it.

  • Build a rapport with the project manager

Most outsourcing projects are led by a project manager who is the bridge between you and the team. Build a rapport with the project manager to elaborate on your vision and help them understand your requirements. Maintaining a healthy relationship with your project manager is always a good thing.

  • Meet the team in person

Meeting the team personally can make the entire process feel more like a collaboration than just a business deal. Fly out to meet your developers when there is a possibility. Our Wired In India Programme outlines a complete work guide that you can follow when you plan to spend a week with your team.

  • Be involved

Good output is a combination of everyone’s work. Outsourcing would still require you as the captain of the ship setting the course of sail, deciding between what to do and what not and so on.

In Conclusion, There are various advantages that your startup can achieve by outsourcing. However, it is important to choose what’s right for you and what fits your requirements. Choosing an agency that not only gets the job done but also understands your business and keeps the business interests at the forefront of every decision will ensure the best possible chance at success. Outsourcing or global sourcing is a very powerful tool to leverage talent, improve productivity and reduce work cycles. Use it to your advantage.

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Ayush Jain

CEO and Founder of Mindbowser, Chapter Director of StartupGrind Pune

Ayush is the CEO of Mindbowser Global Inc, a top-notch agency providing software development services to renowned companies like Dell, Pepsi as well as to a lot of growing startups. Ayush is also the director of the StartupGrind community and editor of The IoT Magazine and Chatbots Journal. Ayush serves on the board of several startups and is a seed investor.