One of the greatest challenge entrepreneurs and start-ups face is developing an MVP and deploying it to the market as soon as possible. Depending on where you are and how much funding you may have access to, the development cycle, product quality, and the money spent will vary drastically. There are plenty of opinions arguing for bootstrapping your startup (if you happen to have the necessary skillset), building an in-house team very early on, hiring freelance-developers, and outsourcing your development to software development company.

There seems to be a romanticized view of entrepreneurial spirit that embodies the notion of bootstrapping your startup or raising capital and building an in-house team. While such notions are fine, they do not necessarily reflect on the actual dynamics startups and entrepreneurs face when embarking on a journey – maybe they are not a programmer, perhaps funding is harder to acquire at very early stage, perhaps freelancers haven’t done a good job for them in the past, etc.

In spite of the romanticized view mentioned above, we often encounter startups and entrepreneurs facing the latter dilemma. As a software development company specializing in working with entrepreneurs, we obviously have a bias when speaking about outsourcing your startup idea. However, we want to present some things to consider if your are considering outsourcing or are apprehensive about it.

Things to keep in mind

There is no magical hourly rate

There is a common misconception that outsourcing software development is really cheap and there is one fixed hourly rate. Many in the industry will tell you ‘it depends’ and that really is the real answer. It depends on what sort of project you have, what skillsets are required, and skills & experience of the developer(s) working on the project. Certain skillsets (i.e. programming frameworks) require greater understanding on part of the developer than some other skillsets. Additionally, companies have a mix of new inexperienced developers, intermediate developers, experienced developers, and project managers – that also factors in the cost.

Lastly, low cost developers could mean a low-cost labor market, poor quality work, inexperienced developers, and or a dev mill. Many freelancers are also low cost as well. Price should be a critical factor in determining which company you choose to work with, but it shouldn’t be the primary factor – don’t compromise quality for low price.

Communication is critical

No matter how good the software dev company is, they are not psychics and they won’t act like one either. Communicate often, convey your needs/requirements, ask for consistent feedback throughout the development cycle. If you happen to be working with a great company, then they’ll maintain consistent communication with you and require your feedback.

One major con when outsourcing is the lack of effective communication between the developers and the product owner. Failure of communication can derail the project beyond recovery leaving the entrepreneur with wasted resources and disappointment. One of the quickest way to discovery the reliability the developers are is to maintain high tempo of communication. Sluggish response rate, vague replies, and lack of proactive communication can be an indicator of problems to come.

Effective project management

Whether it’s you, someone from your startup or from the outsourcing company, have a strong link and integrator to bring all of the pieces together. Also, ensure that you aren’t entirely dependent externally regarding the understanding of the technical aspects of your product. Have a third-party source to validate the development. A company with effective project management will maintain consistent communication, implement and update development based on your input, and most importantly, look ahead regarding development outcomes.

There are proactive companies that will provide consistent technical & business feedback & recommendations to ensure that your intermediate and long-term goals can be achieved with dynamic development. By dynamic development, we mean changing the development to suite the needs of your future goals and not just your current requirements.

Difficult to directly manage project

While there are companies that have project management teams interacting with the client remotely or in person. There are many companies that do not. This goes back to communication problems but also entails much more. Apart from providing software development service, if the company isn’t (adequately) equipped for project management, your product may very well face delays, cost overruns, sluggish development cycle, and lack of foresight. Foresight is very critical, not just for the initial development/MVP but also to plan beyond the MVP. If the developers lack foresight, they may not account for future scalability, sound architecture for future upgrades & feature implementation, and perhaps using inappropriate front and especially back-end frameworks.

Transparency

Lack of transparency is another problem that may lead entrepreneurs to shy away from outsourcing. When you lack direct project oversight and perhaps lack the effective knowledge to know how the project is progressing, you don’t know what is being done with your money. Perhaps they are doing their best and on track, perhaps not – software dev is a tricky business full of nebulous problems and unforeseen setbacks. Either ways, you really don’t know what they are doing.

To remedy such a situation, establish an expectation for high-level of communication, require activity reports (weekly or monthly), and establish frequent milestones to accomplish. All this goes back to effective communication and project management – set forth your requirements and expectations. If the company is highly competent and organized, expect them to provide transparency from the very beginning and establishing open communication.

Due Diligence

Search everywhere, not just freelance portals such as oDesk. Ask people within your network, search online, look for companies that have experience working with startups and entrepreneurs – they understand the plight of an entrepreneur better than others.

We consider these to be some of the primary factors for entrepreneurs and businesses to consider when they are choosing and outsourcing contractor. Of course, there are other factors as well, but from our extensive experience, these remain by and large the determining factors for successful project.

Any questions, concerns, advice, or in need of advice? Email us at info@plenartech.com