Why startups should outsource software development services is the big question. A Code Sans report shows that 21% of companies consider hiring the right talent one of the greatest development challenges, with in-house team retention being another one of the common challenges.
Meanwhile, the Boston Consulting Group (BCG) reveals that 73% of developers plan to change their job positions within the next three years. Furthermore, Forbes suggests that 200,000 developer jobs need to be filled by 2030. Developers with the right skills or talent aren’t as available.
Custom software development for startups is critical to avoid a lack of skills, development delays, or limited resources for a company only starting out in the industry. The developer shortage crisis is only one reason to outsource development for startups. Discover other reasons and considerations.
What Makes Startup Software Development Unique?
Startups compete in a dynamic world that relies on early user feedback, rapid prototyping, and an iterative approach using Agile methodologies. Processes aren’t set in stone and software doesn’t have to marry the deeply engrained operations, services, and reputations.
On the contrary, one of the advantages of startups is that development is as rapid, progressive, and evolutionary as the business model or ideas. Decisions are made faster, and software with frequent deployment cycles can evolve with the business from day one.
In-House Team vs. Outsourced Team Key Differences
The outsourcing vs. in-house software development debate is ripe. However, a startup’s growth is at stake. Startup owners must be flexible enough to evolve with an ever-changing market, often requiring an outsourced team from a global talent pool with diverse skills to adapt to market changes.
A client’s in-house team has limited skills, expertise, and experience. Sometimes, the in-house team size can’t handle the capacity required to deliver software projects based on core business strategies. Instead, a diversely skilled outsourced team works exclusively on software projects to meet deadlines.
In some cases, a dedicated team is used in a rapid development process to ensure new products and services hit the market long before competitors in the startup space. Startups have something to prove, and an in-house team, albeit valuable, can’t always meet the demands of growing business needs.
Meanwhile, another major difference is that an in-house development team requires a long-term financial commitment, whereas an outsourcing company pricing model is flexible and typically covers hourly pricing without the need to buy laptops, or office equipment and pay ongoing monthly benefits.
Why Should Startups Outsource Development?
The benefits of outsourcing development to a trusted outsourcing agency exceed simple growth. Other advantages include entrepreneurs hitting the market before competitors and being flexible enough to shapeshift. Still, here are the main benefits of outsourced software development projects for startups:
- Dedicated team focus – A dedicated team focusing on specific needs to develop complex projects has access to more resources compared to the average startup’s internal capabilities.
- Established project management – A project manager oversees the entire project while following tech industry best practices to streamline delivery and customer satisfaction.
- Faster time to market – The right outsourcing partner uses Agile and rapid development cycles to decrease the time to market with team skills covering every development process.
- Lower development costs – Trusted third-party services provide pliable pricing, including the fixed price or time and material model to deliver cost savings to every partner.
- No time-consuming recruitment – Outsourcing development teams have a faster onboarding process to reduce the actual time of interviewing candidates.
- Robust security practices – Established companies providing outsourced teams follow security best practices to provide robust and secure software development services.
- Specific expertise – External expertise in full-stack development or the latest technologies provides the necessary expertise an in-house team might lack.
A recent report shows that startups can cut costs by up to 53% when outsourcing development.
When Do Startups Outsource Software Development?
Startups should consider outsourcing development to validate ideas, attract investment, or leverage temporary team augmentation to access rare technical expertise with a limited budget. Consider outsourcing software development services for the following reasons:
- To support in-house teams with a temporary skills infusion
- To design a new business model or marketing strategy based on requirements
- To establish a feedback loop to validate ideas
- To identify the target audience and study the market
- To complete long-term projects with sensitive data
- To have more control over the project requirements
- To access specialised knowledge from QA engineers and full-stack developers
- To support an existing team with cloud infrastructure deployment
- To protect intellectual property with a formal contract
- To accomplish success with continuous delivery
- To implement the latest technology trends with the top talent
What to Consider Before Outsourcing Software Development
Understanding your digital budget, time zone, cultural fit, and vendor expectations can lead to a healthier, more sustainable relationship. Manage quality, evaluate risks, and invest in the right partner with a few considerations.
Startup owners should consider whether an outsourcing partner meets the following criteria to work with a high-quality, trusted, and reputable partner:
Project Complexity
As the client, we recommend you propose a budget to ensure you won’t spend more money than necessary when you hire our global pool of specialists. Consider the complexity, expected schedules, and cost factors related to the solution before you hire our pre-vetted talent or a project starts.
Technical Expertise
Does the software development outsourcing partner provide the right expertise and technology experience? Clients with startups benefit from a development team with domain expertise, specialised skills, and the technical knowledge to integrate cutting-edge technology for the startup’s tech stack.
Innovation
Putting a startup’s vision to the test requires innovation. Search for a productive team offering a service with vital experts when developing innovative solutions from a highly-complex vision. Innovators target the core objectives of any solution to ensure the scalability of evolutionary products.
Effective Communication Tools
Trusted software development companies use clear communication for successful project management. Effective communication with a software development company enables clients to communicate concerns, discuss long-term goals, and track progress by having easy access to a project manager.
Collaboration
Communication is the stepping stone for effective collaboration. However, what collaboration model or strategy does a vendor use to achieve well-defined, clear requirements? For instance, a trusted vendor communicates on an agreed schedule to discuss requirements, potential risks, and project progress.
Team Size
Determining development team resources or capacity depends on what a project requires. For example, advanced custom software development outsourcing may require a software developer, project manager, artificial intelligence expert, and professionals with experience in specific industries.
Portfolio
An important step in choosing outsourcing vendors is to investigate how responsible they behave with other clients. Review a portfolio showcasing successful collaborations with other clients before choosing someone to help your startup explore the ultimate solution.
Ownership
Detailed agreements to protect the future of your investment should be available to any client. Our reputable software development outsourcing models encourage a client to sign a non-disclosure agreement (NDA) to ensure startup ownership in all software product planning and development.
Agile Development
The main reason companies use an Agile methodology in software development for startups is that a client can launch the product faster. However, the team must also define a detailed project scope that fits the budget, timeline, and expected deliverables of any client.
5 Common Challenges in Software Development Outsourcing for Startups
Challenging tasks and results may originate from outsourcing software development to an agency. However, these threats are more common when you hire talent from an agency with no track record or experience. Discover each risk a client should avoid when developing software for startups.
Misaligned Requirements
Quality is everything, and the key to achieving the best solution is to align requirements with expectations, objectives, and needs. Companies failing to implement requirements engineering in the development process may miss critical requirements to ensure products solve problems and meet goals.
Language Barrier
Startups may have the risk of communication barriers when they hire a development team from a neighboring country, particularly if the country is in a different time zone or doesn’t understand the culture. The outsourcing destination is crucial to project success and clear communication.
Project Control
The right place allows startups full control of the entire project. In most cases, startup owners are too busy to control what happens during software development. However, having more control and some management could progress processes, resulting in solutions that meet your standards.
Poor Code Quality
Custom and complex software development requires clean code, well-defined tasks, and the use of cutting-edge technologies and tools. Project managers manage coding, which is the key to ensuring speed, performance, and risk-free programming. Code quality is a risk with unreliable partners.
Compliance Risk
Not every tech industry vendor follows security best practices to secure sensitive data and meet regulatory compliance standards. Reduce risks by partnering with a trusted software development company with a proven track record. Review business case studies to see whether the company is legit.
Pulsion’s Software Development Services for Startups
Outsource development for startups to our team for scalability, reliable feedback, thorough testing, extensive documentation, and maintenance services. Here are some services to outsource to Pulsion:
MVP Development
Bring a minimum viable product idea to our experts capable of developing a scalable MVP with the right tech stack to remain competitive in the startup world. One of the main reasons companies partner with us is the cost savings from MVP development that allows startups to enter the market early.
Custom Software Development
At Pulsion, custom startup software development differs slightly from regular custom software development, allowing customers to evolve business models and strategies as startups need without worrying about whether potential vendors can keep up with the ever-changing demands.
Mobile App Development
Our engineers code a mobile solution based on a business need, user expectations, and well-defined requirements. Scale the app startup industry and compete against similar products, providing a crucial alternative with unique features and cost-effective functionality.
Proof of Concept Development
Most startups have an idea for creating products or applications that users will love. Our programmers focus on transforming ideas into reality with our proof-of-concept service. Increased productivity is a key advantage customers can leverage in their solutions after the service.
UI/UX Design
Allow our professionals to create the core element of your highly competitive web, mobile, and desktop apps during the course of your early business effort. Decide to pay for the user interface and experience that will scale and soar among core market competitors today.
End-to-End Product Development
We have a proven track record in providing end-to-end solutions for startups, medium-sized enterprises, and larger companies using the latest technology and revolutionary features. Our developers are experienced in back-end, front-end, and full-stack development.
Prototype Development
Complete the ultimate requirements documents for your final product with prototyping, a great option used by startups to gather user feedback on software ideas. Our prototype development aims to deliver what users expect by understanding what users want from new products and businesses.
Quality Assurance Testing
Our QA specialists have a deep understanding of testing and security best practices to deliver software with PCI DSS compliance. Additionally, testing on actual users can streamline the maintenance process to leverage quality assurance and robust security long after the app deploys.
Popular Agile Startup Software Development Methodologies
A recent research article by the University of Arkansas found that various development methodologies were widely implemented in startup development.
The research document outlines Agile as one of the primary models used in the startup development environment. Discover more methodologies that work.
Agile Methodology
As a leading software development outsourcing partner, we recommend Agile methodologies for the most effective startup software development process using iterative processes to meet evolving requirements.
Feature-Driven Development (FDD)
Feature-driven development is a popular Agile framework used when outsourcing software development for startups. The development process focuses on features to streamline business processes or enhance user experience.
The LEAN Approach
Companies outsourcing software development to startups often apply the LEAN model, another Agile framework with short sprints to achieve business goals and complete the project scope. Trusted outsourcing companies often use the Agile models.
Types of Software Development Outsourcing Models for Startups
Different types of outsourcing development models work for a startup’s growth stages.
Outsourcing Destination-Based Models
How a destination-based model works is that startups choose between onshore, nearshore, and offshore outsourcing. Onshore destinations include local UK development companies, while nearshore outsourcing refers to a neighbouring country, and offshore outsourcing describes Indian developers. However, a cultural fit and clear communication are achievable with onshore (local UK) outsourcing.
Relationship-Based Outsourcing Models
A relationship-based model describes the collaborative approach businesses may need. For example, startup owners may select staff augmentation services to infuse internal teams with temporary mastery or outsource to dedicated software development teams for a faster product launch. Alternatively, project-based models are ideal for small solutions with limited budgets.
Contract-Based Outsourcing Models
The main benefit of outsourcing with a contract-based model is that startups can control costs and adjust the budget better. One example of a contract-based outsourcing model is the fixed price option that outlines the price before the project starts. Alternatively, the time and materials outsourcing model may provide cost savings for short-term project management.
Top Benefits of Outsourcing Software Development to Pulsion
As a leading choice among the UK outsourcing partners for startup outsource software development projects, Pulsion paves any benefit businesses need. Our clients and case studies show how we manage outsourced software development projects to drive business growth with a large talent pool.
Learn more about us to see how we can accelerate your time to market, streamline operational efficiency, implement automated testing, and use cutting-edge technologies like machine learning and artificial intelligence. Idea validation was never simpler, even with constantly evolving scope changes.
Custom software development for startups, careful planning, and the right tech stack are what matter. Our expertise in various technologies allows our experts to give startups advice about similar projects. Contact us for a free consultation today to discuss more detail with our developers.
The only reason you need to start your custom software development awaits: outsourcing to a trusted agency that understands your cultural and market needs to complete well-defined projects. Our proven track record and extensive experience from a diverse team of experts are the inspiration you need.
Outsourcing Software Development for Startups Conclusion
Businesses can create something phenomenal from an idea, with a focus on the latest technology from a reliable company. Understanding outsourcing models, challenges, and expert tips is enough to guide startup owners to the right partner.
Sign the contract that protects your intellectual property rights, and start collaborating with an Agile team today. Accelerate time to market with the right tools from the most experienced development team. Contact us to discuss success for all new businesses in all industries.
Outsourcing Development for Startups FAQs
What pricing models does Pulsion offer for startup software development?
At Pulsion, we don’t have hidden costs like administrative costs. Instead, we allow cost optimisation through flexible cost models like time and materials or a fixed price contract. The fixed price model includes hourly rates to reduce costs and the likelihood of higher costs later in the project lifecycle.
An interesting bit of information is that an engineer in Eastern Europe will cost around £50-£100+ per hour while one in Western Europe will cost about £40-£100+. The total cost created would depend primarily on developers’ rates per hour, seniority, infrastructure, and technical skills.
What hiring models are available from Pulsion’s outsourcing model?
Pulsion has various hiring and pricing models to create an affordable and scalable team to support an internal team. We also have a staff augmentation model when customers need limited resources, or we provide a dedicated team for close collaboration. Our programmer range also spans evolutionary skills.
What other benefits exist when outsourcing software development for startups?
Startup customers and larger businesses can transform an idea into products or apps ready for the market. Companies that focus on large-scale development more commonly experience failure.
Instead, outsource software development for startups focused on MVP and iterative development for the following benefits:
- Faster time to market
- Develop with a limited budget
- Access the right skills
- Ensure data privacy
- Leverage enhanced productivity
- Define clear deliverables and scope
How can startups ensure a secure software development company partnership?
Make security and data privacy core business strategies when you outsource development. Sign a non-disclosure agreement (NDA) to protect your data, intellectual property, and vision. Additionally, request a copy of the company best practices to ensure they align with your security protocols.
