How to outsource software development for startups?

In the early stages of a company, your most valuable resources are time, money, and mental bandwidth—all of which are in short supply. As a founder, you’re doing a juggling act trying to manage all the different things. You aren’t just managing a product, but constantly sketching new ideas, testing business models, and preparing investor pitches. But to bring this vision to life, you need a functioning product, not just wireframes or landing pages, but a fully functional MVP that real users can interact with.

To make this dream come to life, hiring a full in-house team does seem like the ideal way to go about it, unless it comes to their salaries. Furthermore, the fact that it might take a couple of months to recruit the right people isn’t ideal, and it’s not how most successful startups build anymore.

This is where outsourcing can give you a real edge. Outsourcing software development isn’t necessarily about just cutting costs, but the real benefit derived from outsourcing is the agility. This refers to accessing top-tier talent from across the world without having to incur the overhead associated with a traditional team.

When done right, outsourcing enables you to move faster without incurring massive overheads. You can focus on your core business processes and vision without worrying about software development.

In this guide, we’ll go through how to outsource software development for startups. We will cover the key steps involved in this process, what services you can outsource, common mistakes to avoid while outsourcing, and how to choose the right partner.

Key steps to outsource software development successfully

Outsourcing software development means you’re basically extending your core team, and so it must be treated as such and not like a basic vendor agreement. These steps will help you manage outsourcing and approach it effectively.

1. Define your requirements

The scope and requirements of your project should be stated clearly beforehand so that no issues are faced later on in the project timeline. You should ask yourself the following questions before deciding to partner with an outsourcing partner:

·  What problem is your product solving?

·  What platforms are you targeting?

·  What core features do you want?

·  What’s your available budget?

These questions and some more related ones will help you form a vision and what you desire from your startup. Most good outsourcing partners will help refine this idea.

2. Choose the Right Outsourcing Model

Since each startup is different and is in a different stage of its growth, different startups require different models. Here’s how you can choose the right one according to your needs:

Project-Based Model

This model is usually seen to be desirable for startups that need an MVP or a fixed prototype with clear deliverables. The cost associated with it depends on the project, and there’s no real flexibility once the contract is signed.

Dedicated Team Model

This model is ideal for startups that are in their growth phase. Basically, in this model, you hire a team that works exclusively on your project. This model offers better collaboration, continuity, and control.

 Staff Augmentation

This model is good for those startups that already employ a CTO or senior developer but are looking to expand this capacity. Quality developers can be hired to fill in gaps for the short term.

3. Vetting

No firm likes to talk about its shortcomings, and every firm promises great work, fast delivery, and top-tier developers. However, it isn’t easy to gauge which outsourcing firm is the real deal. Consequently, your job is to look beyond a firm’s pitch and look for the real evidence:

Experience

You should look for whether a firm has worked with startups before. Ask for examples of MVPs, pivoted products, or fast launches.

Client Testimonials

Review platforms like G2, Clutch, or Capterra should be checked for verified reviews. You can also ask for references and speak to past clients if possible.

Communication Style

A proactive team should be chosen whose members often question and report progress. Furthermore, it should be enquired whether they are familiar with communication tools like Slack, Notion, or Jira.

4. Set up Transparent Communication

Poor communication between client and partner is one of the major reasons why outsourcing often fails. Here are some tips to ensure clear and constant communication:

·  Communication tools should be used; Slack is useful for real-time messaging and updates. Tools like Jira or Trello help to keep track of tasks and milestones. Furthermore, weekly or biweekly meetings should be set on Zoom or Google Meet.

·  Someone from your startup should be assigned the project. They should constantly review features, prioritize bugs, and clarify requirements to ensure the project stays on track.

·  Documentation is a vital part of any process, and so tools like Notion, Confluence, or Google Docs should be used to centralize communication, decision logs, and product specifications.

·  The deliverables you require must be set before the project is started and should be tracked through the entirety of the project’s life.

Why Startups Should Consider Outsourcing Software Development?

In the startup world, there’s a belief that to develop a successful product, you have to hire a full in-house development team, and while this might be key to the success of well-funded startups with big money behind them, most startups face the opposite challenge, which is a limited amount of funds. However, this shouldn’t demotivate founders but give them extra incentive to develop a successful product and get it to market before their competition.

Many successful startups, such as Slack and Skype, initially outsourced some or all of their development work in the early days. And this move wasn’t just to cut costs, but it had a strategy behind it.

Here are some reasons why outsourcing software development for startups can be a smart move:

Cost Efficiency

One of the major reasons why firms choose to outsource is because of the high cost in their local region. This is mostly in North American and Eastern European countries, where hiring locally is financially unsustainable for startups. Just one senior developer can cost upwards of $120,000/year.

This incentivizes firms to outsource their work to experienced professionals in regions like Eastern Europe, South Asia, or Latin America. There are several benefits associated with hiring from these areas, which are:

·  You get access to top-tier developers at a substantially lower rate (50-70%).

·  More work can be outsourced and carried out within the same budget.

·  The excess capital can be used up in areas like marketing, user acquisition, and scaling.

Faster time to market

Speed matters a lot in the startup world, whether you’re trying to validate your business model or trying to beat a competitor to market; time is the single most valuable currency.

Searching and assembling an in-house team can take from 2 to 4 months—and that’s being generous. You have to post job listings, review hundreds of resumes, conduct multiple rounds of interviews, onboard the new hire, and wait a decent amount of time before they become fully productive.

Outsourcing saves you time and can give you a fully functional team quickly. They already have teams in place, which can begin work immediately.

Access to Talent

Outsourcing allows startups to gain access to talented and experienced professionals, which, if hired locally, would cost substantially more. Outsourcing gives you global access to a pool of readily available talent, such as:

·  AI/ML Engineers

·  DevOps and cloud infrastructure experts

·  React Native of Flutter mobile app developers

·  UI/UX designers

·  Backend engineers

Outsourcing at a lower cost doesn’t mean you have to compromise on quality. Many outsourcing companies employ senior-level specialists who have worked on global products.

Focus on Core activities.

By outsourcing processes like software development, you can focus on high-leverage tasks, which include talking to users, pitching investors, refining your business model, and shaping the product vision.

Outsourcing allows you to offload the technical processes while still maintaining control over:

·  The product roadmap

·  Strategic decisions

·  Feedback loops and iterations

This separation of concerns allows your internal team to focus on growth, traction, and fundraising for your startup. At the same time, the outsourced team builds and maintains your product in the background.

What can you outsource as a startup? (Services)

Apart from software development, startups can outsource some other parts of their business too, depending on where they are in their life cycle. Here are some other services a startup can outsource:

MVP Development

Some startups may outsource their entire MVP, from wireframes to working prototypes. This is done to launch their product fast and validate their idea before raising funds.

UI/UX Design

A good design and interface can drive user interaction and retention. Full design sprints, user testing, and mobile/web UI design as a service can also be outsourced.

Backend and API Development

Complex and intricate elements like backend architecture, cloud integration, and third-party APIs can be outsourced to experienced engineers.

Mobile App Development

Since mobile apps are complex and time-consuming projects, especially if they’re on multiple platforms, startups often outsource the development of their mobile apps to save both time and budget.

Quality Assurance

Bugs can affect the trust users initially place in an app. QA testing can be outsourced to teams that handle this whole process, including both manual and automated testing, to ensure apps are free of any bugs.

Maintenance and Support

Post-launch support is a crucial part of the development process, and is crucial for retaining users. Outsourcing firms offer 24/7 monitoring, customer support, and future feature updates.

Common mistakes startups make when outsourcing

For all the benefits outsourcing has, these are only when outsourcing is done right. Here are some common startup outsourcing mistakes and how you can avoid them:

• One of the major reasons why startups outsource some services is to save on costs. However, always choosing the cheapest option can lead to problems like low-quality work, poor communication, and missed deadlines. Furthermore, you’ll have to pay more later to fix these problems.
• The concept of “delegate and disappear” is quite prevalent among startup founders. This is a big mistake and can lead to huge problems later on. You should always stay involved and keep yourself in the loop. Feedback is very necessary to achieve what you demand from the outsourcing partner.
• You should lay out a clear roadmap for your product and define your scope earlier, helping your outsourcing partner to deliver better. Even the most basic document showing a clear roadmap can help avoid endless revisions and finger-pointing.
• English proficiency and cultural compatibility should be taken into account before partnering up with an outsourcing partner. If a hired team doesn’t overlap with your working hours or speak business language fluently, you’ll run into delays and problems.
• Legal documents and terms should be agreed upon beforehand, with clear offboarding terms and IP rights. This ensures you maintain full ownership of the work as well as the ability to terminate a contract if it isn’t working out.

Benefits of working with a startup-focused outsourcing company

Some outsourcing companies operate specifically to cater to the needs of rising startups, and hence, they bring certain advantages that normal outsourcing companies don’t. These include:

• Since these companies specialize in the needs of a startup, they understand the startup mindset better. They are better equipped to handle the common challenges startups usually face in the beginning, such as tight deadlines and budgets.
• Startup-focused firms are built to be agile and flexible according to the constantly changing needs and resources of startups. They avoid overengineering, focus on MVPs, and prioritize fast release of products over bloated feature sets.
• Since these firms have worked with startups before, they also bring in insights on elements such as UX, monetization, scalability, and proper execution in the market.
• The flexible engagement models allow startups to start small, employing just a few developers at first, and then scale later. Startup-focused agencies are more flexible than traditional outsourcing partners.
• Communication is very important, and startups thrive on quick decision-making. These outsourcing partners offer better communication channels, constant reports, and keep you in the loop throughout the process.

Why outsource your startup software development to Coding Crafts?

If you’re looking to outsource your startup’s software development and are looking for a firm that has experience as well as the resources to boost the efficiency of your project, Coding Crafts is worth a look. There are several reasons why many early-stage startups choose them:

·  Coding Crafts is tailored for startups. They understand MVPs, pivots, burn rates, and the enormous pressure founders face in the initial stages of a startup.

·  When you outsource to Coding Crafts, they’ll offer dedicated project teams and managers. These include designers, developers, and QA, all under one roof.

·  Coding Crafts will give you a clear timeline of the project’s completion. This includes daily reports, sprint planning, ensuring you’re never left in the dark, and always in the process.

·  You don’t have to commit long-term to gain access to Coding Crafts’ services. You can start small, with an MVP or just UI/UX design, too. If things go well, you can scale up accordingly.

In conclusion, outsourcing software development as a startup doesn’t give you a shortcut to access, but it’s just a strategy. When executed right, it gives you speed, flexibility, and access to a wealth of talent from across the world. But a reliable and quality partner is pivotal to its success; you need a partner who understands what it’s like to build a startup from scratch.

If you’re looking for such a partner who understands the game, consider outsourcing your startup development to a company like Coding Crafts. Their blend of affordability, flexibility, and experience makes them one of the best partners.