When you decide to start your own business, it may be difficult to say whether it is more exciting or scary. There are many things to consider, many decisions to make – and you haven’t even started building your product yet! If you are still struggling with the decision whether it’s better to build your own team or to start working on your product right away, you may be interested in 6 reasons to choose outsourcing when you start a startup.
If you made a decision to outsource some tasks to a software house instead of hiring your own team, you’ve probably also got to the point where you realize that choosing the right company for your startup is not an easy choice. The number of outsourcing companies in IT is huge: in 2014, the IT outsourcing market was worth $104,6B
When you do your research, you will easily notice that the offers are very different from each other: outsourcing companies work differently, they use different technologies, they have a wide range of prices.
If you feel a bit confused with all the information you receive and you don’t really know what you should focus on to choose the best outsourcing company for your startup, keep reading.
1. Pay attention to how they work
A good outsourcing company should not only write good quality code, but also understand your business needs. In order to deliver software that brings profit, they should provide you with unique talents, a plan how to spend your money effectively, without needless expenses, and deliver the product on time.
A good example of the right approach is the lean approach. Its most important rule is that you improve on your value proposition and not on the way you build your final product. This means that instead of committing time, money, and effort to creating a complex product based on your vision, you create the minimum viable product (MVP) and develop it according to the needs and suggestions of its users. To learn more about the lean approach for startup development, read Lean Startups by example by Mateusz Kurleto.
It’s very important because the sooner you get the tracking, the sooner you get positive cash flow. If the IT outsourcing company understands this approach, it will help you build the MVP effectively, making time-to-market as short as possible. If the company is proud of its experience in startup development, let them display their approach and see if this is the thing you are looking for.
2. … and how you work with them
It is also important to check the framework for managing product development of the company you plan to work with. Keywords to remember: Agile and SCRUM.
The methodology of work in the IT outsourcing company should combine the flexibility of the project with the best habits of software engineering. You need to find out whether you will have insight into the whole process of building and developing your product and how big your impact will be. When the company subsumes you under the process of software development by assigning you to a role of a Product Owner and defining your responsibilities in this role, you are a member of the team. This gives you all the control that you need: you can see progress and intervene if something isn’t going as planned. It is also important to ask how soon you can expect to see progress – if the company is working in sprints (or iterations), you should expect to see a new working version of a product after each one and the changes implemented in one sprint must be functional, clear and visible for the users.
3. Consider the product you will get
The advantage of a good outsourcing company over the bad one is the quality of the delivered product. They achieve it through the whole development process, including choosing the right tools, using continuous integration and continuous deployment (CI/CD), automated testing, setting high code quality requirements – and so on. And it is probably the most important thing to check when choosing an IT outsourcing company. Let me explain why.
Starting your startup with the help of an outsourcing company doesn’t mean that you will always want to work with them. At some point, you may decide that it’s better to hire your own team. It will be important for them to get a clear and good quality code that will be easy to understand and to develop further. If it’s of bad quality, the new team will spend a lot of time to get into it and may not be successful – in the worst scenario, the team may have to rewrite the code from the very beginning! It is a good idea to ask a few outsourcing companies that you are considering to give you some code samples so that you can check if the quality is satisfying.
4. Calculate the final cost
Company A sets $30 for a man-hour while company B sets $80. It is almost three times as much as company A! Which company do you choose?
If you started your research on IT outsourcing companies, you’ve probably noticed that the range of their prices for a man-hour is huge. It depends on the location (some regions are cheaper than the others), experience, the methodology of work, technology stack and many other factors. Is that possible that company B is, in fact, cheaper than company A? It surely is, because when you calculate the final cost of hiring a remote team of developers, you need to consider both: price for the man-hour and estimated time-to-market.
Let’s look closer on our two companies: company A estimates time-to-market for your product for 8 months while company B works Agile and claims to use some special tools to speed up time-to-market which is estimated for 3 months. This means that the final cost of building the product that is ready to go on the market is $38.400 for company A and… exactly the same for company B. The “expensive” company does not cost you more than the “cheap” one and it saves you 5 months of time-to-market. After 3 months you start to sell your application and get positive cash flow. As they say: time is money!
Do you have any other advice on how to choose the best outsourcing company for your startup? Share by leaving a comment!
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