Should Early Stage Startups Hire Developers In-House or Outsource their Project to a Third-Party?

Hiring a developer for a project can be a difficult process because of a major shortage in top talent. For startups about to move from idea to development, choosing between hiring in-house or outsourcing to a third-party can also be complicated as you have to consider a variety variables that can impact your decision.

So how do you ascertain if your early stage startup should hire developers in-house or outsource it to a third-party?

Both options have their own advantages and disadvantages, but the ideal solution will be relative to your resources and what you’re hoping to achieve with your project.

In-House Developers: Pros & Cons

If you hire developers in-house, it can be an advantage in the long run as you will have the possibility of building a strong team that’s focused on building your product. It will also be easier to manage as you will get to know your employees and know exactly what they are working on at any given time.

This approach will also provide you with the opportunity to react immediately to the problems that might pop up during the course of an iteration. Furthermore, you will also benefit from enhanced communication as you will all be in the same office to meet and discuss the project as needed.

Additionally, you won’t have to be too concerned about security as you aren’t sharing any sensitive details regarding your core business with a third-parties.

But on the flip side, this approach will require a significant investment of capital and time to complete the project (or have a viable MVP). Furthermore, you will also need to invest in other resources like recruiters and HR specialists.

Let’s face it, it’s hard to find developers with the necessary skills and experience who are available to take on your job. As there is a huge shortage of top talent, you have to accept that you won’t be able to compete with established tech enterprises.

The time-to-market will also be a lot longer because of the time it takes to hire someone. Furthermore, it will also take a while for new recruits to get comfortable with the company and working culture. You will also need to factor in the time it takes for a team to get know each other’s strengths and weaknesses in order to work well together.

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If you’re based in the U.S. or Western Europe, you will have to pay developers a lot more than you would if you were based in Asia or Eastern Europe. Furthermore, in-house workers will require furniture, equipment, and office space (not forgetting all the energy that will be consumed).

If you’re not from a technology background, you might not realize that the developers needed for any given build can fluctuate. So you might find times when a couple of developers are not needed while other points of the iteration will require you to go through the whole hiring cycle again!


Third-Party Developers: Pros & Cons

The option of outsourcing comes with the benefit of avoiding the whole recruitment process altogether. This will save you a time and money as once you have chosen an outsourcing partner, you already have your team of experts hired.

This approach can also be highly cost-effective as you can work with a third-party in a location where the cost of living is significantly cheaper. Furthermore, you can start building almost immediately after the requirements are mapped out.

Additionally, you won’t have to worry about the costs associated with the fluctuating requirements for developers during the course of the project.

As outsourcing companies work on several projects each year, you can be sure to benefit from someone else’s experience. This is because they would have learned from the problems they had to solve while working on similar projects. As a result, you can avoid falling into the same trap.

While all this is great, you have to careful when choosing an outsourcing partner. There are plenty of them out there, but not everyone will meet the standards that you have grown to expect.

It’s also important to take the time to find the right outsourcing company as you need to make sure that your data and projects stay secure.

Furthermore, you might also feel less control over the project as it’s being built far away. But this can be remedied with tools like Slack, TeamWork, and Trello.

While both in-house and outsourced development options have significant advantages and disadvantages, the best option will ultimately come down to the resources that are available to your business.


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    Andrew Zola is a freelance writer, designer, and artist working in branding and marketing for over ten years. He is a contributor to various publications with a focus on new technology and marketing.