Why Should New Businesses Hire a Third Party to Create Their Software?

Innovative start-ups are tasked with turning concepts into profitable offerings. There is immense pressure to showcase to investors and the market that a practical solution to a significant problem exists. However, prior to achieving this goal, new businesses must overcome a set of hurdles.

Smaller development teams and limited resources for operations and personnel are common among startups, as opposed to bigger corporations. Sadly, the odds are against them, as 90% of startups fail, and more than 20% cease operations within the first year. Consequently, making wise business choices early on is imperative to enhance the likelihood of triumph.

Software development is a crucial aspect of any new enterprise in today’s business realm. The field of software development encompasses various methodologies and technologies, making it a laborious and costly process to hire the perfect full-time engineer for the job. Outsourcing presents a viable solution to mitigate these obstacles.

Specialised software development outsourcing companies strive to fulfil the specific demands of startups and produce the requested product. This approach reduces costs, quickens the onboarding process of new staff, facilitates scalability via the outsourced product development team, and enables access to software expertise that may not exist within the core internal team. During periods of limited talent supply, this can prove advantageous for companies.

The Advantages of Outsourcing for Startups

Cost Savings

Securing and retaining highly-skilled employees is a costly endeavour. The annual salary of a software developer can vary from $70,000 to $210,000. Due to the unpredictable nature of their business practices, startups often encounter hiring challenges in relation to developers.

Newly employed personnel may receive a lower salary compared to individuals recruited by well-established enterprises. When hiring a new developer, it is essential to furnish them with essential amenities like education, tools, software, and office space, which results in the expenditure of average £4,000 per new employee.

Implementing an outsourcing service for software development may translate into substantial cost reductions for your enterprise. Offshoring offers the benefit of reduced labour expenses without any hike in rent, benefit, or sick pay expenditures. This has the potential to result in noteworthy savings for your business.

Offshore outsourcing is gaining momentum, with countries like India, Mexico, the Philippines, and Argentina being frequently considered. Nearshore options still present substantial cost benefits, albeit time zone disparities and language hurdles may raise apprehension.

Expertise in Innovating New Products

Aligning with a software development company that is knowledgeable and experienced in collaborating with startups can furnish an internal development team with invaluable skills in product management and development lifecycles. Such companies generally possess vast expertise in handling diverse customer demands, allowing them to competently evaluate and fulfil the unique requirements of a startup.

Proficient software development outsourcing service providers avail of the proficiency of skilled product managers, project managers, DevOps engineers and other specialists to guarantee the smooth progress of software development and evade possible obstacles.

In the pursuit of success, startups must furnish resources to their management team, although such resources may have greater utility in creating and upholding customer relations. Outsourcing proficient product and project managers from external firms can help satisfy the necessities of startups. It is crucial to observe all contractual obligations with the startup since they are the connecting link between the internal and external teams during their inaugural collaborations.


Investors are placing ever greater emphasis on a software’s scalability while evaluating its appropriateness for startups. Failure to design a product to accommodate a growing customer base poses risks like severe software instability and downtime. Hence, it is critical to guarantee that the product is constructed with provisions for capacity modifications.

Social media’s usage and the strategies associated with it can render the market highly volatile. Startups can experience abrupt and substantial surges in their user base with minimal forewarning. Consequently, it is imperative to account for designing software that can be updated and enhanced quickly and with ease.

Moreover, outsourced development teams can augment or reduce their workforce in response to any changes in the original product’s scope. With access to an extensive pool of developers, the software development service provider possesses the capability to promptly assemble a new team for every project.

Distinctive Capabilities in a Specific Domain

To commence the Software Development Life Cycle, stakeholders should envisage and delineate all the desired features and technologies. In case the internal development team lacks the requisite skill set, outsourcing is a viable alternative. This obviates the need for the in-house team to spend time and resources on acquiring knowledge about the latest technological advances and delegates the task to experts.

The startup’s initial goals may transform as the initiative advances since businesses and their clients are constantly evolving. Those who offer software development services can opt to utilise their in-house team or outsource the assignment if a new specialist skill is required during the project.

Recruitment and Onboarding Time Is Eliminated

Recruitment is a highly specialised field where locating the right person for a position can be protracted. The process of sourcing appropriate candidates is not only time-consuming but also requires that the selected individual has all the requisite skills, fits into the company’s budget and is compatible with the existing cultural dynamics of the team. Furthermore, the time gap between an interview and the employee’s official start date can be considerable.

By outsourcing their software development, businesses can circumvent the recruitment process. The outsourcing company will supply the required personnel, allowing recruiters to take their time in choosing the best candidates for permanent positions. This way, businesses can capitalise on the research already carried out by the outsourcing company to ascertain the most appropriate developers for their projects.

Effective and Commonly Utilised Approach: Outsourcing

At the outset, several thriving businesses contemplate outsourcing as a feasible alternative. WhatsApp, the most widely used messaging platform in the world, with a current valuation of roughly $19.6 billion, was created utilising outsourcing.

With over 70 million developers using it, GitHub is the unequivocal market leader in version control and code management. During the company’s nascent stage, Scott Chacon, currently the Chief Information Officer of GitHub, played a pivotal role as a founding member by developing the backend for Gist as a freelance developer. Numerous other thriving startups, such as Slack, UpWork, Alibaba, Opera and MySQL, have also gained from outsourcing their software development.

The Significance of Outsourcing

For a startup, outsourcing software development has several advantages and minimal disadvantages. To guarantee success, the company must promote an inclusive and cooperative atmosphere, where communication amongst employees and partners is fostered.

While working with an outsourced development team, the initial stages should involve ideation and planning. Subsequently, the team should progress to constructing the software’s interface and infrastructure. Following this, the team can begin the development and testing of the program. Once the final product is complete, the startup may consider having the outsourced team retained on a part-time basis to manage the deployment and maintenance.

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