Should You Consider a Dev Shop to Build Your App?
You’re a startup with a small founding team that has a great idea and funds to build it out, you’ve received great feedback from mentors, incubators, and possible investors. You now need to evaluate how to best allocate your funds to get your solution out the door so your users can get their hands on it and you can start to test product-market fit, get constant feedback from them and build a great company around you digital solution so that you can get the traction you need to get to the next round of investing that will help you scale.
Your CTO has a tough choice to make:
First option: Hire a few engineers with the funds available and start building the product in-house, knowing that your runway is, on average, 6 months before you have to go out to look for more cash to keep pushing forward. You get to keep total creative and development control but run the risk of running out of funds if you hit a roadblock somewhere along the way.
Second option: Look for a development shop that can work closely with your team and can get your product out to market in a shorter period of time. With the funds that you might use for just 2 developers over a 6 month period, you could get a small team, project manager included, working on your project full-time.
It’s not an easy call
Can you trust that the development firm will deliver? Can you risk not getting your app or platform built if you run into roadblocks with your in-house team? In the early stages of app development, this decision can make or break your company.
A good development shop might be able to get your software out the door in a shorter period of time, no need to tell you what launching sooner can mean to the success of your business, right? The sooner you launch your app or platform the sooner you can start to make the business decisions that will get you closer to profitability and a sustainable business. A few months can be the difference between getting to your next funding round and getting hold of your target market or struggling in a competitive red ocean. Companies need to move fast these days, there’s always someone that wants to compete with you for your customers by offering a similar value proposition.
Outsourcing the development of your app or platform will also allow your team, with its limited time and resources, to focus on business development, marketing strategies, partnerships, market studies, and investor meetings with much more flexibility than if you had the project development in-house.
Of course, there are also fixed and variable overhead costs to consider. If you build your software in-house it also means that you might need to rent physical space for your team to work, you might need to provide hardware, transportation, food, coffee, chairs, desks, and so on, those costs can add up fast. Not to mention the fixed costs (electricity and lightning-fast internet, for example) that you have to build into your budget every month.
Building and launching your digital products can be a very stressful process. There are many moving pieces and there are a lot of things that can go wrong. One of the main reasons startups fail is not because of a bad idea, or bad product-market fit analysis, but because they fail to execute, they fail to build and ship a great product in time and simply run out of funds. Reaching an agreement with a trusted software development shop can give you the peace of mind you need, knowing that the product will be built and that you can focus your sales efforts on growing, rather than just getting to market. A great dev shop will work closely with your team to build exactly what you want and will help to guide you through a very important time in your companies life-cycle. The right development firm will be an essential partner that you can lean on to build great software and to get great insight into possible technological and development opportunities that you might not know about and that will get you to market sooner and leaner without compromising on the scalability you will need when you start to grow.
If you have a clear vision of what you need to build a development shop can be the right choice for you, but, if your product needs many iterations and changes you may need to consider the extra costs associated with those constant version launches. The best-case scenario is drafting a contract that will give you and your dev shop the flexibility to build new versions in a structured way that. Finding a development firm that can be a long-time partner in your journey is ideal.
Some things you need to consider when choosing the right dev shop
Always protect the "core" of your business. Whether you decide to build your software in-house or choose a dev shop, your first responsibility is to ensure that whoever is writing the source code has a strong and long term relationship with you and your business and that the source-code written is of high quality and that the development is well documented.
An American outsourcing firm can be expensive, off-shore companies can be a risk. An alternative is an American company that has near-shore development teams that allows them to be competitive in terms of pricing but are close in terms of customer service and communication. More importantly, a key factor in the decision of whether to outsource or not is which country you're using. If your provider is in a country with weak intellectual property protection laws, then you need to understand that you probably have no recourse if they decide to run with your code to a competitor or sell your solution to someone else. Working with a company that is incorporated in the US allows you to draft air-tight non-disclosure and non-compete clauses that protect your company.
Another important thing to consider is the dev shop’s track record. Are the leaders of the company experienced in software solutions for startups and enterprises? What are their backgrounds? Have they been building tech for a long time and with happy clients along the way? Are they willing to let you speak to past customers to verify satisfaction? The dev shop you choose should be extremely transparent with you every step of the way and they should have fluid communication channels for you to be in contact at every stage of the relationship.
Choosing whether to develop your software in-house or outsourcing to a development shop can be a tough decision that needs to be analyzed thoroughly. If your team has limited resources and time or if the team is not technical choosing a dev shop can be the right alternative if you choose correctly.
Recap of things to consider:
- Is the dev shop transparent with you from the onset?
- Are there important cost reductions?
- Are they willing to sign non-disclosure and non-compete clauses?
- Are they radicated in a country with strong intellectual property laws?
- Does the firm have a strong track record in tech?
- Are past customers satisfied with their work?
- Is the dev shop willing to draft contracts with great long-term conditions for iterations?
- Do you see yourself working long-term with the dev shop if that is within your companies needs?