The world of startups is fast-paced and dynamic. Everyone is vying for their edge in the market. Fostering innovation and maintaining agility are critical for success.
Outsourcing has become a strategic solution for startups to gain that edge. It provides access to specialized experts, a flexibility that allows you to quickly pivot and scale, and offers potential cost savings.
In fact, 60% of US businesses outsource at least some portion of their development processes.
So if you're considering outsourcing your software development needs, this article is here to help.
What is startup software development?
Startup software development refers to the process of designing, building, and maintaining software products tailored to startups. What makes this unique is that startups operate in fast-paced, dynamic environments where innovation, speed, and flexibility are crucial for success.
Software development for startups is not just about coding—ideation, market research, competitive analysis, MVP, product launch, and ongoing maintenance are all included in the process. And, the solutions being developed have to scale rapidly, adapt to market changes, and differentiate them from competitors.
To be successful, the development process has to be iterative with frequent feedback loops. This ensures that the software aligns with the evolving business goals and customer needs.
Why is outsourcing software development a good idea?
Unlike established companies, startups typically have limited resources. This makes efficient and effective software development a critical factor in their success.
By partnering with the right company, you can gain immediate access to an experienced, high-performing team—removing the time extensive nature of the hiring process. This plays directly into that needed efficiency.
In addition to the accelerated timeline outsourcing has to offer, other benefits include:
Cost savings
Access to expertise
Scalability of services
Faster time to market
Risk mitigation
Innovation
Global talent pool
What are the risks of software development outsourcing?
While outsourcing software development offers numerous advantages, it also comes with risks. Those risks depend on factors like the type of software development company you are outsourcing to, the quality of the company, and the location of the development team.
Communication and collaboration challenges
Time zone differences, language barriers, and cultural differences can lead to delays, misunderstandings, and challenges in managing and monitoring progress.
Quality and performance risks
The quality of work may vary depending on the outsourcing partner's expertise. Issues like inconsistent quality, missed deadlines, inadequate documentation, and technical debt can arise, impacting the final product.
Security and intellectual property concerns
There is a risk of data breaches, intellectual property theft, and non-compliance with local regulations or industry standards. Third-party access to proprietary information can also pose significant risks.
Cost and budget overruns
Hidden costs, scope creep, currency fluctuations, and lack of transparency in pricing models can lead to unexpected budget increases and extended timelines.
Being aware of these risks will help you in finding the right company for your development needs.
Who should consider outsourcing software development?
Outsourcing software development is not a one-size-fits-all solution. It’s ideal for different personas based on their unique needs and challenges. Those who should consider outsourcing include:
Startup founders
Early-stage companies with limited resources and a need to launch quickly can benefit from outsourcing. You’ll want to focus on companies with scalable, fully managed services like DevSquad. That way you’re not burdened with coordinating resources and keeping everyone on track. And, when you are ready to take over management you know that the transition services are in place to make that happen.
Small and medium enterprises (SMEs)
Businesses looking to scale without the overhead of an in-house development team. The type of company to consider for outsourcing will depend upon the internal team and the objectives.
For example, if you have a dedicated product management team on your payroll then you’ll probably want to consider a staffing agency. On the other hand, if you need the whole team then a scalable, fully managed company is the way to go.
Non-technical entrepreneurs
Entrepreneurs without a non-technical background can rely on external expertise to build their software products. Make sure you consider your short- and long-term objectives if this is you. If you are wanting to scale, be sure to choose a company that has a cross-functional collaboration team structure.
Established companies
Larger organizations seeking to innovate or manage overflow work can outsource to specialized firms. Most likely you’ll want to maintain a high level of control on your product so a staffing agency like Toptal is probably your best bet. But a fully managed service like DevSquad that supports product transfer could also bring a fresh perspective.
Project managers
Those overseeing complex projects that require specialized skills or temporary teams may find outsourcing advantageous. The type of outsourcing you choose will depend heavily on particulars of your project.
Product managers
Professionals focused on developing and launching new products can leverage outsourcing to expedite the process. When outsourcing, we strongly recommend bringing on a technical product manager to work in tandem.
IT departments
Internal IT teams facing capacity constraints or specific technical challenges may turn to outsourcing for support. If this is your situation we recommend going with a freelance company so you can find the specific talent you need to tackle those challenges.
Key elements to look for in a software development company
When selecting a software development company, it’s crucial to look for key features that ensure successful collaboration and quality outcomes. Here are some essential features to consider when vetting potential companies:
1. Expertise and experience
Make sure the company has a proven track record in delivering high-quality software solutions. Look for a firm that demonstrates expertise in the specific technologies and methodologies relevant to your product (for example, Laravel development for a SaaS product).
2. Idea validation
Consider how they evaluate your software development objectives and how they vet your ideas. For example, with DevSquad you get strategy from our CEO and CTO. But, we only take on new products we can provide a strategy for.
3. Agile methodology
An agile development approach allows for flexibility and iterative progress. This enables the product to adapt to changes in requirements and priorities.
4. Transparent communication
Clear and consistent communication channels are vital. The development company should provide regular updates, be responsive to queries, and maintain open lines of communication.
A great development company will also push back when they feel you are heading in the wrong direction, and communicate their understanding of your objectives to ensure everyone is on the same page. So be aware of yes men and companies that don’t seek clarity in your objectives.
5. Strong portfolio
A diverse and robust portfolio of previous projects is a must. Review case studies and testimonials to gauge the quality and scope of their work.
6. Dedicated teams
Dedicated development teams are so important. The teams take ownership of the product and become intimate in its development. This leads to better understanding of your requirements, an increased ability to quickly adapt and pivot, and an overall more efficient execution.
7. Scalability
The ability to scale resources up or down as needed is important. This is in and of itself, one of the primary reasons for outsourcing. Be sure the company you choose can adjust its team size and expertise based on your product demands.
8. Security and compliance
The company should adhere to strict security protocols and comply with relevant industry standards. This is particularly important when dealing with sensitive data or regulated industries. Breaches in security are a common reason for why startups fail.
9. Post-launch support
A reliable software development company offers ongoing support and maintenance after product launch. Software development does not end at this point. Instead it transitions to lifecycle management. Be sure that your project is being treated like the product it is.
10 top outsourcing firms for software development
When looking for a reliable software development outsourcing partner, consider what you are looking for before you begin the search. By deciding whether you want a fully managed team, or you want to manage them in-house will narrow the search.
1. DevSquad
Company type: Scalable, fully managed development services
DevSquad provides a diverse team of experts that work together to help your startup, organization, or brand launch successful digital products. This proven team structure includes:
Product strategists
Technical product manager
Developers
UX designers
DevOps engineers
QA analysts
We focus on customer-centric processes and developer-favorite tech stacks, and utilize our custom-built playbooks to streamline development and get your product to market quickly. We take a digital product (not project) approach to building—meaning we take on strategy, prototyping, QA testing, roadmap updates, and more. We are headquartered in Provo, Utah and source the majority of our nearshore developers from Brazil, where we source, train, and upskill top talent.
Key specialties:
Dedicated development squad
Government software development
SaaS product development and strategy
Laravel development
Project takeovers
Legacy app modernization
Check out how our love for Laravel and Vue.js has helped us build over 100 SaaS products.
2. Toptal
Company type: Staffing agency, no management
Being one of the most popular staffing solutions for software development, Toptal connects companies with top-tier software developers and engineers from around the world. Their rigorous screening process ensures that only the best talent is available for your projects. Utilizing Toptal is a great option if you're looking for top talent, but not management.
Key specialties:
Freelance UI/UX developers
Freelance software developers
Freelance QA testers
Freelance product managers
3. 6Sense
Company type: Scalable, fully managed development services
6sense offers custom software development. They focus on dedicated teams, managed delivery, and UI/UX design. Open communication is a high priority and they use Jira for tracking projects and releases. They also follow a Scrum approach for efficient project management. And, flexible and scalable team options are available.
Key specialties:
React and Node JS development
Dedicated software development teams
UI/UX design proficiency
4. Eleks
Company type: Scalable, fully managed development services
Eleks provides end-to-end software development services, with a strong focus on innovation and technology. Operating since 1991, they are known for their expertise in custom software development. With a focus on large-scale enterprise solutions, Eleks offers industry leading solutions for fintec, energy, logistics, and more.
Key specialties:
VR app development
DevOps consulting
Compliance automation
IoT services
Enterprise digital transformation
5. Honeycomb Software
Company type: Boutique development firm
Honeycomb Software is a Ukraine based boutique development agency offering personalized custom dev services. Their dedicated teams provide product design and software testing as part of their comprehensive offerings. Their portfolio showcases diverse projects, including a fundraising platform, a CRM system, a health and safety analytics tool, and a privacy platform.
Key specialties:
UI/UX development
Custom development services
Dedicated software development team
Software testing
6. IntellectSoft
Company type: Scalable, fully managed development services
IntellectSoft is known for delivering innovative software solutions tailored to the specific needs of businesses across various industries. They offer enterprise data management, custom software development, mobility services, software integration, and modernization and digital transformation services. IntellectSoft can handle big data, blockchain, AR, AI, IoT, and cloud computing projects.
Key specialties:
Enterprise software development
Dedicated development teams
IT consulting
Mobile app development
7. BairesDev
Company type: Staffing agency, no management
BairesDev is a prominent software development firm specializing in nearshore engineering services. They serve a diverse range of clients from startups to Fortune 500 companies. Their primary focus is staff augmentation. BairesDev tailors its services to align with each client's specific needs and objectives. The company utilizes proprietary, AI-driven team-building techniques to identify and assemble optimal engineering teams swiftly. It's important to note that clients are responsible for managing these teams directly.
Key specialties:
AI and data science
QA and testing
UX/UI design
Custom software development
Mobile app development
8. Cognizant
Company type: Scalable, fully managed development services
Cognizant offers a wide range of IT services, including software development. Their global presence and extensive experience make them a reliable partner for large-scale projects. If you're a large established enterprise company with extensive resources and really big plans, then Cognizant might be the right company for you.
Key specialties:
Digital lab solutions
Gen AI tools for manufacturing
Banking technology solutions
Application-led cloud modernization and migration
Platform-led application management
9. YouTeam
Company type: Staffing agency, no management
YouTeam is a staffing agency that connects you with a network of 50,000 vetted engineers from Europe and Latin America. You can hire developers with 3 to 15 years of experience. These engineers are available for full-time, long-term projects. The final hiring decisions will be yours to make, and you’ll also need to manage the team effectively. You’ll also have to coordinate with other collaborators like UX designers, DevOps, and QA specialists, so be prepared to take on significant management responsibilities.
Key specialties:
JavaScript development
IOS development
Ruby development
Developers on demand
Ecommerce development
10. Saritasa
Company type: Boutique development firm
For those interested in utilizing the services of a boutique firm, Saritasa is a good option. They offer mobile, software, web, 3D, and IoT development. From their headquarters in Newport Beach, California they have been helping customers in a variety of industries achieve their software development needs. Be aware that as a boutique firm they have limited resources. So if you are in a rush you might want to look elsewhere.
Key specialties:
Web development
Project takeovers
Mobile development
AR/VR development
IoT solutions
How do you evaluate a software development company's performance?
Evaluating the performance of a software development company involves several key criteria:
Quality of deliverables: Assess the functionality, usability, and overall quality of the software produced. It should meet or exceed the project's requirements and be free of major bugs or issues.
Adherence to timelines: Evaluate whether the company delivered the project on time. Timeliness is crucial for maintaining project momentum and meeting market demands.
Communication and transparency: Consider how well the company communicates throughout the product development. Were they transparent about progress, challenges, and changes?
Responsiveness to feedback: Assess the company's ability to incorporate feedback and make necessary adjustments during the development process.
Cost management: Review whether the project stayed within the agreed-upon budget. Were there any unexpected costs, and if so, how were they handled?
Post-launch support: Evaluate the level of support provided after the product was launched. Did the company offer prompt and effective solutions to any post-launch issues?
Custom software development: Our approach for success
At DevSquad, our approach to custom software development is centered around delivering high-quality, scalable solutions that align with our clients' business goals. Our four-step approach to success includes:
Working with DevSquad begins with a design sprint workshop for new products. You get strategic advice and product strategy from our CEO and CTO who help with technical decisions, architecture, development feasibility, cost, aligning to user needs, and product-market fit.
A plug-and-play, fully managed, cross-functional team of experts then takes on your product and brings your vision to life. They handle everything needed and provide transparent code that you can review at any time.
We only take on new products that we can provide strategy for. And we only select the best potential products because we can only onboard a couple of new customers a month.
Are you building a SaaS startup? Get expert technical advice and product strategy from our CEO and CTO alongside fully-managed product development. Learn more about our SaaS development agency.
