How Outsourcing Company Can Be Your Startup’s Best Friend

As a founder, you are a specialist in your industry. You’ve had your “lightbulb moment”, the idea that will disrupt your industry with the use of technology.

You know all about the Lean Startup by Eric Ries. Maybe you’ve already decided you are going to build a Minimum Viable Product (MVP).

But, as marketing guru Neil Patel says “There is no such thing as a solo entrepreneur.” So, naturally, you start looking for a technical co-founder with a view to building your dream team of product experts and best in class developers.

There’s just one problem: it’s hard to attract top talent with an idea on a napkin.

It’s a classic dilemma. Obtaining top talent, with a limited budget, to transform your idea into a successful product before your competitors beat you to the market.

Dudley Gould, Founder & CEO of Audapio experienced this quandary first-hand and a software development agency ended up being his best friend.

Dudley spent a long time thinking he needed a co-founder and spent six months looking for one — wasting precious development time, increasing his time to market. Primarily, he was looking for someone with more knowledge and experience than he had. After failing to find his ideal business partner he started researching Software Development Agencies.

He searched online, reaching out and talking with over 10 agencies. In his search, he found Altar.io and, after connecting with us, took part in our Founder’s Retreat at our Lisbon HQ.

We offer this to all founders who undertake our intensive 7-day Product Scope where we dive into your product vision from a business standpoint to find the right features for your MVP.

“Altar’s been able to add a lot of value just from their experience of not just working with a lot of different startups but running startups themselves. So the biggest value, arguably, isn’t the tech at all, it’s the complete infrastructure. Having a mentor, having a tech team, having a business development team all in the same place.” — Dudley Gould, Founder & CEO, Audapio.

He realised the most important aspect was the development of the product itself. The user stories, business model and stakeholders’ analysis allowed him to put a structured rationale behind his decision making. This has put him in a much stronger position moving forward to developing the technical aspects.

Related: Founder’s Guide: How to Outsource Software Development in 2020

So while I agree “There is no such thing as a solo entrepreneur” does that mean you need to follow the traditional path of finding a technical co-founder and building an in-house team from day one? In my experience, you don’t.

Below are just some of the reasons for outsourcing software development to a group of experienced, knowledgeable professionals can give your startup a huge advantage in its early stages.

The needs of your early-stage startup will vary as you build your company. There will be many ups and downs before you reach stability, only then will you be able to predict what you will need in a team.

During this stage of instability, there will be certain stages where you need to focus everything on developing your product — this is where outsourcing software development can be great for you.

When building a product with a software development company you only pay for development when you need it. If your execution needs are low you can save precious resources for something else, like marketing your product etc. Conversely, with an in-house team, you are committed to paying their salaries regardless of your development needs.

As a startup founder, your time to market should always be at the forefront of your mind. It’s important to build quickly, prove your value proposition and make sure you are building something people want. This causes many founders to get stuck in an “I need my team now” panic. You need to avoid this, hiring in a rush and ending up with the wrong people is worse than not hiring at all and can easily kill your startup.

With an agency, you will get a team of product experts and software developers who have a proven track record. Moreover, they will have worked with each other for a long time so there will be no teething problems in terms of onboarding and team cohesion. Ultimately this allows you to get to market quickly whilst lowering the risk of onboarding “bad apples” in the process.

As I’ve mentioned, hiring top talent is an expensive task. Research shows that in the US the average salary for a CTO alone is nearly $150k a year with the average Full Stack Developer costing around $114k a year. So how will you afford to build a team?

You could try investors, however, just like top talent, they will rarely be attracted to an idea on a napkin. And even if they are they will probably ask for a lot of equity and you could risk losing your shirt.

Which leaves you with bootstrapping through your early days, as most startups do. But with a full in-house team to provide for financially can you get your startup off the ground before your pockets are empty?

Be careful with both your equity and expenses in the early stages and only spend money where & when you need to — this is where my next point can help you.

Many startup schools will tell you “You need a multidisciplined team of founders (tech, business, product, design, marketing and development) for your startup”. And while in an ideal world that would be the case for all of us, not having all of these skills in a founding team is not a big issue.

“Creating a tech startup in today’s world can be done by any smart entrepreneur — the key is knowing how to connect with the right networks.” — Eric Ries

Knowing your customer, your industry, nurturing & growing your network, managing your time and (above all) knowing what to prioritise is essential for growing your business. If you can do that all you need is for your vision to be neatly designed and executed. And if you find the right Product & Software Development Company, there’s no reason not to outsource said execution.

When bringing any professional into your business you need to find passionate and hungry people with the strengths that your company currently lacks. Whether its experience, UX/UI, tech or product. Outsourcing to a Software Development Company is no different.

Good, reputable Software Development Companies only hire the best professionals. Who, through working with the company, will have quickly built a large portfolio in a range of industries. They become specialists in the businesses they advise. From Fintech to Online Travel, Marketplaces, E-commerce, and so on, you will have a wealth of expertise at your table ready to help build your product.

That being said, you need to make sure you take the due diligence when outsourcing to a Software Development Company to make sure they are the right fit and follow the industry standards.

As with any business process you need to protect your intellectual property. Have lawyers look at any contracts and NDAs between you and the potential software development company.

In many cases, they will be using a good percentage of code that belongs to them or to open source communities (imagine the code for a login window or social media share button). In these cases, the agency will lease a free perpetual license for you to use this code.

For everything that is unique to your product, you should negotiate shared or exclusive rights to its intellectual property.

A high-quality Software Development Compay will have decades of combined experience — all of which is available to your startup. Therefore, don’t just ask them to execute on your ideas. Share your ideas and ask their opinions. Ask them strategic questions to impact your business positively regarding:

Conversion improvementsKnowing the customer betterGaining trafficLeaner tech strategiesSolving the customers’ problemsCreating certain featuresWhich features are more importantBuilding a roadmap to stay relevant and ahead of the curve.

On the other side of the coin be wary if they say yes to all your ideas. This may be a sign they are just looking to cash your cheque! Great agencies give you an experienced Project Manager, and never leave you dealing with an uninformed Account Manager. Your PM, along with your product experts and software developers, may challenge your ideas and see things differently from you.

Be ready for contrary ideas and candid advice on how your product can be more meaningful to your demographics. Take full advantage of this, it shows that the agency you are dealing with care deeply about the success of their projects — an umbrella you now fall under.

Since the early 2000’s unicorns of the industry have been outsourcing software development. From Appsumo & Alibaba to Slack and Github startups have relied on Software Development Agencies for their development needs.

Don’t get me wrong, legendary companies like Apple, Microsoft, Airbnb and Facebook were started in a garage or dorm room with a pairing Product and Tech geniuses. Having the dream technical co-founder and building a great development team from day one is, of course, the most idyllic option. Unfortunately, those stories are rare.

Not to mention that, although they didn’t start that way, even Google, Apple, Facebook and other giants of the industry outsource aspects of their software development.

If you are able to find a highly-skilled, experienced technical co-founder & development team within your startup’s budget from day one then you should jump at the opportunity.

In my experience, however, few founders find themselves in this position. And it doesn’t take away from the fact that onboarding too soon is a financial risk, especially if you are yet to validate your product.