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Why outsourcing software development is logical for a startup?

Posted By Praveen Joshi on 21st June 2018
what makes a mobile app popular

Today’s world belongs to entrepreneurs. Most of us have witnessed the success story of people who have created business empires out of nothing. Every day we see new startups coming up with ideas that can disrupt the local and possibly the world economy.

However, underneath the sheer will and passion, the problems that plague startups are unending. Seed funding, that golden fruit that every entrepreneur dreams to taste, is a rarity. Most investors expect a minimum viable product (MVP) to be ready before they open their wallets.

But, what if a single solution can help you with that amazing plan? Software development outsourcing is that arrow that can shoot your multiple problems in one go. Here is why startups need to outsource software development.

Outsourcing in startups

Well, you must know that outsourcing in startups is not an unprecedented or even a revolutionary idea. The lines between startups and companies were more blurred before than now, so many startups in the past saw big companies benefitting from outsourcing, and simply followed the trend.

Slack, a company that makes tools and services for online team collaboration, began its journey by outsourcing its logo creation, marketing and web/mobile app development to Canada. Today, it has a total valuation of $3.8 billion. Skype, the popular video calling platform, had a similar experience with outsourcing that led to its $8.5 billion net worth.

Then you have companies like Whatsapp that continued using outsourcing throughout its run. Apart from outsourcing entire customer support to remote teams, it also employed Igor Solomennikov as a freelance iPhone app developer which allowed Whatsapp to launch itself on Apple Store.

But, it will be wrong to say that outsourcing is something that is adopted only by small companies. Google, the giant that is now an Oxford-certified verb too, still outsources most of its technical, non-essential jobs (like AdWords support) to low-cost companies in countries like India. Since 2014, the company is involved with the technology service provider Globant under near shore outsourcing.

Advantages of outsourcing

Infrastructure Costs

Cost is the primary obstacle in the path of budding startups, most of which survive through bootstrapping. Developing products within the organization will require additional full-time staff, even if the project is short-term. But beyond that, there is the need to have an entire infrastructure that supports in-house development. This includes the necessary hardware, software, tools and environment. Estimates suggest that an average startup would need to reserve 20-25 percent of its funding, if it wants to develop its own products.

Outsourcing is way more feasible and allows you to match the expectations with the budget. A formal partnership with an outsourcing firm, instead of one-off projects, can further reduce the costs for you.

Technical Expertise

Great products have great minds behind them. However, the curse of being a startup often prevents experienced professional from joining the team. In the unlikely case that they do, a significant portion of equity goes in their contract.

However, thought outsourcing, startups can gain access to a huge pool of technical expertise and experience.

Experience

Few things can be attained through your sheer will, but few others cannot. Experience falls in the latter category. Startups often lack the experience of building and launching a product. As mentioned above, most senior professionals are reluctant to join the team, so it is largely a team of young entrepreneurs who don't have much idea about how the market works.

Outsourcing firms, on the other hand, specializes in this. Their large teams often include people with high expertise and long experience in the field. But even beyond that, the very nature of their work allows outsourcing firms to be experts in product development and marketing. That experience only facilitates you once you join hands with them.

Generate Investment

With the full power of outsourcing behind them, startups can boost their capacity by many folds. New avenues of sales like social media and customer outreach can be explored. Naturally, it will increase revenues significantly- something startups desperately need in their initial years. Through constant increase in ROI, startups can earn the trust of investors.

Scalability

We operate in a dynamic market today, and it is hard (despite the best efforts) to foresee the changes we will have to make in the future. Product scalability is one such issue that often troubles companies. In case of startups, the situation is even more critical. Product scalability requires a lot of additional cost and efforts, and sometimes it is simply not feasible. However, the reason behind it is not sheer impossibility, but simply the lack of resources and infrastructure.

With outsourcing, both of these issues are solved. With easy scaling of products, it becomes easier to make the product more durable and suitable for the needs of the market.

Conclusion

Outsourcing might not be the magic wand that can make all your problems disappear. But it is closest to the magic that entrepreneurs can hope for. Without compromising on anything, the sheer advantages you receive are too big to ignore. Having a software development outsourcing firm as your partner will definitely help you reap long-term benefits.

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