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Advantages of Launching the Startup with an Outsourcing Team

  • 14-15 min read
  • April 29, 2022
  • 👍 Rating — 5 (1 vote)

Outsourcing a development team is the most suitable type of cooperation for startups. Outsourcing vendors have already set up their team-building process, business leaders, development and project management methodology, human resources, and inner processes to ensure the software projects will be done successfully.

Further, in the post, we would like to dive into the advantages of partnering with outsourcing software suppliers for startups and how to be mistaken with the winning team selection.

Types of cooperation with outsourcing teams for startups

Basically, talking about startups, we divide them into three main groups of companies that have different business requirements, expectations, plans of growth, and current solutions. To help you understand which startup type your company owes and what kind of services and solutions you may need, we would like to take a close look at each of them below.

Startup with an idea but no software solution

This type of technology startup is supposed to be common and well-known. Basically, it is the true understanding of a startup company.

It is a small business that has already succeeded to specify the founder’s vision of the software solution, finding investors, and getting funding for the first or other rounds. The right team is set and ready to build the plans to enable business growth and development.

Such startups commonly have the million-dollar idea for their future software product that they will sell to other companies like SaaS solutions or use to provide their services to their clients. Based on our experience, we recommend finding the tech partner as soon as the idea concept is clear to the right team members. The outsourcing software vendor will hold a discovery stage for your software product idea to define:

  • The market trends, demands, expectations, and competitors to verify the value of this concept – this usually is called the proof of concept process;
  • Specify your business scalable goals, values, and expectation related to the speed of business growth and collect this information into the project specifications docs;
  • Approximate estimating the project according to the functions of the future software products and available budget;
  • Setting up the human resources and development process including project management, documentation, deadlines, and other cooperation details.

A business that has a released MVP product

The next type of technical startup implies the companies that have already built an MVP of their software product or solution. MVP development entails developing the basic functionality of the future software applications in order to test on first users, listen to their feedback and specify the following steps the team needs to take to build high-quality software.

At Altamira, we have provided the MVP development service for our clients in the early stages many-many times. We also recommend this approach for the successful startup at the beginning of their business path with the idea of the software from the founding team or co-founder but no functional app.

As soon as the MVP is launched and tested, the development good team helps to conceptualize the further development and define the business requirements and functions for the complete software product.

Developing and launching a complete software product is a must, an MVP version is not enough to release it to a wide audience. If your technical startup team already has a ready MVP of your future business software solution, then the rest of the development process will take less time and less budget due to:

  • As you have built an MVP with your startup team, you might have the inner development team whose technical expertise and experience may not be enough to continue the development;
  • Commonly, the MVP development lasts for approximately 3 months, which means that the time to the complete launch shortens, and you can use your product soon;
  • You may need fewer developers to extend your team, than if you haven’t had the in-house developers, therefore you are going to save your costs.

Thus, outsourcing developers are the perfect solution to the potential problems we counted above. Outsourcing software vendors like Altamira commonly provide the build teams to extend your inner capabilities which include several components and types of cooperation, particularly supplying your team with several software engineers, supplying your inner team with the remote development team with the specialists you require like project manager, business analyst, and so on, and the complete outsourcing team who will continue the development of the software product if the co-founder is willing to pause cooperation with the in-house team due to its cons.

The business has a software product and wants to scale

And the last general type of startup is actually not a startup anymore. It entails small and mid-sized businesses that have been on the market for a while, have already formed inner development and executive teams, and have already built the software product and relationships with their audiences.

Once a business launches a software solution for personal use or selling purposes, it requires constant maintenance. Along with fixing bugs and system errors, it also means expanding the range of options and improving the product overall due to the market trends and customers’ needs and expectations.

The common issues most businesses of this stage face are the absence of the proper plan for the business development, gaps in the technical background of inner engineers to continuum building the product, or lacking enough developers to execute the everyday tasks qualitatively.

It is the moment when the business needs to scale the software solution to enable business growth and development like numbers of clients, conversion from leads to clients, staff, and revenue.

Due to our extensive experience building software for startups that were in different development stages, we have created a perfect formula for startups that need to scale quite quickly. We call it a scaling up or scale up proposition.

Foremost, our team members fixed the urgent issues and filled in the gaps in your inner team with the Altamira outsourcing developers. And the next step is the planning of our following steps to scale your product with the required options and discussing the resources your business needs to execute all of them due to the “Now, Soon, Later” approach.

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Advantages of an outsourcing team model for startups

The majority of startups and small businesses that have already built MVP or complete software products, select the outsourcing development team-building model. We surely say that this is reasonable, and we would like to explain why and discuss for founding teams or co-founder how to launch a startup with outsourcing team successfully.


Lower operating costs
Startups mostly prefer the outsourcing team-building model due to the cost-efficient approach to the development process that startups actually need. When you hire a remote development team, you eliminate the spending of your investment round on office rent, monthly payrolls to the inner team, recruitment process, hiring process, equipment for engineers, education, training, insurance, and many other things. While saving costs in the counted areas, they can be directed to the product development or other more vital setup business processes.
More scalable operations
Founding the in-house development startup team requires much labor costs and time for hiring and onboarding. Talking about startups, this approach is irrelevant and far not profitable. The outsourcing development team includes the engineers your project requires at this moment, no more no less. In case the project requirements change, the team members can flexibly narrow or scale considering the scope of work, budget, and deadlines.
Recruitment process

Recruiting becomes the most challenging process for startups as hire people always entails the availability of a certain skill set. When you decide to build a software solution or upgrade\rebuild  the existing one with a minimum of extra spending, you need to hire engineers with the best talent to create the complete development team to execute your project properly.

Numerous passionate individuals, CVs, interviews, probation periods – it takes plenty of time to reach a startup’s success. And there is no guarantee that all the selected developers are perfect candidates that has a great vision of your future solution. Eventually, you waste your time, and money and don’t build the software product that impacts your overall business scale. In the outsourcing team model, your task is to select a credible software vendor who will supply your startup company with dedicated individuals and other resources at once.

Technology stack

The lack of engineers with certain technical expertise may become the main challenge in building software products for startups. This issue reveals when the development process has already started, so the team has to be supplied with the needed specialist in the short term.

Outsourcing vendors are commonly capable of providing your in-house or outsourcing team with the lacking technical specialist to save the development process and avoid money and time losses. Again, you don’t deal with the hiring and onboarding process, as they are managed by your software vendor, your startup just gets help in time.

Advisory
The majority of outsourcing software vendors provide advisory within the software development services. This approach entails analyzing the ongoing business problems, and their solutions with the implementation of the software product. Thus, this process helps to figure out the requirements for these products and their functionality. The development team suggests the decisions to your issues in order to specify the design and architecture of your solution.

Pitfalls of partnering with outsourcing team for startups

Poor-quality product

This is challenge number one for startup companies who haven’t built any software product previously and need to develop it from scratch.

Commonly, startups have quite a limited amount of money dedicated to software development as they have numerous other expenses for separate roles related to their business like salaries, office rents, taxes, and so on.

So most of them are afraid of wasting money on the development and of getting non-functional and poor-quality software applications. This pitfall is easy to avoid by selecting a credible software vendor and starting with MVP development.

That’s what we suggest for startups at Altamira – if you are not sure about the final product you want to get, just build an MVP product – the solution with the basic functionality that will be tested on first users before moving on the development process. MVP development defines the further steps in the solution development, meaning the required options for future users.

Communication gaps

As the entire development process is held remotely, there is a risk of poor communication with your outsourcing partner. It is pivotal to outline the communication channels and regularity and soft skills you expect from your software vendor.

It defines the level of awareness of the progress of your project. Discuss how many calls you are going to have per week or month and what things you would like to figure out about during these meetings. Select the communication tool with the chat, where you can reach out to each specialist involved in your project.

Also, make sure you have the constant of the chiefs of the company you partner with to connect with them in case of troubles with the team. Additionally, we recommend selecting the software vendor from the locations where the time zones correlate with yours.

For a good example, if you are placed in the USA or Canada, you can boldly choose the software company from Europe as the difference in 7-8 hours is quite convenient for both of you.

No control over the development process

The outsourcing team model entails the management of the entire development process by the project manager from your software vendor. It means that all processes are held and managed remotely, without your participation in it. Your awareness of the progress depends on the communication channels you have previously selected.

The development team has to alert you about the changes in the development process, report on the executed tasks and time spent on them, and consult with you on the further development steps, as you are in the role of the main decision-maker on the project. They can advise you, but the final decision is only up to you.

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Aslo, check out our recent long-read related to the difference between MVP and MMP.

5 essentials to consider when hiring an outsourcing tech partner

1. Outline the expectations

The cost of the entire development process is important for startups and businesses overall. It influences and defines the expenses of other processes within the company as well. But it is literally impossible to name you the exact number of how much the software product development will cost you.

There are lots of factors that influence the cost, and some of them cannot be predicted at the beginning like the project requirements change, scaling the team, replacing some developers, and so on. Based on our skills and awareness of the startup’s culture, forevermore it is pivotal to outline the scope of work on the project and your expectations relating to cost, duration, etc. That is what really matters first.

2. Documented workflow

The original project requirements must be properly documented, including the workflow of your software supplier, the app architecture, design, and functionality. The project stages depend on the project management methodology.

For example, at Altamira, we follow agile scrum methodology that entails splitting the entire project into sprints that consist of epics and user stories. Each project sprint implies building a certain piece of solution functionality. Initially, the sprint is planned and discussed with the client, executed, and then the results are agreed with the client. It also has particular timelines, the scope of work, and a list of the required technologies and specialists.

3. Value the experience of the software partner

Despite your outsourcing vendor partnering with your business remotely, be ready to trust their hard skills and expertise and listen to their recommendations attentively. Before the start of the development process, your software supplier is tasked with exploring your business, its inner process, policy, team structure, problems, needs, and requirements.

So, probably, your case is not the first similar case in their skill sets, while you are a startup owner or co-founder newbie in the entire business area. We are not saying your decisions are always not right. But we strongly suggest evaluating different opinions from different sides and choosing the most profitable one for your business. Thus, you will avoid many issues and risks working with your outsourcing partner.

4. Attention To Service Value

The structure of the inner workflows of your potential software partner has a great impact on the quality and range of services they are able to deliver.

Explore the level of organization within the company of your software supplier, including the corporate culture and policy, main values of the company, and ranges of software development services they provide.

The development team has to focus on your particular needs and requirements, first meeting all your demands and expectations in the development and delivery stages of your project.

5. Mutual understanding is pivotal

Mutual understanding is the key to success in cooperating with your outsourcing software vendor. You need to ensure that all terms you use have the same understanding in your company as well as in the company of your software partner.

You need to share the values, and priorities and have a common goal, aiming to build a highly functional software product for your businesses within the budget and timelines you outlined in the beginning. Furthermore, you are to demand transparency in all aspects of the development in order to build trusting relationships with your software supplier.

FAQ

We recommend completely exploring the potential outsourcing vendor – proven experience in working with startups and the completed projects, including their reviews from users if this info is available. In addition, ensure the relevance of their technologies according to your project requirements, testimonials from past clients, and online presence.
The cost of the software product for your business is impossible to count precisely. It depends on many factors based on the problems and requirements of your company at the moment. Surely, the outsourcing partner will provide you with the project estimation, but you need to be ready for its changes in case the project scope scales.

Benefits to partner with Altamira

Our company works with businesses of different sizes and industries starting from the funded status to the enterprises. However, we primarily focus on helping startups and medium businesses to digitize and scale in all meanings – building and scaling software products, extending the inner development teams, or providing the entire outsourcing development teams.

All our portfolio projects have been successfully done remotely thanks to our experienced business analysts, project manager, and developers. We know our values and originality as clients and their problems are of the highest priority for our company building efficient outsourcing teams and launching the software products faster than other outsourcing suppliers. Reasonable costs and fast time to market are the two pivotal conditions for startups to launch the software solution successfully.

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Due to my Master`s Degree in journalism, I focus on the details while doing the research on the topic. My particular curiosity is about the latest mobile app developments that start in 2015 that make life easier and save much time to spend it more productive. I am an expert in reviewing and consulting web projects related to web applications, especially if they are connected with wearables.
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