Should a Startup Outsource their Software Development

Gimena Aguerreberry
June 18, 2021

As a startup, you typically have a dozen different things to worry about and not nearly enough hours in the day to handle them all. Software engineering, by all intents and purposes, is a necessary function for many small businesses regardless of niche or industry. From designers and coders to back-end developers, a software engineering department typically needs a handful of people to be quick, efficient, and productive.

IT outsourcing is what helped many Startups to get on top.

Every startup in the course of its lifecycle faces numerous challenges. Startups are difficult, there are very few startups that become successful. A lot of things have to be managed and then developing software can be a task that may not be something that the startup can manage. Hiring an in-house software developer may be expensive as well as time-consuming.

Outsourcing the work of software development to some other firm can not only give the startups the perfect kind of software but will be more convenient and less expensive as well.

Outsourcing the workload of developing software for a startup to some top software development company can be a better option than hiring a team of in-house software developers.

Why Should a Startup Outsource their Software Development

Cost Effectiveness

According to Mark Growth, 46% of the startups fail because they run out of funds and to solve this problem almost a quarter of all the new companies outsource their development to save money

With outsourcing, you pay a one-time fee (or fixed monthly fee, depending on the length of your project) for the services you require. Upon completion, the contract is fulfilled and you no longer have to pay anything once you have the finished contract.


Outsourcing also offers you tremendous flexibility. By outsourcing all your software engineering needs to a nearshore team, you have the freedom to pay for only as long as the project runs.

Once it ends, you also have the freedom to work with a different outsourcing company (especially if you weren’t a hundred percent satisfied with the outcome) or pick and choose the developers that you particularly liked (especially if they stood out to you) for future projects.

Time Saving

Outsourcing your development process needs saves you just as much time as it does money. Aside from completely eliminating the need for traditional hiring methods (which can take anywhere between two weeks to two months), outsourced software engineers can typically deliver the product faster than in-house teams simply because they have the numbers advantage and the experience to pull it off quickly and efficiently.

Any outsourcing company worth its salt that specializes in software development and engineering will no doubt have dozens of seasoned engineers on their team, capable of hitting milestones before the estimated deadline and delivering a tested, debugged, and fully functional program well before the deadline.

No need for micromanagement

When you assign your project to an outsourcing agency, the project is coordinated by a project manager whose job is, as the name suggests, managing outsourced software development. The project manager takes care of all matters related to your product development and launch and will be your main point of contact for any issues that may arise.

It will be the job of the PM to plan the sprints, set the deadlines, control the delivery, schedule, and prepare feature demos. Changes, suggestions, comments, complaints – you can address them to the project manager and have confidence that the required actions will be taken

When Should a Startup Outsource their Software Development

Outsourcing is now a common practice in nearly every industry. When it comes to the tech field, software application development is the most commonly outsourced IT function, according to Statista.

As with all major decisions in life, the answer to whether or not to outsource requires you to consider a couple of things.

It’s generally inadvisable to outsource software development when:

  • The business has technology as its core proposition

  • The end consumer is technology people

  • The technology is either proprietary or unique in its implementation

In any other scenario, a software project can either be built in-house or outsourced (or possibly a combination of the two), depending on your willingness and other circumstances that might affect your business case.


A quality established agency will have helped build hundreds of startups across multiple industries. You should take advantage of their experience and expertise. A committed software development company will be excited to get involved. They will often challenge your ideas and make your product stronger in the process.

Increasing productivity, improving product quality, and saving costs are only a few of the benefits software development outsourcing has to offer. If you are looking for an outsourcing development team, let us know. We have no doubt that your idea deserves to succeed, too. Don’t hesitate to drop us a line!

"Should a Startup Outsource their Software Development" by Gimena Aguerreberry is licensed under CC BY SA. Source code examples are licensed under MIT.

Photo by Annie Spratt.

Categorized under software development.

We are Sophilabs

A software design and development agency that helps companies build and grow products by delivering high-quality software through agile practices and perfectionist teams.