Mary Yasensky Delivery Manager

    Startup Product Development: Why You Should Hire a Team

    Finding a high-performing startup development team to implement a software project is always a challenge. For a startup, the challenge gets even more difficult than for an established firm due to budget limitations, small HR experience, and lack of defined work culture. In some cases, the cost of making a mistake when searching for developers can get too high and lead to a startup’s failure. On the other hand, the results of collaboration with skillful and enthusiastic developers can exceed even high expectations.

    Since 2011, Surf has helped companies of all sizes in building high-performance, secure, and stable digital products. With a portfolio of projects spanning from fintech to m-commerce, we offer extensive expertise in partnering with firms on any project stage. In the article, we’ll review the basic models of cooperation with an outsource development team, what roles it should include so that you can find the effective match to implement your idea.

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    In-house vs outsourced startup development team

    Two ways are available to go about startup product development: form your own in-house team or outsource developers for your project. The in-house development provides unparalleled control over the workflow being cheaper in the long run. But as startups don’t focus mainly on custom web or software development, the outsource model brings multiple benefits. Among them:

    Cost-effectiveness. Creating a team of developers within a startup requires time and money for numerous secondary activities, such as setting up the recruitment process, and managing other HR tasks (sick leaves, benefits, vacations), renting additional office premises, and establishing a strong working culture. On the other hand, partnering with a reputable outsource company makes it possible to get down to development faster, since things described above are handled by the company.

    Flexibility. For startups that operate on tight budgets and in highly competitive market niches, flexibility is essential. An ability to quickly change the tech stack, scale down operations or adjust the product concept can help a company to survive in the early stages and eventually grow. All of these are easier when the startup relies more on outsourcing than in-house engineers: there are no painful layoffs for those who are no longer needed and the onboarding of those required to join the project is faster.

    Talent availability. The outsourcing model makes it easier to use services of the developers from overseas — a startup doesn’t have to worry about a complex wage payment process for every employee abroad. This opens possibilities of partnering with offshore programmers located in Eastern Europe and Southeast Asia who often have hourly rates 1.5 – 2 times lower than programmers from the EU and US while being known for high IT skills and code quality. However, this and other benefits can be nullified if the offshore team is poorly organized, which highlights the importance of picking a development agency with proven track record delivering projects on time.

    development rates
    Software developers’ average rates worldwide

    Models of outsourcing models

    Having reviewed the main differences between outsourcing and in-house developers, let’s take a closer look at the two main outsourcing models: staff augmentation and dedicated team.

    Staff augmentation

    The staff augmentation model is used when a startup needs to add custom specialists quickly. For instance, a business starts a new product and looks for additional Golang developers to speed up the backend development. Since the company would hardly need them after a few months of active development, outsourcing is more cost-effective compared to hiring in-house. Another widespread case for using staff augmentation is getting extra staff during periods of increased business activity linked to seasonal fluctuations or a new service launching overseas.

    All things considered, staff augmentation can be a great option to strengthen an existing team of developers or expand its expertise in certain areas at relatively low costs. Nevertheless, it is vital to be aware of the model’s limitations as well. First of all, bringing on board standalone external specialists for roles that require considerable time for adaptation and getting internal knowledge is not the best application of this approach. Also, staff augmentation leads to an increased project management effort, as the developers have to be trained and managed along with in-house employees, which is the key difference between the augmentation and dedicated team model, which we’re going to review next.

    Dedicated team

    This model means outsourcing a complete team of developers to build custom software. It is 9in the greatest request among providers of the development services as well as among tech startups that plan an app or a web service for customers. 

    While similar to staff augmentation in such aspects as flexibility and speed, the dedicated team model allows startups to create an entire project outsourcing specialists rather than just filling in temporal gaps in talent. In addition to developers, dedicated teams include other specialists. For example, the Surf development team includes a project manager, QA specialists, UX/UI designers, business analysts, and others. All of them have proven experience and skills, established working culture and managers to control their daily workflow, so a startup can focus more on its key operational issues. While more expensive than staff augmentation, this model is infinitely more suitable when you have to outsource engineers to completely handle a custom stage in development or even the entire process. 

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    Startup development team roles

    Who shall belong to a dedicated team? Since the exact set of roles is defined by the project’s requirements, in this section, we’ll review the most common team members required for startup development.

    • No digital project is possible without developers who write code with programming languages, designing both front-end (user mobile, web, and desktop apps) and back-end (server, integrations, databases) parts of the software. 
    • The work of UI/UX designers defines how the future app looks and feels. They create the app’s interface and screens, assuring they are functional, provide great UX, and are in line with the brand’s visual guidelines.
    • Business analysts research the company’s niche and competitors, create customer profiles, and customize the app’s specifications to align them with the interests of all shareholders, as well as the budget and timeframes.
    • The task of testers is to find any bugs and errors in code and prevent them from ending up in the public release version of the code, while QA specialists focus on the software’s achieving the desired level of quality.
    • The role of tech lead is necessary for the effective work of multiple developers. Their area of responsibility covers establishing communication among a project manager, startup management, and developers, as well as making executive decisions on the tech stack and app architecture.
    • Deployment specialists ensure that the app has no conflicts with hardware and other software and end users won’t have issues installing and using it.
    • Project manager coordinates the whole team, assigns tasks, monitors performance, and reports on the progress. They keep the work within the company’s budget and timeframes.
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    Cooperation models: fixed price and time & material

    In terms of pricing, there are two main models of cooperation between a startup and outsourced developers.

    Fixed price model

    In case with a fixed price model, the developers agree with a client on the exact list of features, their specifications, and pricing before the development starts. Any additional works and adjustments that incur during development require a thorough agreement process with the client. While this model can guarantee a startup won’t go over the budget during development, its lack of flexibility can be a disadvantage for sophisticated software in the modern high-paced digital landscape where new technologies emerge and customer tastes change daily.

    Time & material model

    Time & material model is a concept more oriented toward delivering a final result properly rather than creating a fixed set of features. It is a pricing model commonly used by Surf in its projects. It allows flexibility to adhere to the client company’s vision and create a fully custom app in line with current trends and market demands.

    A development company provides a top-level estimation of the software, breaking it into sprints or phases, with each of them bringing a meaningful feature or functionality to the app. After each stage is completed, the client pays its actual costs, while any minor deviations from the initial plan or extras can be developed without a lengthy agreement process. The time & material model is better suited for developing an entire app with complex functionality when it is impossible to envisage every detail (a button or hardware support) during the initial estimation.

    development time&cost table
    An example of an e-commerce app features development estimation

    Summing things up

    There are several options on how to hire developers for software creation. Compared to hiring in-house, outsourcing developers is beneficial for a startup that plans to develop an app once and then maintain it, focusing on its core area of business. In outsourcing, the staff augmentation model can be used for short-term tasks or finding a specialist with specific expertise, while a dedicated team model is best for handling the whole development process.

    Having extensive cross-industrial expertise and a diverse portfolio of custom web, desktop, and mobile apps, Surf provides high-quality app development services and assists companies throughout the app creation process.