Startup Product Development: Building In-House vs. Hiring a Software House

startup product development

You’ve got a great idea, and you want to bring it to life. Based on your individual circumstances, you can choose to build a technology product in-house or hire a software house. The best option for you depends on multiple variables.

These can be anything from available expertise, resources, time to market, and more. But it’s not an easy decision because several myths surrounding software outsourcing can cloud your judgment. In the same vein, building in-house always sounds better, but it really depends on the software engineers on-board, the CTO, available budgets, and more. 

To give you a better grasp of what you can expect in both scenarios, let’s explore the advantages and disadvantages of both startup product development models.

The Pros and Cons of Developing with a Software House

Several misconceptions surround outsourcing software development. While busting these myths, it is also essential to look at other benefits. While it’s certainly a cost-effective approach to startup product development, there’s a lot more to it than just cost savings.


Faster time to market

Hiring an established development shop accelerates your time to market. Since they already have a pool of talent to work with, you don’t have to waste time recruiting technical talent. Furthermore, if you nearshore software development to countries like Ukraine, you also benefit from similar cultures, time zones, and geological proximity (if you need to make a quick trip). 

In today’s highly competitive world, what matters the most is access to people with the right skill sets and the company’s ability to hire diverse talents fast enough, as diverse teams are critical to creativity and innovation.

As estimated by Workable, the average hiring time in IT globally is 56 days.

At Evolve, we can staff nearly any client-tailored extended team in 30 days or less depending on project complexity and budget. As a matter of fact, all local staffing agencies source candidates from the same pool as your competitors or industry peers, which means you’ll always be competing for software developers with many local companies. Our R&D In Ukraine allows us to access a vast talent pool that is yet untapped by many firms in the UK, and hire senior-level talent for the cost of junior talent in England.

According to our client Teevid, “The recruitment process takes 4–6 weeks from the moment we provide [Evolve] with the position description.”

The faster you can hire your team members, the faster you’ll deliver your product to market and start making money with it.

No need to invest in building internal expertise and own IT infrastructure

With the robust communication and collaboration tools available today, it’s easy for founders and product owners to control the whole development process from anywhere in the world. When you’re closely involved with your dedicated team through each iteration, there’s little room for surprises or unexpected delays.

One thing you don’t hear about is the benefit of experience. If you hire an established software development partner, you’ll benefit from their extensive experience working with startups. 

In fact, they’ll be able to guide you like a mentor and advise you accordingly whenever you face unexpected challenges. In such situations, having the support of a reliable software house can be priceless.   

Cost reduction

As alluded to above, as the cost of living is cheaper in countries like Ukraine, you get all this, including access to top talent and STEM graduates, cost-effectively. Best of all, your product’s made within Europe, just outside the UK and the EU.

Con: You might read articles or watch YouTube videos about outsourcing nightmares. These usually state that it’ll end up taking more time and costing more. Or you might read that outsourcing comes with the risk of security issues pertaining to intellectual property.

Some of these fears are based on real events. For instance, one of our clients is a UK-based innovative recruitment startup Offerd. Their founder Jamie wasted over £200,000 working with two outsource agencies on his MVP development. As a result of those engagements, Jamie got the code that was unclear and unreadable, and the buggy product that couldn’t be marketed at all. At Evolve, we took Jamie’s project from the ground up and fully rebuilt it with different technologies to make it monetisable.

That being said, all it takes is a little bit of effort on your part to avoid such issues altogether. For example, if you hire an established software development provider with a proven track record, it’ll help mitigate the risk of delays and extra costs. 

As we have the tools and technologies to collaborate closely and remotely, you’re always in control of the project, including costs and time to market. 

The Pros and Cons of Developing Software Product In-House

Some C-Suite executives will champion developing software in-house. While the benefits are certainly there, it’s all relative. 

Software development has evolved considerably, and so have our communication and collaboration tools. This makes it important to take a fresh look at each development model before starting a new software development project.

Pro: It’s a great idea to build your startup product in-house if you or one of your co-founders have the necessary technical expertise to bring your vision to life, or at least go from proof of concept to a minimum viable product

This approach helps minimise all the substantial costs that go into software development. As you’ll be building your startup product yourself, you won’t have to worry about paying a team of software engineers (on par with British standards), offering them benefits or equity, and other HR-related overheads.

If you don’t have the necessary technical process, you’ll need money. If you have considerable funding, you can set up shop, recruit a team of software engineers and get to work. After all, developing software in-house puts you in total control of the whole project. 

But in a post-pandemic world where many of us work from home remotely, it’s now clear that you can exert the same level of “control” in a remote development environment with an in-house or outsourced external development team.

Con: If you don’t have the technical expertise or the funding to build the product yourself, your startup will probably fail. With the ongoing tech talent shortage in the UK, recruiting technical talent can quickly get expensive. 

One way to get around this problem is to offer equity, but that’s not always easy. For example, software engineers would have to really buy into your idea. Strongly believe in your vision to give up their high paying jobs and focus on your startup idea.

Whether you choose to build your digital product in-house or with an external software house, the key here is to get past the myths and misconceptions and make an educated decision on the best way forward. 

Do you have a great idea that you want to bring to life? Schedule a commitment-free consultation, and we’ll be happy to share our experiences with you.

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