Startup outsource software development: How and when to do it?

Nowadays, outsourcing software development has become the new normal. In case, your internal software development team is overburdened. So software outsourcing development is the great way to build a remarkable product. It enables you to get greater economies of scale. Besides that, it also helps to focus on your core strengths without investing a lot of time and money. However, when it comes to outsourcing app development, many tech startups are filled with doubts and questions. For that reason, this blog will bring you useful information about Startup outsource software development: How and when to do it? So, without any further, let’s get started.

What is Outsourcing?

Startup outsource software development

Outsourcing has been an amazing gift for hundreds, if not thousands, of entrepreneurs, business owners, and startups. Outsourcing means hiring fully experienced employees on a temporary basis for one or two projects. Another way, it means temporarily hiring an independent third party to handle the activities for which you do not have the time or expertise. Therefore, all you have to do is inform them what you want and answer any questions they need. That’s all. You don’t need to monitor each hour and every step of the way (if you want to). When they have completed their responsibility, the contract is terminated. As a result, you completely stop paying for their services until you require them again.

However, with an in-house software team, you must pay them each month, whether they work a project or not. Your startup’s finances may be limited, but they should be used for business stability and growth. Therefore, spending some of it on people who haven’t worked each month due to a lack of available work seems unworkable.

Why is startup outsource software development important?

Startup outsource software development

Therefore, outsourcing development is faster than in-house development. Because you don’t need to rent an office building, set up the entire development facilities, and gather a professional team. But what are reasons for a startup outsource software development? If you have a similar question, you can take a look at the following points to decide whether hire offshore developers or not

Availability of an excellent talented employees

Working with outsourcing development, your project will have the opportunity to access a huge pool of superior talent around the world. Thanks to software outsourcing, you can widen your technological capability by various software outsourcing models such as onshore, offshore, and near-shore.

You are not limited by your geographical location when you outsource software development. Because your main criteria should be the team’s skills and professionalism, not their location.

Cost effectiveness 

According to MarkGrowth, nearly 46% of entrepreneurs fail due to a lack of funds. As a result, one of the goals of a startup outsource software development is to save money. The timeframe of software development and the hourly expense of developers account for a significant portion of the development budget. So, before deciding on a software development model, find out what the best developer hourly rate is.

In developed countries such as North America, South America, Europe, or Australia, a nearshore or onshore outsourcing model may be costly for overall development. On the other hand, offshoring to countries like the Philippines and India may be the best way to reduce your overhead costs.

Complete control of the project

When compared to an in-house development team, outsourcing software development can gain greater control over your project. Furthermore, a  software outsourcing company understands how to assess your business the best. Moreover, a software outsourcing company can assist you in designing your solution to make it the most appropriate. Because it will consider your business size of your organization, your target market, the appropriate technology type, and how your solution will operate in the future.

Reduced time to market

Global technology firms have recognized the value of speed in gaining a competitive advantage. Thus, you don’t need to depend on your in-house development team to release your product when you choose a startup outsource software development. Furthermore, in case you hire remote developers for your project. So you will save time on project management. As a result, you will get a shorter development time and a faster time to market.

Besides that, thanks to software development outsourcing, you can set your own timelines. Not only that, you also can extend a dedicated development team at your leisure.

Time management

Collaborating with an offshore development team can save your business a significant amount of time. In contrast, hiring an in-house group, your employees already know each other and how to collaborate.

When you hire new software professionals, you must invest a significant amount of time in training and introducing them to your company’s culture, atmosphere, and technology.

You will save time if you assign the hiring process to an offshore company rather than starting from scratch in your own company. Moreover, the outsourced company has extensive industrial experience. Therefore, it is easier for them to complete their job effectively.

There is no need for micromanagement.

When hiring an outsourcing company for your project, a project manager oversees the entire process. Your product and development are oversee by the project manager. Besides  that, they will be your first contact point if there are any problems with your software development.

In addition, the outsourcing software development firm will sign the contract. This contract will tie them to all of your terms. Furthermore, they are not permitted to duplicate your product or service and resell it elsewhere. Additionally, there is a solution if an issue comes during developing your software.

Cons of Outsourcing software development

Startup outsource software development


The goal of freelancers (and agencies) is to make money. While your goal is to reduce the product as much as possible. However, freelancers and agencies may pressure you to build something larger than you require.


It is not possible for freelancers or agencies to follow the industry standards for project organization and documentation. Therefore, they will be the only people who keep your castle’s key. So, if you outsource software development, make sure the company follows all relevant standards!

Difficulties in communication

When outsourcing software development, several communication problems can happen, especially while nearshoring and offshoring. A language barrier can be one of the hidden costs. Pronunciation, vocabulary, grammar, and accent are all factors that can create barriers, Moreover, it may happen between native and non-native English speakers.

Furthermore, time zone differences are another difficulty. Unless the software development agency or you are willing to work non-traditional hours, you risk being left having to wait for responses. 

In addition, You should consider communication technology. However, the   advanced platforms like Zoom, Google Hangouts, Skype, and others are, they are never completely reliable. 

Risky Agreement

In case, you want to collaborate with other parties in the future. So you have to make sure your agreement allows you to bring your code to new players. Besides that, another thing for you to careful is all Intellectual Property specifics. You don’t want to use someone’s code and prevent your business!

Should use the startup outsource software development or not?

To answer this question, you must first break that complex question down into smaller steps.

STEP 1:  Is technology a part of the product’s core value proposition? Is it a vehicle for meeting a business need?

Most startups have one of two possible responses to this question:

  • The main selling point is technology.
  • Technology is a tool to solve a business problem.

Overall, if your company falls into (1), you are more likely to develop the solution in-house. If the answer is (2), your startup should most likely outsource software development.

STEP 2: Who is your target audience/buying customers?

Typically, the answer can be summed up as:

  • Our product is intended for technology specialists and developers.
  • Our product is intended for both consumers and business customers.

STEP 3: Does your product have a unique technology ?

This means that either the technology itself is private to your startup or the manner in which it is implemented is unique.

Case Studies from successful businesses


This is a multibillion-dollar corporation, outsourcing software development to a company in the United States.

The Alibaba case demonstrates that startups come in all shapes and sizes. Not every company is co-founded with the right tech person from the start. For various reasons, this business decided to outsource software development at the start of their journey.


Upwork has mostly been built by contractors. 150 of their 200 product and engineering workers will be hired on a freelance basis. By doing so, they were able to benefit from the world’s best talent. While they also show the importance of their project. This type of self-fulfilling advertising is both inexpensive and brilliant.


Skype outsourced the development of its platform to an Estonian trio of developers. Niklas Zennstrom and Janus Friis are the company’s founders. In 2003 they demonstrated that international freelance cooperation was not a doomed venture, as many believed at the time.


WhatsApp was founded with only a quarter-million dollars in capital. Therefore, its goal is keeping operational costs to the minimum. It would have been impossible for them to grow from their Mountain View base. As a result, they began to look into Russia, where co-founder Jan Koum recognized some of the world’s finest offshore developers were operating.


According to TransferWise, they don’t need offshoring, outsourcing, or use consultants.” However, they confess to an amount of “independent workers” who are developers mainly from Ukraine. Some startups said that outsource software development prefers to give their customers an in-house “vibe.”


The reasons mentioned in this article should have clarified why you should hire Startup outsource software development. Outsourcing software development can make sure startups that the product will meet market standards and complete on time. With the right outsourcing partner, you can gain access to a large knowledge and skill set. This allows you to achieve top results within a short time. Therefore, ArrowHiTech is definitely the perfect choice for your startup outsource software development. Our Software consulting and Outsourcing development services will bring success into your business. Therefore, all you need to do is fill your information into this CONTACT FORM. And our experts in this aspect will contact you as soon as possible. 


Android ecommerce app: The comprehensive guide to build it successful at affordable price

Technology stack for mobile application: The different types and how to select the best one for your app

How to create a social media app: The comprehensive guide to make successful