John Harlan, 8 months ago
You couldn’t fall asleep for nights on end. You thought of the best idea in the world and it didn’t matter the barriers that stood in your way, you had to see it through. You quit your job and have spent countless hours researching, reading, learning, writing and pitching to (a select few) individuals. Your audience is enthused and your mom thinks you’re a genius. You called up rich uncle Ted and he stroked you a check for $250,000 (with just a few strings attached). You are finally free to go chase your dreams and it’s just a matter of time until you’re invited to Y Combinator and you become Chris Sacca’s next success story.
It’s a fun narrative, but realistically, this is the story of a lot of young entrepreneurs. There is no feeling in the world like chasing your dream. The only hiccup in this story though, is that most startups fail rather than succeed. There is nothing wrong with failing. Every successful entrepreneur will tell you that it’s imperative to take failure in stride and learn from its lessons if you ever want to really succeed. To prove my point, check this out.
A significant and determining factor of success for young companies is whether they choose to hire or outsource technology resources for product development. It’s a TOUGH question to answer. Should you hire a technical CTO or outsource the development of your product to a dev shop? How the heck should you know, right? The purpose of this article is to dig deeper into the pros and cons of each of these choices.
So let’s dig in.
Naturally, you want control. By hiring a full-time developer you have complete control over how they spend their time and full transparency on what they are working on. There are countless horror stories of startups spending hundreds of thousands of dollars with a dev shop, only to have that shop outsource their work to the Middle East/India. Often times the directors of these dev shops are not even technical - this is a travesty. If you do go the dev shop route, take your time, call references and do your homework before signing on the dotted line.
By keeping the development in-house, you are cutting out the middleman. You are not paying the marked-up rate of a dev shop for the same developer. This is very appealing to most startups that are overly cost-conscious. On an hourly basis, having a full-time employee is more economically efficient. The main issue here, though, is scalability.
There is no doubt that hiring a dev shop is a more scalable solution than keeping the development in-house. A dev shop can throw five developers at an app, go full speed on the project through deployment and then immediately scale the team back. This a luxury that is sorely missed by companies that hire an in-house dev. Your in-house dev is always there, by themselves, whether you need them or not. Having one person building an entire application typically leaves you either under or over-resourced. When you need 5 devs, you only have 1 and when you want to tighten costs and shrink technology spend, you can’t. They are still there.
It’s hard to hire a good developer. There are somewhere around 4 million developers in the U.S., but there is a far cry between a good and a bad developer. Developers are not a commodity and finding the good ones isn’t easy. Not only is it difficult to find a developer, but finding a developer that can do everything that you want to do may be just about impossible. “Can’t the same guy just build the server, client, iOS and Android apps?” Hell to the no. Finding the dev that can take all of that on is about like finding a box of gold under that floorboard that you pulled up in that old house you broke into as a twelve-year-old. And if you were to find that dev, they will, in fact, break your bank [unlike the aforementioned gold]. This is just one more instance where the scalability and variability of working with a team, rather than an individual, pays off. If you are planning on building a mobile app in addition to your web app in the somewhat distant future, go find a good dev shop to work with.
Experience/Likelihood of Success
You will make mistakes. Everyone does. It’s just part of it. The goal is to make more good decisions than bad decisions. If you can do that, you’ll survive. At CrateBind we have worked with tons of companies across multiple industries and we have been able to sit back and watch companies come up with their own ingredients for success. We have learned so much by watching companies figure out how to succeed. With this accumulated data and understanding, we are able to foresee and help mitigate potential issues for our clients. In the end, this saves our clients tons of time and resources. With the right consultative dev shop, your team gets to lean into years of much needed experience.