Table of Contents

How to Outsource Software Development for Startups

Table of Contents
How to Outsource Software Development for Startups

Should startups outsource their software development? Well, more and more companies are doing it, especially since the pandemic hit. In 2019, the global outsourcing market was huge – $92.5 billion! And guess what? Over half of all companies now use outside teams to help with their customer services.

Outsourcing is when a company gets an outside team to do work for them. This could be anything from handling certain tasks, running parts of their operations, to doing specific jobs like making software.

Why consider outsourcing? For starters, it can cut down a lot of stress. Things like worrying about your team getting too tired, missing deadlines, or losing out to competitors become less of an issue. It’s also good for your wallet. You won’t have to spend on stuff like office space, fancy equipment, or even coffee breaks.

How do you pick the right team to outsource your software development to? Let’s dive into what makes a good choice and what doesn’t when it comes to outsourcing this kind of work.

Outsourcing’s Popularity in Startups

In today’s fast-moving startup world, being flexible and innovative is key. More and more startups are turning to outsourcing as a smart move. It’s a trend that’s catching on in all sorts of startups, big and small, across different fields. A survey by Clutch in 2019 found that 37% of small businesses had started outsourcing some of their work. Plus, another 52% were thinking of doing it the next year.

Why are startups choosing to outsource? Well, it’s got a lot of benefits. It can save money, give access to expert skills, make things more flexible, and help get products out there faster. For startups, especially those watching their budgets, cutting costs through outsourcing can be a big help. It lets them spend money on growing their business and reaching their big goals.

6 Big Startup Challenges and How Outsourcing Helps

Startups face some common problems, but outsourcing can be a great solution. Here’s a simple look at what these issues are and how outsourcing tackles them:

Finding top talent

Startups often struggle to attract skilled workers who usually prefer the perks of big companies. Outsourcing lets startups work with top-notch talent from around the world, to solve this issue.

Training junior developers

Startups don’t have the time or resources to train newbies. By outsourcing, they can hire experienced developers at a cost similar to local juniors, getting a team that’s ready to start and easy on the budget.

Avoiding team burnout

Startups can be tough on teams, leading to burnout from too much work and stress. A good outsourcing company can advise on the right team size and work balance, helping keep everyone happy and productive.

Handling investor hiring demands

Sometimes investors want to control hiring but don’t understand the needs. Outsourcing solves this by bringing in expert teams with proven track records, making investors feel confident about the project.

Speeding up hiring

In-house hiring can take ages, which isn’t ideal when you need to start fast. Outsourcing gives startups quick access to a pool of experts, saving a lot of time.

Setting realistic goals

It’s easy for non-experts to set goals that are too high. Outsourcing firms can step in with a plan and strategy, like ProCoders’ ‘Discovery Phase’, to keep things realistic and on track.

Key Outsourcing Approaches for Startups

Let’s look at the top three outsourcing models startups use

Fixed price contract

Imagine a startup brimming with ideas but lacking in technical expertise and operating on a tight budget. In such cases, they can seek help from outsourcing companies. These companies create a detailed plan covering costs, timelines, and marketing strategies. If the startup agrees, the project kicks off. Adjustments are made if needed, but the original cost and timeline remain unchanged. This method is useful but carries risks, such as additional costs due to unexpected changes. Choosing the right outsourcing partner is crucial for startups.

Dedicated team

Having a dedicated team means working with a group committed to your project from start to finish. This ensures that the team fully understands and meets the startup’s expectations. However, depending solely on one team might limit the project to their specific set of skills. In the event of unique challenges, seeking additional help might be necessary.


Freelancers are a budget-friendly option for startups, offering flexibility and less operational hassle. They manage their equipment, reducing the startup’s logistical burden. However, there are challenges, such as uncertainty in project completion and maintaining consistent quality. As the startup expands, coordinating a growing number of freelancers can become complex. Therefore, it’s important to balance the advantages of freelancers with these potential difficulties.

Mistakes in Outsourcing Software Development and How to Overcome Them

For startups where every penny and time are precious, getting outsourcing right is critical. One common mistake is not having a quality assurance expert on board. Without this, your software might be full of bugs. If a full-time quality checker isn’t possible, consider hiring someone part-time to avoid this pitfall.

Another error startups often make is setting goals that are too vague or ambitious. This can lead to stress and unnecessary costs. Collaborating with your outsourcing partner to set realistic goals can help keep your project on track and within budget.

A lack of a clear plan can also cause issues. Without a solid workflow, including clear communication and defined roles, you might face delays and confusion. Using project management tools can help avoid these problems by keeping everyone updated and making necessary adjustments.

Overspending is another common issue for tech startups. It’s crucial to create a budget-friendly product without compromising on quality. Working with financial experts at your outsourcing company can help you plan your spending effectively.

Lastly, underestimating the impact of time zone differences with international teams is a mistake. However, many outsourcing companies adjust their working hours for better communication, ensuring your project progresses smoothly.

How To Select Your Outsourcing Partner

Looking for the right outsourcing partner for your startup? Here’s a simple way to do it:

1. Start with Research

  • Make a list of potential partners who can help your startup. Ask other businesses and do some digging on each option.
  • Check out online lists for names and info about outsourcing companies. Sites like Goodfirms,, and SoftwareOutsourcing are good places to start.

2. Get to Know Them

  • Once you have your list, learn more about each company. Look at their history, what they stand for, and how they do business. See if they fit well with your startup’s style and values.

3. Five Steps to Narrow It Down

  • Reach out: Talk to each potential partner. Tell them what you need and listen to what they offer.
  • Model check: Make sure they can work the way you want, whether it’s about location or contract details.
  • References: Ask for and talk to other businesses they’ve worked with. This gives you a real idea of what they’re like to work with.
  • Talk money: Get price quotes based on what you need. This helps you compare and decide.
  • Decide wisely: With all the info and quotes, pick the best one for your needs and budget. Remember, you often get what you pay for in terms of quality.

That’s it! Following these steps will help you find an outsourcing partner that’s just right for your startup.


Choosing to outsource software development can be a great strategy for startups. It’s all about saving money, having access to expert skills, being more flexible, getting to market quicker, and reducing risks. If startups make this decision carefully, it can help them tackle their unique challenges better. This way, they can grow more effectively and make a strong place for themselves in today’s competitive business world.


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