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Not Sure About Outsourcing Software Development for Startups?

Waleed Riaz 29-Aug-2023
Not Sure About Outsourcing Software Development for Startups?

If you heard that your competitor is relying on outsourcing software development for startups services, chances are it’s the truth.

Many budding businesses are relying on outsourcing partners to get their software products quicker to the market among other benefits. So, maybe it’s time for you to follow suit.

The Basics of Outsourcing Software Development for Startups

Outsourcing software development for startups entails hiring external teams to create software products, reducing costs and leveraging specialized expertise. This service enables your business to focus on core business operations while accessing a global talent pool.

The Power of Outsourcing App Dev in Numbers

Outsourcing app development is quite common and in demand more than ever. In fact –

  • Statista estimates software outsourcing to reach $430 billion by 2023. This will further grow by 7.54% come 2027.
  • A Commit survey predicted an increase of 70% in outsourcing software development for startups between 2022 and 2023.
  • Outsourcing can help startups with budget constraints. In fact, 87% of US companies outsource software development to save around $98,000 a year per resource.

How Startups Benefit from Outsourcing App Development

Startups can gain a lot from outsourcing their app development work. Some of the top advantages that come to mind include:

  • Cost Savings – Outsourcing often provides access to skilled professionals at a lower cost compared to hiring in-house teams. This, in turn, reduces operational expenses.
  • Expertise and Specialization– Your startup get to tap into the expertise of experienced developers and teams offshore. As a result, you gain access to a wider range of skills and technologies.
  • Time Efficiency – Outsourcing software development for startups accelerates project timelines, Therefore, your business can bring its products to market faster and stay ahead of the competition.
  • Scalability – You can easily scale up or down development resources depending on your requirements. Therefore, you can adapt to changing project requirements and business growth.
  • Reduced Risk – Outsourcing partners often have established processes and quality control measures that can minimize development risks.
  • Access to Global Talent – Outsourcing software development gives startups access to a global talent pool. This means you can find the right skills and experience for your projects.
  • Flexibility – You can choose the level of control and involvement you want in the development process.
  • Innovation – Outsourcing partners may bring fresh perspectives and innovative solutions to enhance the quality and functionality of your software products.
  • Reduced Overhead – By outsourcing, you can eliminate the costs associated with setting up and maintaining in-house development infrastructure.

Examples of Successful Businesses that Relied on Outsourcing Software Development for Startups

If you’re still iffy about whether outsourcing is the right decision for you, here are some case studies to help you make up your mind.


WhatsApp initially outsourced a significant portion of its iOS app development. This allowed the company to quickly build an iOS version of their app while focusing on other aspects of their business.


The Chinese e-commerce giant outsourced its website development initially to a US based firm Liu Shiying and Martha Avery would later write –

“At the time, overseas development talent was still in short supply. The US had the skills Alibaba needed to compete with e-commerce giants like eBay and did it all behind the Chinese internet restrictions.”


The freelancing platform is one of the successful case studies for outsourcing software development for startups.

In fact, 75% of the product and development team were freelancers. So, not only did Upwork get work done, it benefited from self-fulfilling advertising.


Slack, a popular team collaboration platform, initially outsourced its app development to a design and development firm called MetaLab.

The latter created the app’s user interface and experience, which played a significant role in its early success.


Skype, the communication platform, outsourced much of its early development work to Estonian developers.

This strategy helped Skype achieve rapid growth and global adoption before being acquired by eBay and later Microsoft.


A widely-used platform for software developers, GitHub outsourced its initial development work.

The company worked with an external development team before building its own in-house team.


This Swedish fintech startup outsourced its app development work to build its payment processing platform faster.

While it brought more development in-house in the future, it continued to collaborate with external partners.

Should You Really Outsource Your Software Development Work?

If you’re expecting a resounding ‘yes’, you may be a little disappointed when you find out that the answer is ‘depends’.

There are two questions you need to ask yourself before hunting for reliable outsourcing partners.

#1) What is technology to your startup? Is it a core proposition or means to solve a business issue?

If tech is a core proposition, you may decide to develop it in-house. On the other hand, if it’s a solution to some issue, you can consider outsourcing it.

#2) Is your tech unique in its implementation?

If your tech product requires a secret sauce of sorts to make it unique, outsourcing it may be a little difficult. You may want to consider how this impacts your business case and go on from there.

How to Get the Most from Outsourcing Software Development for Startups

After answering the above questions and realizing outsourcing can benefit you, it’s time to find the right partner for you. So, here are some tips to effectively outsource your software development.

Define Clear Objectives

Clearly define your project’s objectives, scope, and requirements. This will help you communicate your vision effectively to the outsourcing team.

Select the Right Partner

Select an outsourcing partner with a strong track record and relevant expertise. Request details on their past projects and client reviews. You can also carry out your own search for peace of mind.

Test Your New Partner’s Expertise with a Small Project

Begin with a smaller project or a pilot phase. This will help you assess the outsourcing team’s capabilities, communication, and quality of work before committing to a larger project.

Set Clear Expectations

Establish clear expectations regarding deliverables, timelines, milestones, and communication channels. Together with your partner, you should create a detailed project plan or roadmap.

Don’t Neglect Communications

Effective communication is a must for the success of outsourcing software development for startups.

Maintain open and transparent communication with the outsourcing team. Regular updates, meetings, and feedback sessions are crucial for project success.

Discuss Intellectual Property (IP) Protection with Your Tech Partner

Clearly define IP ownership and protection in your contract. Ensure that your startup retains control and ownership of all developed code and assets.

Be Ready to Provide Feedback and Review the Work

Provide constructive feedback and conduct regular project reviews. This helps in making necessary adjustments and improvements.

Find Out About Post-Project Support

Plan for post-project support and maintenance beforehand. Ensure that the outsourcing team can provide ongoing support and updates if needed.

Ready to Outsource Your App Development?

Outsourcing software development for startups has never been easier. In fact, you can start your journey instantly by connecting with our team via the form below.

We offer both offshore and outsourcing options to help your startup grow. Our teams also have the experience and expertise your business needs, as well as love for a challenge.

So, contact us today so we can start taking your IT to the next level.

Waleed Riaz
Waleed Riaz

A decade-long experience of working with entrepreneurs (from Silicon Valley to Stockholm) consulting them in IT and operations, facilitating them from inception to growth and exit. 20+ years in software project management, account management, and operations management.

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