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Why Nearly 1 in 3 Tech Startups are Opting to Outsource Their Tech Development

With more and more non-technical founders launching tech startups, and a seemingly bottomless pit of investment capital, they are all confronted with the same age-old question - whether to bring their tech in-house or whether to outsource their tech development, either internationally or domestically.


Of course, most startup CEOs or Founders start by hiring a freelancer, typically off-shore, but with significant language barriers, a complete disparity of quality, and an overwhelming feeling of wasting money, the more experienced Founder is left with two options: to bring on a full-time CTO or to work with a professional software development company.


With any hiring decision, there are always risks associated. However, when it comes to hiring a full-time CTO/ Co-Founder, there can be enormous single-person risk and finding a suitable partner can prove to be almost impossible.


So, what are the benefits of working with a professional Software Development Company?


Lower Costs


Because many startups don't last due to financial issues, outsourcing can be the best method for limiting operational expenses and money lost due to employee attrition.

An outsourced software development team saves money and time in various ways. There's no need to go through the traditional hiring process or incur the overhead costs associated with new, permanent hires. Furthermore, the outsourcing partner you choose is responsible for selecting the most qualified job candidates, providing them with the tools they need, and having replacements available if a team member unexpectedly leaves the project.


Lower Risks


Working to meet other daily objectives while creating software delays the development process. As a result, team members may cut corners and overlook critical details to meet deadlines.


Your company will benefit from a team that focuses solely on software development because internal team members often have numerous tasks to meet each day, which can be distracting and lower team productivity. Outsourcing software development brings in a team that can work with no distractions throughout the development process, ensuring a high-quality product that will be delivered on time.


The service level agreement between you and your outsourcing provider also mitigates risks by setting the terms for deadlines and the expected outcomes of the project. This leaves little room for surprises and gives both companies more insight into the amount of time and resources that will go towards software development.


At Iron Forge, we have created a fixed project guarantee, meaning that your tech is guaranteed to look and work exactly how we designed it. This significantly reduces the risks associated with building your technology and can be the difference when it comes to being successful when fundraising.


Hit the Market Faster


The ultimate goal of any software development team is for a successful product to hit the market in a reasonable time frame. This product must be fully functional on the backend and provide an exceptional user experience to attract customers and increase brand loyalty.

Software development is time-consuming as it is not an entirely linear process and complications are a part of eventual success. Developers must build the code, test, then retest and rebuild for high-quality performance with reduced security threats.


Incorporating hiring, training, and onboarding adds considerably more time to the process when working in-house. However, outsourcing software development exposes your company to well-trained teams that are dedicated and understand the necessary methodologies to complete a project effectively while adhering to deadlines. In fact, many outsourced teams are now embracing agile techniques to streamline the development process and encourage collaboration.


Access to Worldclass Talent


Internet connectivity has led to the globalization of the workforce, increasing hiring options and access to top talent worldwide. Therefore, the physical location of your business is no longer restricting because you can choose an outsourcing company nearshore or offshore for software development.


Depending on where your outsourced team is located, be mindful that different time zones can become an issue when scheduling and attempting to communicate in real time. Still, significant time zone differences aren't always a disadvantage. Some companies let time zone differences work in their favor by scheduling outsourced staff during the hours that internal teams are off the clock to keep the development process going 24/7.


To ensure all teams stay updated on progress and changes during development, instant messaging, video chats, and traditional means of communication (such as emails and telephone calls) eliminate silos and keeps everyone on the same page regarding development. This limits confusion and the possibility of errors due to miscommunication.


Additional Benefits


As a startup, staying within the company budget while creating a valuable product is critical to success. Outsourcing software development allows companies to connect with expert talent that can meet their specific needs at a lower price point. Because the cost of living varies internationally, it's much easier to negotiate fair and affordable wages with outsourcing vendors.


Still, high quality is more important than lower prices. Remember to choose your outsourcing partner wisely and know the company history before outsourcing software development. To find the best outsourcing firm, contact each company directly to ask about their services and experience. Also, search online to see what other businesses have to say about the outsourcing vendors you're considering.


While we've listed some of the most well-known advantages of outsourcing software development, there are many more reasons outsourcing software is beneficial for startups. The bottom line is that with the right outsourcing team on board, your product is likely to hit the market in a shorter time frame and generate more revenue than expected.



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Iron Forge Development, Inc. 2020

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