When building a product, every startup steps on a hazardous path where a lot of things can go wrong abruptly and mercilessly. They might start with a vision but make all the wrong decisions on the way. From flawed business models and lavish spending to getting beaten by competitors due to poor team management and terrible time to market, only a few make their way in the business world while thousands fail every day trying to deliver a product the market simply doesn’t need.
When it comes to startups outsourcing software development, it’s never just about the cost-saving opportunities but the broad experience, tech expertise, and domain knowledge a professional vendor can bring to the table. Skype, Slack, GitHub, Basecamp are just a few of the renowned startups that have outsourced their software development to professional vendors. Numerous more continue to delegate support and maintenance of their products to their trusted tech partners.
So how does outsourcing help startups reduce business risks and overcome development challenges? How do professional vendors streamline a startup’s journey to success? Let’s take a look at how outsourcing can help you succeed on every stage of development.
Idea validation
Sufficient knowledge of the problem isn’t enough to start the development of your product. You can’t introduce a viable software solution if you haven’t gotten to the very bottom of the problem you’re trying to solve. In order to avoid wasting months of your time and tons of invested money on a product doomed to fail, you need to find the answers to all of the questions that would validate your idea and the demand for it before you get to building the MVP, including:
- What is your target audience?
- How do they deal with the problem today?
- Are there any competing solutions on the market?
- What are the competitors’ main features and advantages?
- What makes your idea a different, better solution?
It’s a lot of work most startups don’t have the experience and capacity to do properly on their own. And while many rely on guesswork and sheer luck, clever startups hire outsourcing companies and utilize the domain knowledge and expertise of proven product developers and business analysts to validate their ideas and alleviate the risks.
It’s much easier for a startup to identify the problem clearly, pinpoint the target audience, analyze the market, and define business goals with a reliable tech partner. An outsourcing company will research, quantify, and properly document the problem. They will break the problem down into smaller, measurable pieces and fine-tune your problem/solution fit until they find better, simpler, unique ways to address every side of the problem. With valuable insights, strong competitive edge, and data-informed strategy, you will be able to tailor a perfect value proposition and move onto the next stage with confidence.
Recruitment
From finding team members with relevant skills, experience, and mindset for the project to onboarding, potential replacements, and scaling, employee turnover has always been a very daunting challenge for a startup. This never ending recruitment cycle becomes a very time-consuming, exhaustive process that can easily turn into a chaotic mess. There are many factors that can affect turnover (e.g. how cool your idea is or working conditions are), but there really isn’t much a startup can do to remedy this issue on their own.
This is exactly the reason recruitment is one of the best processes to outsource. There’s no longer much of a skill discrepancy between software development talent pools worldwide while outsourcing offers lower costs and increased control over your burn rate. With so many high-quality options available, today a startup can efficiently fill in the gaps in their project with talent from Eastern Europe, Argentina, or China. These candidates will be just as experienced, skilled, and innovative as those in the U.S. or even better.
A good tech partner will be able to help identify the best tech stacks for the project, evaluate the level of expertise and skills needed for the required roles. They will handpick the best fit and integrate them into your team with little to no delay, giving you a considerable head start.
Outsourcing brings your team a lot more flexibility for adjustments in the scope and direction of the project. It’s much easier to prevent excess hiring, manage the workload, and mitigate the impact of sudden changes when you can scale the team up and down on the go as you streamline through the milestones.
Minimum viable product
With a valid problem/solution fit and your team assembled, you can move straight to product development. At this stage your goal is to turn your designs and prototypes into a simple, functional product with features just enough to solve the problem, cover the basic needs of your users/stakeholders, and prove the demand.
The biggest risk a startup is facing at this stage is failure to turn their concept into something people truly want. Here, the tech expertise and domain knowledge of an experienced outsourcing company can help you alleviate that risk. Even though your solution will definitely undergo a number of iterations and pivots on its way from the initial idea to final MVP, a professional vendor will help you minimize the degree of future changes and the number of iterations needed to reach the MVP milestone.
With an experienced tech company by your side, you will be able to avoid any budget pitfalls. They will help you define the most important areas of development and the ones you can get back to later, saving you money. It will also be easier to expedite your development timelines with a well-planned course of actions. Your vendor will help you test the solution, gather feedback, and refine the features and UX to create an irresistible offer—the product your target audience is looking for.
Product/market fit
The way from MVP to a solid PMF is a tricky one. This is a vital step where you have to choose the right business model for your software solution—the one that will help you grow your user base and revenue at a large scale with minimal to no risks. You can spend from a couple of months to several years turning your MVP into a profitable, scalable product your users will gladly recommend to others. For that you need to collect and process tons of data and metrics that cannot be obtained from pre-launch analysis and beta testing (e.g. Net Promoter Score).
Yet again, this level of analysis may be too much for a young startup to handle, especially since the product is already launched and there are so many new responsibilities. Startups call their tech partners for help. With the experience and capacity of their vendor, the startup can gather, quantify, and process data significantly more efficiently. Through rigorous business analysis and user testing, the vendor will help them choose a clear business direction, one that ensures consistent user acquisition, low churn rates, and ever-increasing lifetime value.
Growth
At this step you’re essentially not a startup anymore but rather a well-established business. Your goal here is to keep accelerating your customer acquisition and ensure strong growth rates. This will help you both generate more revenue and bring in more VCs looking to turn your business growth into sweet IRR.
With growth come new challenges a professional outsourcing company can help you overcome. You have to grow your software solution with new features, further optimize your business direction, and develop your next products to conquer new markets. You can always use the services of your tech partner to free your daily routine of micromanaging the development. Your vendor takes care of team management and product maintenance while you focus on improving your business strategy, marketing, and growth.
