Partnering without giving up control is the reason why tech outsourcing is becoming increasingly popular among startups. Why do startups engage external vendors, where and how to find a true ally, and when to commence cooperation?
Time is an extremely valuable resource, especially for startups. Wise time management is a crucial condition of success. But it most often requires delegating, and sharing your vision and insights with others. Partnering without giving up control is the reason why tech outsourcing is becoming increasingly popular among startups. Let’s talk this through: why do startups engage external vendors, where and how to find a true ally, and when to commence cooperation.
Time is money
One may say: a Do-It-Yourself approach means money saved. That is true, except for when it takes away focus and resources from your actual business goals.
Then, it becomes damaging to your business. Today, startups are not a one-man show anymore.
Most startups prefer to team up with accountants to avoid messing up with finances and tax returns. But software development is considered to be less in need for external expertise. The typical explanation is that a startup should already have the necessary knowledge of IT specifics.
The truth is that a technological implementation of ideas is a very specific area, and it can be very hard and time-consuming to go through trial and error, without any real expertise to lean upon. And, as a startup’s time is money – even more so than for well-established companies – it is crucial to stay cost-efficient and concentrate on growing business value.
So, getting expert help is a sound investment, not a cost.
What kind of a partner to look for
Not all tech vendors are created equal, so to speak. In short, look for the one that can offer you the full R&D stack, namely: contribute advanced engineering knowledge as well as business experience while assisting you in running a comprehensive market analysis. One that will become your flexible and highly knowledgeable “laboratory” having all of the tools and insights to do the job.
Sure, there are standard requirements for a potential partner:
Always check whether the company has a proven track record of cooperation with startups
Make a reference check
Ask for CVs of the people who would potentially be working on your project
Always sign proper agreements with a vendor to protect your concept
When to seek assistance
The smart move for a startup is to partner up with a trusted tech vendor at the earliest possible stage. The partner will help crystallize your ideas and positioning, make your solution investor-ready, and – what’s important – help you with proper project management.
After setting all the processes, adjusting a business/revenue model, refining the idea, and picking up the optimal technology stack, let the partner assist you in prototyping to get a greater understanding of your product. Building a prototype can be a real issue and it is a key milestone in getting the product ready for investor demonstrations, early adopters testing, or pre-sale promotions. A trusted IT partner can smoothly guide you through the cycle of getting a working demo built just as they should be able to help establish a Minimum Viable Product later on.
Where to find a tech ally
Another very important aspect is the cost of hiring, especially when it comes to IT staff augmentation, and your subsequent overhead increase. According to recent statistics, 17% of startups fail due to lack of focus, and 9% – due to their hiring mistakes. To avoid making it onto either list, take care about finding your best tech match today.
So, where to find your guiding star without breaking the bank?
Lots of recent reports address the need for using external labor in order to be less sensitive to organizational changes and the startup’s skill-set. It remains the best option to spare the troubles of hiring and training the staff, as well as project performance control. And there are numerous startups that have succeeded with outsourced development – Opera, Basecamp, Skype, WhatsApp are among them.
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