Should Startups Outsource their Technology Development

Photo by Canva Studio from Pexels

In this article, I will discuss the pros and cons of outsourcing technology development to other software companies.

The development of technology is a costly affair. When a startup decides to hire a developer for their business, they have to pay them as per the market rate.

However, a good developer is usually hard to find in the market, and this can become quite an expensive affair.

So what can be the best option for startups in this situation?

Should they hire an in-house development team, or should they outsource their technology development?

Let’s take a look at both these options in detail:

Option 1: Hire an In-house Technology Team

One of the biggest advantages of hiring a full-time technology team is that you can keep things in control and manage the entire development process. You are also able to monitor the progress regularly.

You will also be able to get a better idea of the cost involved in the development and the time frame to complete the project.

You will also have more control over what is being developed and how it is being developed.

However, you will have to spend more money than if you hire an external consultant.

If you decide to hire a full-time team, you should make sure that they can fulfill your requirements. They should possess all the necessary skills and capabilities required for building your product.

However, it might be difficult for you to find qualified professionals who can help build your product from scratch.

You may have to train them or hire freelancers on a contract basis before becoming fully capable of taking on this role.

Option 2: Hire an External Software Development Company

If you want to save some money and not spend time training new developers, then outsourcing software development could be a good option.

Another advantage of outsourcing is that you can get a much wider range of options when choosing a development partner. You may also be able to find a better developer for your project at a lower cost.

You will also not have any control over the development process, and you cannot keep an eye on the developments regularly.

However, you will be able to outsource most of the project activities with very little work on your end.

You will receive regular reports regarding the project’s progress, and you can also check out your product even before it is completed.

Therefore, if you are looking for an affordable development option, then outsourcing software development may be a good choice for you.

So which option should startups choose?

This totally depends upon what they are looking for in terms of benefits from their technology partner and their financial situation.

For example, if startups are looking for someone who will help them develop their product from scratch, then in-house developers will probably be a better choice.

However, if startups are looking for someone who can complete their project fast and at low cost without much hassle or control, outsourcing software development could prove beneficial.

Here are some questions you should consider when deciding whether to hire an in-house team or outsource software development:

Do I have the budget for hiring a full-time technology team?

Am I willing to spend time training my team?

Can I manage the entire development process myself?

How much time do I want to invest in project management?

Do I have a clear idea of what I want from my partner and what type of work they need to do?

How important is it for me to keep an eye on the development process, and how much control do I want over the project activities?

What level of flexibility do I want in terms of timelines and delivery?

How much control do I want over costs and the quality of deliverables?

The choice is ultimately yours. You should analyze your needs and requirements before deciding whether to hire an in-house development team or outsource software development.

In conclusion, outsourcing technology development can be a good option for startups looking to build their product fast and at low cost with minimal hassle.

Hiring an in-house team is the best option for startups who want more control over the process and quality of deliverables and timelines.

It all depends upon what you are looking for from your technology partner and what kind of budget you have available for your project.

It would help if you looked at these factors carefully before making any final decision about which option to choose.

Do you agree with my analysis of the two options? Let me know in the comments!

About the Author

I am the Founder of Cudy Technologies (, a full-stack EdTech startup helping teachers and students learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces, and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.

You can connect with me on Linkedin ( and let me know that you are a reader of my Medium posts in your invitation message.




Founder of Cudy Technologies (, a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and investor.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

The Definitive Guide To a Successful SaaS Controlling Setup

Photo by Stephen Dawson on Unsplash.

The truth about PolyPug wasn’t founded to seek consensus

Kickstarter is Not a Magic Wand for Success — A FlowMotion Story

Unlearn Your Childhood Advice To Successfully Create Million Dollar Business

A child sitting on the shoulders of her father and trying to look far.

GCVF Standard Terms & Reps for Investment Docs

Subscription ecommerce fundraising financial model

Survive and Thrive 2017: The journey of an Indian fashion entrepreneur!

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Alexander Lim

Alexander Lim

Founder of Cudy Technologies (, a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and investor.

More from Medium

Startups and diving into the deep blue

Lessons From a Failed Startup

Founders, Don’t do this:

Observations From My Internship At A Highly Effective Startup