Startup development – In house vs Outsourcing?

Published on: 26/07/2022 | Updated on: September 26, 2026

How startup development can be effective – in house vs outsourcing? Understanding the specifics of project creation did not come to us immediately. It took us several years and many different projects. We learned quite a few bumps before we said to ourselves, “Stop! You can’t do startups the way you do ordinary sites. You have to do them differently!” And immediately everything fell into place. In-house development vs outsourcing — which is better?

Let’s understand the terminology: In house vs Outsourcing

In-house — despite the name, it is a job with a stay in the office provided by the employer. This method is the most transparent and clear, but the most difficult in terms of implementation. Own team, working in one office space can be both the cheapest and the most expensive option for the organization.

Outsourcing — hiring a contracting company or individual contractors to perform the necessary tasks. This option is suitable if the customer has a large amount of work that their own team can’t handle, or doesn’t have product expertise.

Team composition for IT product create

Who is involved in working on projects, services, and apps? Depending on the scope of the project and the tasks involved, the number of specialists may vary, but in general, the composition is listed below. Name, load, and a simple explanation of who does what, no details:

• DevOps engineer — part-time, pulls together all the pieces that make up the project. Brings automation, simplification, and acceleration to the project;
• Team leader — a part-time or full-time leading specialist, who deals with the technical creation of the project and its architecture, knows what is going on with the project, at what stage it is, reasonably accepts or rejects proposals and ideas, etc.;
• Designer — part-time, creates layouts (design) of the future product;
• Frontend — full-time — creates the client part of the product, i.e. everything a user sees in a browser, based on the designer’s layouts;
• Backend — full-time — responsible for the internal and computing logic, in other words, creates all the things that are not seen or directly touched by the user;
• QA-tester — part-time or full-time — is a specialist who checks the program, system, or app, tests, looks for bugs, plans to eliminate the causes of errors and prevent new ones, etc;
• Project-manager — part-time or full-time, a project manager, the setting of the entire workflow.
• Product-manager — part-time or full-time — is responsible for the formation of product requirements, defining the purpose of the product, product creation, market analysis, assortment policy, pricing, and product promotion.

Most of the time, the customer’s communication is reduced to contact with Project-manager, Product-manager, or Team leader. Depending on the scope of the project, some roles are combined, absent, or other specialists are involved.

Who will create the startup?

Imagine a situation where everything is going well, and you received an investment. The investor has a choice: work with the existing team, hire professionals, or software development outsource.

Team

The most common option today. And indeed, the one who comes up with the idea is the one who will implement it best. It seems to be logical. But in fact, the competence of the project founders will likely not be enough. And even if they do, how long will it take?

Moreover, founders may be good at one part of the project but have no competence in another. For example, they can make a website, but not an iOS app. In this case, it is usually suggested to hire missing specialists on staff.

In-house staff

Finding a good professional is a serious problem. Such an employee is primarily interested in stability and career growth. Now it’s not a problem to get a job in one of the many companies, which are engaged in software development outsourcing, and gradually getting expensive.

Is a temporary job. You can work on a project for six months or a year, and then what? Do you get fired? And the time is gone, in his company, he would have got to the next level. Even with a good salary, it is not profitable.

Even if such an employee managed to get interested and agreed to work in the team, conflicts with the founders, different visions of implementation, different programming styles, etc. are possible.

Also, you should not forget that in addition to specialists, a project needs a staff of core employees who will deal with the actual project after it is launched: managers, marketers, moderators, editors, etc., depending on the specifics of the project.

Hiring your own team can be a good solution. But even if you are lucky, such a solution is likely to be too expensive. Not every project can afford its own staff team, and the investor will inevitably risk spending all the money on programmers’ salaries. Therefore, it makes sense to consider software development outsourcing.

Software development outsourcing

When the investor opts for software development outsourcing, he will receive a lot of obvious advantages:

• There is no need to look for employees. They are already organized into a team and provided with everything they need.
• Every company that is engaged in software development outsourcing already has experience and expertise in working with different frameworks and can choose the most suitable implementation for each specific project.
• There is already ahead of the creative department, with whom you can communicate in a language that is understandable to the investor. He will be able to correctly set the task for programmers because he has experience in such work.
• The company for software development outsourcing is already ready, and no time will be spent on solving the staffing issues during the team building.
• You pay only for the result, not by the hour. And this is not a fixed cost, but a variable, depending on the amount of work.
• By software development outsourcing, you win both resources.

Software development outsourcing: Conclusions

In house vs Outsourcing development – Which is better? Your own team or software development outsourcing? You can do it anyway; the main thing is that your steps coincide with your goals. Building a team is a complex process. About one in ten people are selected to join. Test assignments, training, challenging projects, and the right atmosphere are just a few things that help a good professional become even better. Bottom line: If you want to do a startup, do it. Only give the task to someone who knows how to do it, so choose software development outsourcing.