How to Build a Startup with an Outsourced Software Development Team

Building a startup is all about risks, uncertainty, and rush. You’ve got an idea, even raised funding or took a loan, and here is the toughest stage comes — the implementation of the idea itself. At this point, you start looking for an outsourced or co-located team. The first option is in most cases is cheaper, especially if we are talking about South and Central Asia. The outsourced teams are becoming more and more popular now. According to the Deloitte Global Outsourcing Survey, in 2018 the outsourcing market amounted to $85.6 billion. However, hiring an outsourced team sometimes still undermines challenges starting with the usual change of the deadlines or scope of work and ending with a lack of transparency and the absence of trust.

Before the implementation, go back to your idea and think it over again:

The nice idea is to conduct a market research first and make sure your idea has an audience and you understand the target users. In addition to that, it will help you to analyze the experience of your competitors who may operate in the market and build the product for years: which features are working and generating revenue and which are not. Taking into account the costliness of the development, try to test your hypothesis prior to the development. For example, create a survey or run the test adds.

When you are sure about the idea, go further and think of the MVP scope of work.

Forming the scope of work

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The aim of the MVP is, first of all, to verify the hypothesis. Therefore, the scope of work formation should start with the key functionality dedicated to solve users’ problem and save their time. Imagine, you are learning a foreign language. Would you just go to the country you’ve never been and where you understand no-one or would you learn it word by word, one grammar rule by another? In the case of the startup, the second option is more preferable: building it piece by piece and collecting the users’ feedback as soon as possible after the development start.

Please also note, that it is fine to launch the product for free, but you definitely need to think of its further monetization to be able to continue development after the launch and turn the startup into the growing business. Ensure that users are ready to pay for the service and identify how much. In addition to that, think of the KPIs by which you’ll measure the product's success at the end.

Choosing a team

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If it is your first time working with an outsourced team, I would advise paying attention to how the team works and ask for the references. You should find out how your chosen team positions itself in its community. If they are a development team, are their portfolios available, such as GitHub repositories? Do they have real reviews on rating platforms such as Clutch? It also makes sense to have a trusted person on your side — CTO or Product Owner who will closely interact with the technical team. It is especially important if you have never worked with the technical teams before. Another option is to attract a third-party company to audit the working processes, code, documentation, etc.

Look for the experts, not just blind performers. Such a team will always challenge you and share their experience that at the end of the day will significantly improve the product. Even though it is important for the whole team to be professionals, pay special attention to the UI /UX expert at the MVP stage. Good, but not necessarily complicated design, with the well-thought-out user flow, can increase your chances on the product success and save time on the further readjustments. One of the ways to save time on the future development is to conduct proper UX testing of the prototype.

In addition to that, give preference to teams that work in accordance with the Agile and that allow you directly communicate with any team member. In this case you’ll see the results gradually and will be able to pivot the development if necessary. The second will ensure transparency and a single product vision.

Regular communication

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Unlike the co-located teams, one of the issues working with an outsourced team is the low involvement of the team in the project idea. The good news is there is a solution for that — regular communication. It is extremely important to be on the same page. Therefore, calls should be conducted several times per week and there should be a meeting summary approved by all the team members.

Step-by-step results

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As we discussed before, in the case of the startup iterative approach is much preferable since it allows us to get the results faster and ensure the chosen track is the right one. In addition to that, you will know exactly what the product meets the expectations or identify the risks of failing the deadline earlier.

Trustful atmosphere

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There is no way to have a project about the problems. It is all about telling them at the right time. The trustful atmosphere will encourage the team to speak out their ideas about product improvement, suggest alternative solutions for the tasks, and rise up the potential issues. Working with the team for a long time will allow you just to share the problem you want to solve with the team and they will come up with a solution on their own.

Intrinsic motivation

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It is a rare case when people are motivated by strict deadlines and penalties. Moreover, it often demoralizes the team and leads to poorer results. There is no way good idea to force the team overtime all the time thinking they’ll work faster. Constant extra work decreases productivity and consequently, the product quality will fall and not allow you to demonstrate the product to users.

The best means to cheer up the team and encourage them to perform better are:
Your own attitude to the project — you should be extremely involved and passionate. Sharing the product vision and business value to let a team see that it writes code, not for the sake of code, but to solve a real problem. Users’ feedback is another inspiration tool. For example, when the project will be already in production, you may arrange retrospectives meetings and present the business metrics for the team to show how the project is growing.

Outsourcing work to a hired team is risky. Yet the risks may be eliminated with the proper working processes and regular communication.