Why is Outsourcing Product Development Important For Startups?

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The biggest question that tech startups face in today’s times is whether they should develop the product in-house or outsource it to external teams. Outsourcing product development to a specialist team can really put the startup at a huge advantage.

outsourcing product development

One of the other important advantages of outsourcing product development is cost savings. Outsourcing provides a global talent pool and one choose the best fit resources for development of the product.

In case of new products whose market is yet to be tested, outsourcing plays an important role in mitigating the risks of trying out something new. Since the outsourced teams work on flexible models the risks are definitely lower.

Outsourcing the development helps in faster development with Agile model and helps in tremendously reducing the time to market.

Outsourcing, is very helpful in case of initial days of a startup when it’s usually going through a phase of budget constraints.

Technology heavy startups must outsource whole or a part of their product development to improve the efficiency of the development process.

Here are is a list of successful startups that were built with the help of outsourced teams.

Here are some key steps for your startup `to effectively outsource product development:

Choose the Right Vendor

Choosing the right vendor for outsourcing application development is a must. An outsourcing company with expertise in the required development skills, will surely be helpful. Picking up freelancers is definitely not advisable, as they cannot be relied upon, for taking up product ownership.

One of the important points to consider, while selecting a vendor for outsourcing development is flexibility of hiring models. This helps the startup choose a hiring plan that will optimize the costs of outsourcing in accordance with the development requirements.

It is also important to evaluate the portfolio of the hiring vendor to understand the level of specialization in different business verticals.

Defining The Scope Of The Project

The second most important step in outsourcing your product development is to define the scope of the project. First you need to convert the business idea into a business plan and then put down what all you need from a successful product. Defining the technology with which you wish to develop your product is another crucial decision. This also helps in defining the skill levels of the teams you wish to hire.

Once the scope of the project is defined and the vendor for product development has been chosen, the service level agreement with the vendor can be created. This helps in ensuring that the outsourced teams are working according to the plan of action.

The outsourced teams must be clearly communicated about the expectations and the milestones. This helps in developing mutually beneficial relationship with the outsourcing partner.


Keeping in touch with the outsourcing partner on a regular basis and reviewing project work in progress on a constant basis is important. This is helpful in improving project productivity level.

Motivating remote teams with incentives and appreciation is helpful in getting better business results.

Looking to outsource your startup project? ValueCoders provides expert agile teams for all kinds of startup site and application development. Here are some key advantages of hiring with ValueCoders:

  1. Flexible hiring models
  2. Advanced technical project consultation
  3. Agile methodology and timely project delivery

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