Should an MVP be outsourced
Have apps programmed - who should develop my product?
Not all people who can code have great product ideas and not all people who have great product ideas can code too. You probably belong to the second kind and are now wondering how you can find an affordable and trustworthy partner who can realize your product idea. Because developing a functioning app or web application that is user-friendly and scalable requires real experts. Programming apps yourself will not be possible to the extent necessary in the foreseeable future if you do not already have a lot of experience in programming apps.
In-house developer vs. freelancer vs. agency vs. tech partnership?!?
Suffice it to say: There are some options not to have to do the development yourself. Each has its advantages and disadvantages and after reading this article, you should know about them.
Co-founder / own developer
A technical co-founder or developer is one way to go into product development and beyond with an expert by your side. So you are looking for someone who would like to join you in the start-up in the long term and to whom you will leave a salary and the corresponding company shares. In the case of a co-founder, the shares can be up to 50%, but hired developers often get a few percent.
The advantages of co-founders and employees are that they will drive the startup with you in the long term, beyond the MVP and product development. You can become a well-rehearsed team and the development takes place completely internally. This is particularly advantageous in the hardware area and investors generally appreciate it if the intellectual property of the company is created and remains in-house.
A good developer or co-founder must be able to build the bridge between the technical and the economic area. He must be able to make you understand which technical applications affect the economic side and how, and be able to assess whether this in turn makes sense or not. In return, some experience in founding and developing similar applications is an enormous advantage.
However, it is already becoming apparent that someone like that is not easy to find. Acquiring a good developer or co-founder is often a godsend. Often startups fail because of co-founders who do not have all the necessary skills. For example, many products are not finished because a technical co-founder without an economic background is perfectionist and gets bogged down in over-engineering.
Retaining a co-founder or good developer is also a challenge: On the one hand, there are running costs, as both will be dependent on salary. Pure work-for-equity models rarely last longer than a month or two because everyone involved has to cover the cost of living. In addition, there are the shares for the co-founder and it will also take some time until all processes can be tackled effectively as a team. It is also not uncommon for competent co-founders to be recruited from large companies for high salaries and the other founders were left without developers or CTO.
Overview: Technical Co-Founder / Recruited Developer
- Has self-interest in long-term success
- Is at your side as an expert for the entire development of the startup
- Conservative investors in particular appreciate it when you build up intellectual property with your own team
- A lot of MVPs / products, where the technical part is brought in as co-founder, are never finished
- Seldom has all the necessary skills, e.g. founding experience and / or developing similar apps, as well as server administration, databases and security
- Co-founders also have to cover their running costs and are therefore difficult to keep without a decent salary
- You first have to be trained in your startup until productive teamwork emerges
Find the right developer
To find the right technical co-founder or developer for your startup, look for someone who:
- ever something similar has built
- knows what it's like in a startup, ideally founding experience!
- no software architect is: you need a doer, not a planner!
- is not too perfectionist; you need 80% solutions. Someone from a corporate environment is usually less suitable and usually just expensive
- Can easily present technical topics to you and point out business implications
Freelancers are self-employed experts who often make their expertise available to many customers. Many freelancers are quite specific and often have experience programming entire applications.
There are many freelancers - many at relatively low prices. In any case, they are cheaper than agencies. Good freelancers can develop a highly professional application; they are state of the art and have an idea of what works well. So at best, you don't have to worry about anything else.
Beyond developing the application, you have no obligations to freelancers, as would be the case with employed developers or co-founders. In addition, there are no further administrative expenses for you after the payment. As a result, the use of freelancers is very flexible, which furthermore does not generate any running costs.
Unfortunately, it is difficult to distinguish the really good freelancers from the less good or even scammers. It can go very well, but unfortunately also very badly. So it is definitely good if you already have a recommendation or can fall back on other empirical values when making a selection and do not have to leave the success of product development to chance.
Because freelancers are self-employed and are not involved in your startup and beyond their commitment they have no interest in your business success. If their application does not exactly match your idea, then - to put it simply - it is no longer their problem as long as they have implemented your instructions.
In addition, programs built by freelance developers only need to be understood by themselves during development. As a result, applications by freelancers are unfortunately often difficult to read and it takes a lot of time for others to maintain or develop the code later.
A final disadvantage is that many freelancers often have little experience with server administration - they are good at their job, but as a startup you usually need a bunch of other skills; this becomes very important when it comes to data protection and collaborative work on a code base.
- Mostly has experience in developing complete applications
- Less administrative and accounting work than an employee
- Development can be completely outsourced at relatively low prices in some cases
- Has no self-interest in the company's success
- Often out and about as a “lone ranger” - teamwork and code quality are not always in the foreground
- The result can be very unsatisfactory
- Freelancers rarely have as much experience with server setup, maintenance, uptime monitoring etc. as a system administrator
Find the right freelancer
To find the right freelancer for your startup, look for someone who:
- Can show references for similar apps (no corporate gigs!)
- works regularly in teams
- for continuous deployment is not a foreign word, but a standard
- ideally has already been found to be good by other founders
- Server administration understands, or outsources it to someone who understands
Agencies are basically similar to freelancers: They are specialists who build your application for a certain fee and you just have to wait for the finished result. Agencies are usually more expensive than freelancers, but usually also deliver a complete package for product development and work as a team, which has certain advantages.
What the agencies still have ahead of freelancers, but also the co-founders and employees, is that they can already fall back on a well-rehearsed team of experts who as a group already have a lot of and broader experience in development. This guarantees you a certain standard of quality and legibility of the code, since different people are already working on the code in the agency and mutual checks take place automatically.
Working in a team also improves communication - there is usually a project manager who always keeps an eye on everything and can report back at any time. In addition, someone will always be available for you in agencies, even if someone is sick or on vacation. If this is the case with a freelancer, co-founder or employee, you cannot fall back on them for the time being.
Both the price range and the quality range are wide at various agencies. At very low prices, caution should be exercised and you should ask yourself whether the performance you want is even possible at this price.
As with freelancers, it is important to note with agencies that they are not connected to your startup beyond the assignment - their responsibility ends with the respective assignment, which can be a disadvantage if the results are unsatisfactory. In addition, agencies, as well as freelancers, do not necessarily have the incentive to go the fastest and cheapest way, because they themselves have the incentive to estimate as many hours as possible and thus generate more sales for themselves.
- Usually offers a complete package
- Usually has an experienced team of experts:
- Better communication through a project manager
- Dedicated server administrator takes care of security and continuous deployment etc.
- Dedicated front-end / back-end developers may be more effective at certain tasks
- With an entire team, someone is always available, even when on vacation or in the event of illness
- Can be comparatively more expensive
- Has no self-interest in the company's success
- Most agencies specialize in enterprise products
- Supposedly “cheap” agencies often only implement your input without questioning it. Sooner or later, conflicts usually arise and the app cannot be published at all
Find the right agency
To find the right agency for your startup, look for a partner who:
- Deploy a full team, not just a single developer
- Has experience with similar apps
- specializes in small apps and startups
- ideally makes a fixed price offer
- fully understands and questions not only your idea, but also your business model
- can take over long-term maintenance
- gives you the rights to your product
- Bonus tip: Agencies like VIPERdev not only bring developers with them, but also regular sessions with series founders, which can quickly save you months of time when entering the market
Tech partnerships are a kind of mixture of all previous alternatives, which fortunately manage to combine the advantages of co-founders, employees, freelancers and agencies. The tech partners are professional teams and join your startup as CTO: They therefore receive a fixed price for their development work and also some company shares.
Thanks to this mix, you pay less than for freelancers or agencies, you give less shares than to a co-founder and you do not generate a lot of administrative work or running costs. This leads to a compromise that offers you moderate costs and a partner who is intrinsically motivated by shares.
Since tech partners get involved in companies again and again, they not only bring the technical expertise with them, but can also contribute constructively to the growth process if necessary. This can save founders a lot of mistakes and valuable time before entering the market. With a tech partner who has the right strategy, you can be on the market six months earlier - that can make all the difference.
Tech partners have a team that is experienced in founding, which you can fall back on in order to communicate processes well and to get results efficiently. This combines the great advantage of agencies with a lower price and the most efficient way of product development.
Hardly any co-founder or developer can muster the concentrated founding experience of tech partners; and no individual can have such a diversified expertise as an experienced team of developers.
Tech partnerships are a new way that more and more startups want to take to realize their product development and at the same time have an experienced long-term partner. To meet this demand, we at VIPERdev founded the tech partner Next Day Ventures. Next Day Ventures is a pioneer in this area; regularly participates in startups in order to develop their product with them and to support their growth.
Overview: Tech partners
- All the advantages of a good agency specializing in startups
- Offers a cost mix of a moderate one-time payment and shares
- Brings not only technological knowledge, but also entrepreneurial experience
- Specializes in startups, often founds several startups per year
- Difficult to find as it is still a very rare concept
- Not every startup is accepted as it is a kind of investment
- Only makes sense if you need and want to accept help on both topics
- Financially a worse “money-for-equity deal” than an investor
Tips for a successful collaboration with tech partners
When you've found a tech partner:
- Communicate your product idea clearly and present your business plan in detail
- Take advice
- If parts of your plan would lead to technical difficulties or high costs, accept counter-proposals
- Be open to advice on entering the market and first sales; a good tech partner really pays off here
- Bonus tip: Get in touch with potential tech partners without obligation and talk to them about the options available. You can book a free consultation here and talk about the possibilities of a tech partnership with Next Day Ventures.
Overview of the outsourcing options
This table shows you what effort and what benefits the different partners bring with them for you as a founder. At the end of the day, all startups, founders and product ideas are individual cases, but experience shows trends that this table shows.
|Co-founder / developer||Freelancer||Agency||Tech partner|
|Costs, short term||€ / €€||€€||€€€||€|
|Business model development||**||*||*** (if specialized)||*****|
|Probability of success||30%||50%||90% (if specialized)||90%|
Whatever you decide to do, make sure that your partner specializes in startups in the case of an agency or freelancer and that the co-founder or hired developer has already gained experience with startups. This makes collaboration a lot easier and it saves time and money if things can get started more effectively. The classic “enterprise product development” is out of place here.
The most important learnings for the development of your app:
- The most important thing is that your partner specializes in startups and has founding experience!
- All partners with shares are interested in long-term success
- All partners with a team usually communicate better and bring more expertise to the table
- Only tech partners offer you a cost mix of a one-time payment and shares in the startup
- A good tech partner can get you technical and advance on an economic level.
- Freelancers and agencies often only do what you tell them to do. They don't necessarily provide advice about whether your instructions make sense.
- Unfortunately, freelancers often cannot meet expectations and develop products that are difficult to develop further.
- Co-founders require deep collaboration - it is difficult to find a suitable co-founder and it costs a lot in the event of failure
If you still have questions about which partner is the best for your specific project, you can arrange a free consultation here.
We at VIPERdev have already helped many startups with the development of apps and web applications - whether as an MVP or a complete product. Due to the founding experience that we were able to gain on our own path and that of the customers, more and more customers wanted us to be a consulting partner on both topics in their start-up. In response to this need, we founded Next Day Ventures: a tech partner who helps startups with the development of digital products and also supports the growth process with words and deeds. If you would like to know what exactly we can do for your startup and whether we are exactly the partner you are looking for, you can send a non-binding inquiry using our contact form.
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