Seven Key Challenges Early-Stage Software Startups Overcome with the Help of Outsourcing

Seven Key Challenges Early-Stage Software Startups Overcome with the Help of Outsourcing
Seven Key Challenges Early-Stage Software Startups Overcome with the Help of Outsourcing
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Every early-stage startup is an iterative study of what entrepreneurs must build to become a sustainable business. 

Fast response and flexibility are crucial factors under limited resources. Early-stage startups must be effective in managing feedback and deciding whether they: 

  • improve and continue with the same idea
  • turn to a completely different idea or audience

To be responsive and flexible, startups need expertise in how to build a digital product. 

Hiring an Agile outsourcing team presents a viable alternative to building an in-house team when early-stage startups want to beat the competition but need more tech background. 

An outsourcing team takes over the how part. It helps remove common challenges that extend or block software deliveries, including:

Learning real development needs

Early-stage startups know they should take little steps. 

Yet, they often start with a too-general idea. The idea might be too complex and expensive for immediate implementation. 

An experienced team initiates project discovery to determine what is possible. Only then it provide a plan which enables cost-efficient MVP development services.

The development team learns about development priorities at a low cost by building prototypes. Early adopters, investors, and industry experts evaluate specific functionality and provide feedback. Then, the team incorporates it into the product, increasing relevance. 

Startups win when the technical team aligns business concerns and technology strategies. It enables keeping project scope at a reasonable level. 

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Envisaging new technology 

Disruption is the cornerstone of progress. Startups applying innovative tools and techniques for building new technologies gain a competitive edge. 

Yet, technological uncertainty is high. It can be daunting, especially for non-tech founders. Startups need to focus on knowledge acquisition. They must align emerging technology and the chosen business model. Many promising industries are regulated, e.g., healthcare or FinTech. The development cycle extends. So does the time needed to gain investors or first paying customers?  

It makes sense to look for a team with niche expertise. It can manage uncertainty faster based on gained experience.

Finding talents

Local markets still need talent, despite recent layoffs by tech giants. 

Access to expertise at the right price is the biggest driver for executives to look for outsourcing software development and maintenance, according to the Deloitte Global Outsourcing Survey in 2022. 

Early-stage startups need a stronger position. They cannot grant the same level of perks and benefits that established businesses offer. Still, they need a qualified, experienced cadre, especially when envisaging a technically complex solution.

Just like big companies, startups engage talents by turning to specialized vendors in the global market. Here, startups should choose a vendor based on the available budget and the time they can spend on communication and management. 

Applying the relevant cooperation formula

Knowing project costs upfront simplifies planning. Yet, the fixed-price model could work better for startups, even in the early stage. 

The initial idea will evolve. The startup founder reaches the team with a requirement update again and again. The team will need to estimate each time to provide “new” final software development costs.

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Instead, deciding on specific cooperation terms in each case makes sense, allowing both parties flexibility. Cooperation terms are based on the startup’s goals and needs, available budget, and team involvement. 

To balance the terms, startups can include a not-to-exceed clause and a maximum cost cap. 

Managing project roles and workload

A small team of 3 – 8 engineers is enough to launch startup software. Yet, the roles may vary. Hiring the right squad in-house can be challenging without prior experience. The vendor adapts the team squad to project requirements. 

Team management may also present challenges. A dedicated project manager coordinates the vendor’s team. Otherwise, the startup should reallocate time for it from other tasks. 

The scope varies depending on the project phase. When a startup pauses the project to evaluate the feedback and reconsider the strategy, most team members may stay idle for several weeks or months. Startups pay for the developers’ time they do not use. 

In the case of outsourcing, workload remains the vendor’s risk. 

Keeping processes up and running

It is easy to descend to chaos with many competing priorities on the list. 

Still, startups can cross software development out of it, which is crucial. 

An established development team has a settled workflow and stable squad, saving time on coordination and management. It guides the startup through the software development process, focusing on multiple tasks that need to be done in a short timeline.  

Knowledge transfer is a part of the process.

A supportive development team explains complex activities in simple terms. It helps startups delve into specifics to the extent they need to keep efficient communication.

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Staying focused and disciplined

Flexibility is crucial for a successful startup launch. 

Yet, flexibility will play a negative role when a startup lacks discipline and clear focus. New startup founders may want to change development direction each time they come up with another idea. The result is that they always develop but never deliver.

Instead, flexibility means changing priorities fast when the previous idea does not work. 

A solid vendor delivers the required functionality in short-term sprints. Startups get tangible results they can examine. 

Changes are highly welcome after a sprint but not accepted during it. This way, vendors ensure startups analyze their priorities and focus on their goals.

Startups stay on schedule. 

Closing thoughts

Startups need to learn fast and be ready to use knowledge immediately. They must allocate resources wisely.

Cooperation with an outsourcing team shortens the development cycle. Early-stage startups save time and budget. It also helps arrange and shape chaotic organizational processes. Startups need it to stay on track. 

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