Why Should Startups Outsource Software Development Projects?

Why Should Startups Outsource Software Development Projects?

outsource software development

Nowadays, outsource software development is Normal. When your in-house development team has lots of work and the pressure of doing it in time, outsourcing is the best option to unload some tension from your development team.

In-home software development is always expensive and time-consuming. So, when the business is about to begin, and you focus on these things that are time taking, it won’t be good for your business. A startup has many things to do, and it cannot do everything independently. You have to get help from outside. It will help you focus on other important work necessary for your business. That is why one should adopt magnificent software development methodologies like outsourcing tasks. 

Around 40% of the tasks at present are being outsourced from top-notch IT companies. Moreover, outsourcing an actual MVP model costs around $40,000. It includes everything from development to deployment. Thus, one can easily estimate the freedom it provides from other tasks and lets developers focus on the core development opportunities. However, tech companies have many questions regarding outsourcing. Let’s answer some questions regarding outsourcing software development projects

Why There is a Need to Outsource Software Development Projects?

Outsourcing a software development project is always better than putting the burden on the head. Firstly, software development needs complete concentration, and putting a burden won’t allow the engineer to think creatively and smartly. It is the first reason why we should outsource software development. Other important reasons are indicated ahead:

1. Cost efficient

There is no need to tell you that it is the main reason to outsource software development projects to Startups. Outsourcing software development is cost-effective and helps in operating the business more efficiently. Most startups cannot afford in-home software development. 

If you hire a full-time developer, the developer becomes an employee of your organization, and you have to pay the developer like other employees. It includes basic pay, but you also have to pay dearness allowance, other allowances, reimbursements, annual bonuses, perquisites, and many more benefits with a basic salary. 

It will cost too much to hire a developer in comparison to outsourcing. In other words, in outsourcing, the Startups have to pay only service charges to developers. There will be no dearness allowance, bonus, commission, reimbursements, etc.

Startups save much money by outsourcing software development. The saved money can be used in other areas of business where it is required. As a result, It will produce less expensive finished products and attract many customers towards them. It also shows that you are good with money management. 

You use the investors’ money very effectively. The investors will be impressed by you after seeing how you produce products with less money using highly experienced overseas developers. Simultaneously, you can also do custom software development by outsourcing which is again a time & money-saving activity.

2. Save Time

Startups have to wear many hats in the beginning. They have multiple tasks on their plates where the focus is required. Doing everything independently will decrease the efficiency towards work and finishing the product. Simultaneously, it will expand the software development life cycle.

Hiring professionals will also make them trapped in unnecessary activities. They have to go through many stages to employ the expert firstly, they have to advertise the vacancies and requirements, select resumes, call for interviews, and discuss CTC with them. After selection, train them, introduce them to teams, and discuss their role and what you expect from them. This whole process will take lots of time. As a result, it will delay matching up with your deadlines. You will produce products inefficiently.

On the other hand, if you hire from outside, you don’t have to waste your precious time on these things. They have experience in their work. Only you have to select the right one, give them the project, and discuss your requirements and development cost. This process will save lots of time, unlike hiring in-home developers. Moreover, it will streamline the entire software development services.

They don’t need to meet with your teammates, set coordinates, or adapt your work culture, environment, and technology. They are professionals and know how to do their work. They will give your project on time. As a result, you will be relaxed and divert your precious time to other vital areas of your organization. It will increase the efficiency of your organization and never miss your deadlines.

3. Software Developed by Skilled Developers

For startups, it isn’t easy to employ experienced and skilled ones to do their development work. There are many reasons behind it. Some of them are given below:-

  • Startups can’t afford to employ them.
  • Give special facilities
  • Adjust to your company’s environment
  • Limited resources

So, the better option is to choose to outsource software development. It allows you to work with experienced and skilled developers. You can develop your products with a skilled hand. It not only gives you an efficient product but also impresses your investors & renders the most acceptable software development solution. The trust of investors will increase towards you. It will help your startups to be famous and popular amongst users. The users will trust your organization and your process.

Not only startups, but many other big tech companies like Google, WhatsApp, Skype, and Slack, take advantage of outsourcing. Yes, you heard it right. Many companies outsource a significant portion of their software. A company like Google outsources to India.

If big companies are outsourcing their software development, why don’t the tiny tech startups do so?

4. Faster Availability in the Market

In the competitive tech world, everything is about timing. Which organization deploys its product first in the market? The one who did in time wins this battle and will survive in the long run. It will give you special recognition in the market.

With in-house development, sometimes it will be impossible. As a startup, you will have to do many things, from product announcements to its release in the market. Between these two stages, many processes will follow to make it possible. You have to look after everything. There are some problems startups have to face during the custom software development process

  • Coordination between teams
  • Favorable environment
  • Limited resources
  • Lack of experience
  • Time optimization
  • Meet deadlines
  • Money issue

If any step goes wrong, it will delay your product’s release in the market. It will decrease your reputation in the market. The investors will also try to pull out their investments from your company.

So it’s better to choose to outsource for relaxing from these above issues. You will get your products on time and finish your work before the deadline. Get more time for testing before releasing.

5. Scalability

Scalability is one of the main reasons behind outsourcing software development projects. You can scale up or down according to your project’s requirements. This level of flexibility is not easy to find with in-house development. You cannot quickly fire any developer from the development team. It will create many issues-

  • The project will stop.
  • Recruit new developers in a short period
  • New developers require time to adjust
  • Start projects from the beginning
  • Recruit the wrong person
  • Hurt company reputation

Outsourcing will help with the above issues and decrease the burden on the CTO and project manager. Outsourcing not only has the advantage of the low cost but also decreases the pressure on in-house developers. You can hire any outside developer according to your needs. You can hire them on an hourly basis. As a result, it will save you many resources.

6. Reduce the Risk of Recruiting the Wrong Developer

It is not always possible for you to recruit the right developer. A recruiting process goes through several steps. These are a time-consuming process. With these several steps, the risk of recruitment is high. If anything goes wrong, the whole process goes in vain. It will also cost the company and misuse resources.

It’s better to choose the option of outsourcing. You can hire expert and experienced developers in no time and at a low cost. It will also save many resources for your organization compared to in-house development.

7. No Need for Micromanagement

If you go for the outsourcing option for your software development project, the project manager will look after your project. In case of any issues with the software, the project manager is the first point of contact.

You can sign a contract with the outsourcing software development company. After that, they are bound by all the conditions of the contract. They can’t copy or re-sell your projects elsewhere. They also provide you services after the sale if there is any issue regarding developed software.

8. Help in Focusing On Core Competencies

It is necessary to focus on the core competencies of startups. Startups should not divide their focus into different areas. They should focus on their strength and outsource all other things.

You can’t deny that outsourcing is a good option for startups. With outsourcing, a startup not only gives strength to its core area but also optimizes its process.

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9. Easy Availability

In the past, it was not easy to outsource software development projects. Outsourcing was not readily available. But now, the scenario has changed. Everyone is outsourcing. Outsourcing is available in no time. Just open the internet and search as per requirement.

The best part is that you can hire developers hourly and avoid long-term commitments. Giving them a fixed salary and other benefits will not be wise.

You can hire developers by outsourcing the project hourly from a reputed software development company.

Read Also: An Ultimate Guide to Modern Software Development Security Risks


If you like numbers, here’s some stat for you.

Do you know that the average MVP development time in-house is nearly double that of outsourcing?

In other words, if your product takes 3 months from ideation to launch, outsourcing it can help you do it in 30-45 days. While outsourcing has benefits, it is equally important for startups to mix caution with innovation.

Instead of outsourcing all your needs at once, you can start small and then scale as per your needs. Look for partners who not only get the job done efficiently but also bring innovative solutions to enhance your product development.

At DreamSoft4u, we suggest a strategic approach. Instead of handing over all your needs at once, start small, assess the results, and then scale up as needed. This way, you minimize risks and keep better control over your projects. We’re here as your technology partner, guiding you through this journey with a mix of caution and innovation for lasting success.


1. What are the advantages of outsourcing for project development?

Outsourcing can potentially expedite project timelines, reduce costs, and bring in specialized expertise.

2. Do you charge hourly or upfront on projects?

We have hourly, monthly, and project-wise engagement models. So you can choose as per your needs. 

3. How do I choose the right engagement model for my startup?

Consider factors such as project complexity, budget, and desired level of control. DreamSoft4u  can provide guidance based on your specific needs.

4. What’s the typical team size startups hire from you?

We provide flexible team scaling for startups. Whether you’re starting small or expanding for a larger project, our approach is customized to meet your specific goals.

5. Do you collaborate with in-house teams too?

Yes, we collaborate seamlessly with both in-house and remote teams to meet your project needs.

Sanjeev Agrawal

Sanjeev Agrawal

My name is Sanjeev Agrawal. I am a Director and Co-founder of Dreamsoft4u, IT Consulting Company. I am having a keen interest in the latest trends and technologies that are emerging in different domains. Being an entrepreneur in the field of the IT sector, it becomes my responsibility to aid my audience with the knowledge of the latest trends in the market.