Top Five Reasons Startups should leverage Offshore / Nearshore Development Partners
By Matheo Pegoraro, VP of Service Delivery at e-Core
So you took the leap and started your company. You are on the path to implement a cool idea and most likely have already created an initial version of your service and put it in production to start gathering much needed real world feedback. Chances are you are looking for additional development help and investors that would allow you to scale your company to achieve your mission.
In order to grow your team, the first approach is usually to hire or partner with local developers, including friends and former colleagues. While this can still be the first and best-proven approach to start, it can only take you so far. You then face the inevitable need to hire or contract additional technical team members. While you will still need or want a strong core local team, you have the ability to leverage Offshore Development teams to scale, which can bring you many advantages. I would like to discuss some of them.
As a tech startup company, you want to focus on developing and proving your idea, bringing it to market as soon as possible. You also want to make sure your time and energy and that of your co-founders and key people are being invested in activities that move your company forward everyday.
An Outsourcer, including Offshore Development providers, can eliminate the need to spend excessive time in administrative, HR and legal issues by leveraging their already established structure.
This gives you more time to focus on Product Development (features, analytics, strategy) and Business Development (meeting with investors and partners).
2. Access to Technical Team
Sure, everyone wants to find and hire the best talent. However, it is not always possible due to many factors. For starters, there is extremely high market competitiveness, especially in Silicon Valley and New York. Even Google, a perennial best place to work, faces difficulties keeping their people from fleeing to competitors such as Facebook, so we all have to face the reality that our team will also be constantly tempted by a hot market.
As a startup, you also face the need to sell your idea and vision to your proposed team members, as they may have to give up the security of working in a more established place to venture into a company that may as easily not be around in a few months. Not everyone is willing to take the risk, and even when they do, there is usually a high price tag associated: your equity.
An Outsourcer, including an Offshore Provider, can offer a more stable environment to technical resources, one that would offer other alternatives should one of the projects not be successful. Additionally, working for tech startup companies offers an interesting challenge for offshore technical teams that would not otherwise have the opportunity to work with such US based companies. These and other factors allow them to recruit and retain some of the best talent in their own markets and make it readily available to you.
3. Return on Investment
Lower Cost has usually been the first thing to come to mind when considering working with an offshore team. While it is an important factor, it is far from being the only. Nevertheless, it is hard to argue against the attractiveness of having rates 30-50% below your local rates to get the same job done. This is even more important as you scale.
4. Access to a team with proven delivery capabilities
As a Startup Founder, you are not necessarily a technical person or a software architect yourself. Even if you are, you want to make sure you surround yourself with people that have experience with Agile practices and Web and Mobile development languages and frameworks.
An Outsourcing partner can provide you with the expertise on these areas, bringing the best practices and people to your company from day one. They can also easily integrate with your technical leadership for further scalability. The right partner will also have had experience assembling and managing high performance teams, with right combination of skill sets and personalities, and will use this experience when assembling a team to meet your needs and fit into your company culture.
As a tech startup, you more than likely follow at least some of the Lean Startup principles and use Agile software development. As such, you want to have the flexibility to increase your throughput when you have a larger backlog and reduce it if needed to better control the use of your capital.
An Outsourcer provides more flexibility to grow and reduce a team based on demand than you would otherwise have by hiring local employees and contractors yourself.
Is your startup using or considering using an Offshore or Nearshore Development Partner? We are here to help and to discuss any concerns you may have. Send us your comments and questions.
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