We all live in a magical time, an era of innovation, in the age of unicorns. Everyone who reads tech news at least once in a while can’t help but get inspired by startup success stories. In reality, though, it turns out that building a tech company that will last is not as easy as it may seem, and stories of failure are much more common than journalists lead you to believe.
While there are more than 400 unicorns in the world, as many as 70% of startups fail. Other stats can be even worse — consumer hardware companies fail more often, with a shocking 97% rate. Startup Genome analysts shows that 90% of all startups will sooner or later die. As bad as it sounds, there may be a way out. Instead of focusing on the sad side of entrepreneurship, let’s think of what can be done to prevent those failures. What can startup owners do to make their journey easier and more enjoyable? Is there someone to help them survive, concentrate on their goals, and succeed?
Why Startups Outsource
At first glance, outsourcing is not a startup thing and is usually associated with big business. Yes, large companies have enough personnel and other resources to get their work done, but they often choose outsourcing as the best way to maximize their profit, increase work efficiency, and improve the quality of their products. On the other hand, startups, afraid of additional expenses, tend to cut corners constantly. The truth is startups should outsource as much as big companies do, if not more.
Many well-known brands have outsourced their development to get their business off the ground, and many of them continue to delegate at least part of their work. For example, Skype’s success would be impossible without three Estonian developers who created the company’s application back-end. Back in the day, one of the most popular corporate communication tools, Slack, outsourced the design of its web interface to British MetaLab, and as it turned out, it was a very good idea. And the case of daily deals website AppSumo shows that sometimes it only takes one remotely-based developer and a few days of work to get the big startup journey to begin.
If we think about the long-term perspective for businesses, scarcity of the resources means that you have to prioritize. This is particularly relevant to IT-related tasks. Another important point is that newborn companies often don’t have enough hands to solve their challenging tasks effectively. A startup may have a brilliant idea, and its CEO may be very ambitious, but even the most talented specialist cannot build a company alone. The third problem follows from the fact that startup projects are often based on innovative business ideas. This often means a lack of know-how both in the development team and in the local market in general.
Our team can start thinking about your project while you’re reading this article.
There are many other obstacles a startup may face both in the beginning and throughout their entire journey. They’re precisely the reason why startups should outsource. Let’s name the most challenging ones:
You may have the most innovative idea and be very passionate about bringing it to life. Yet, if you don’t get your product to market quickly, you’ve lost the game. There are a number of circumstances that make the time to market speed a critical element of startup success. First, if you deliver your product quickly, it gives you a big advantage over your competitors. Secondly, fast TTM serves as proof of the reliability of your startup for angels and venture funds (the quicker you deliver your product to the market, the more chances you have to beat your rivals and return money to investors). And finally, fast TTM is of particular importance for startups entering some “hype industry” in which each day of delay can be your last day in the market.
In the fast-changing competitive world, a business should always offer more today than it offered yesterday. This includes providing new services, serving more clients, or bringing fresh ideas to life.
Scaling your business, though, requires high-quality specialists capable of performing complicated tasks in a short period of time. In other words, you should scale your team first. Obviously, not all startups start to earn money at once, so they cannot handle the overheads of expanding their staff internally. Every new hire comes with onboarding time, purchase of office equipment, and requirements for renting additional space. Outsourcing eliminates all of these issues and allows businesses to expand their design, development, and QA staff. This means that every dollar spent is spent on expanding the team’s size or the depth of its experience.
Every penny counts, and this is especially relevant for a startup. Even if a startup is lucky enough to raise a big round of venture capital at the beginning of its journey, it should spend wisely. Sticking to reasonable budgets and reducing startup costs should always be one of the main priorities. At the same time, a startup can’t sacrifice the quality of its product as it can lose the game from the start. Therefore, the only viable option for startups is to develop a cost-effective approach in their work and pay only for what they really need.
Hiring top-notch specialists
No matter how passionate young entrepreneurs are and how much they want to do everything by themselves — their time and skill set is limited. Startup founders may be businessmen in nature, but this doesn’t make them programmers, designers, or project managers. They can’t write any code or create a polished visual concept. Sometimes a startup is entering a very niche industry or building a very complex product, and they need specific rare expertise necessary to perform the challenging tasks. Sometimes this expertise isn’t available locally. No matter what the cause, the truth is that a lack of hands can become a real problem for a young company.
What defines a real startup is their flexibility, agility, and the ability to scale an innovative business model confidently. Being a startup means maintaining a healthy workflow in stressful phases — adjusting the workforce according to the immediate business needs but still remaining focused on the main strategy and core tasks. This can happen before the product launch, when new ideas must be implemented quickly or when a startup is expanding its business and enhancing its growth. In other words, startups should embrace flexibility, so they can pivot when necessary, without things falling apart.
No matter how awful those challenges may look like, startups have good chances to tackle them successfully. The answer to many problems of a young entrepreneur is called outsourcing. Even if you are building your first startup, you don’t necessarily have to make every beginner’s mistake by yourself. But with no experience, how to avoid these mistakes in your own game? The simple answer is to find a technical partner.
What Tech Partners can do for Startups
The right technology partner is a guarantee that even inexperienced entrepreneurs can quickly and confidently build up a company they couldn’t even imagine.
Do you still have doubts about outsourcing your IT tasks? Let’s look at what exactly a tech partner can do to help you achieve the most ambitious startup goals.
Outsourcing, Prototyping, and MVP Development for Startups
Every startup project starts with either a prototype or a Minimum Viable Product (MVP).
A software prototype is an incomplete version of the product aimed at presenting a complex idea to its target users and investors in a realistic form. Each startup has a unique approach to building a prototype. Some focus on presenting the core values and ideas of a projects while others focus on bells and whistles that can impress potential investors.
Moreover, each company’s approach to planning their prototyping stage differs as well. Some opt for vertical prototypes, which go “deep” into the functionality of the software to demonstrate how it solves a problem. Others go with horizontal prototypes — demos that build a broader picture of what a product will do without digging into the nuance of how it will do it.
In both cases, a prototype is an incomplete version of a project.
An MVP, on the other hand, is a nearly completed version of a project. It is the first iteration of a project that is technically ready to see the light of day and be used by people.
Creating both a prototype and an MVP is essential to the success of a startup.
First, they are a perfect tool to avoid the expense of creating functionalities that no one will use. With the right minimum viable product, startups get valuable feedback from real users, collect usage patterns, and can make better decisions about the changes and improvements they will need to introduce in future versions of the product. In other words, an MVP is an essential part of a startup launch strategy and its journey to a product-market fit.
Since bootstrapping (building a business with personal savings) isn’t for everyone, most startups eventually face the problem of having to secure funding. If you are applying for an incubator/accelerator program or launching a crowdfunding campaign, MVP definitely sets you above your competition. We consider MVPs as a great way to persuade investors that you are not just looking for easy money, but believe in your idea and are ready to invest your own resources in it.
Prototype or MVP? We’ll help you choose.
Due to the limited budget, young companies should carefully consider when and to what extent it makes sense to outsource their IT tasks, in particular, the startup MVP development. However, under some circumstances, putting MVP in the hands of an external team is the right thing to do. The first case refers to the situation when your startup team has no tech co-founder/СTO, and has never built a tech solution before. That means that you have neither MVP-oriented vision nor a well-thought-out plan nor the ability to manage the development process skillfully.
However, simply having a tech-savvy manager on your team often doesn’t solve the problem. Building MVP for startups (as well as startup prototype development) often requires a team effort and if you don’t find developers who know how to get the job done, your project won’t be successful. You can set up your own startup development team, I guess, but recruiting is a tedious process. And your startup probably can’t afford to employ a full-time top-notch team.
At the same time, outsourcing complicated parts of your project sounds like a reasonable step. Experienced software developers will not only help you with your MVP but will evaluate your idea from multiple perspectives and identify the areas that might need improvement. Moreover, an efficient team will ensure that the process of MVP creation will be properly structured that will lead to the development of a strong codebase.
Outsourcing Website Development for Startups
The startup world is highly competitive. Everything you do should make you stand out. Every public-facing component of your business plays a role in attracting investors’ attention and finding new customers — from your CEO’s haircut to your startup’s website.
With so much pressure, how do you decide what your startup’s website should say about the company? How do you use your online real-estate to highlight your values and present yourself? What is the role of a startup’s website?
A startup website is:
An Information Tool
More and more people around the world use the internet to get information about products and services before actually making a purchase decision. This makes a website a great tool to present and promote your products as well as provide your contact details so that potential customers can reach you whenever they need it. A website is also an important part of investors’ learning experience about your company. With the help of the website, they can familiarize themselves with your startup or find the answers they need to make their investment decision. In other words, this is the website that may help you to get long-awaited funding.
A Promotional Tool
As more and more consumers buy services with their mobile and laptops the necessity of having a website becomes increasingly apparent. According to Statista, in 2021, more than 2.14 billion people are expected to buy goods and services online and this trend will only intensify in the future. It comes with no surprise that any company present online has much more chances to increase its sales and find new customers. And it is not only goods or services that a website lets to promote. The right website just as easily can “sell” your brand or help you spread the right ideas.
A Branding Tool
Having a brand in today’s world is not a matter of choice but a necessity. You may say that your company is too young or busy for that as you are still building a prototype or focused on fundraising, but there’s a greater reality. A brand is something that makes your startup special, recognizable, and consistent as a business and you have to start developing it as soon as possible. The next step is to make your brand work for you and bring your startup money. But how will people know that your brand exists? What is a proven way to communicate your brand to the world? Exactly. A website.
A Competitive Advantage
No matter how creative your business idea is, how high are the chances that it is unique? And even if it is unique at some point in time, you will have at least a few competitors very soon. But do all of them have an easy-to-use and attractive website? Probably not. So it is just the right time for you to create one so your startup can stand out from the crowd and provide a much better experience to its users.
A Communication Tool
You should also look at your website as a strategic communication tool. This is especially true for startups. A website is a great opportunity to get to know your customers, receive feedback on your product as well as many other useful insights. With the help of a website, clients, for their part, can ask questions and reach the company representatives if needed. You can also communicate all your updates via a website. Whether new offers, product upgrades, or any other thing happens, you can publish it there. This, in turn, helps to build trust, thus making your startup more loved and more popular.
There are plenty of objective reasons why a startup needs a website, but the equally important question is how to create a great one. With the new approaches constantly evolving, this task has never been easy and gets even more complicated if we are talking about the best website for a startup business. In addition to the important standard features of a modern site, such as usability, compatibility, accessibility, many other criteria should be taken into account. This includes:
Ease of navigation
Navigation is an important part of any website, but it plays an even more decisive role with a startup. Because the goal of the startup’s site is not only to present the project to the users, but to investors, it should be as easy as possible. None of the investors will spend time on guessing, so the main ideas, as well as the answers to the most important questions about the startup, should be found on its website intuitively.
The worst thing you can do while creating a site for a startup is to use old-fashioned approaches and well-known schemes. What you should do is to present a startup website design in a new fresh way that will be associated with changes and new modern trends. One thing that should never be overlooked is the colors you use, as they must perfectly match the main idea of the project. For example, startups creating solutions for a green economy should have a website with various shades of green. At the same time, projects that build innovative tech solutions can use dark themes freely.
A startup is a story about innovation, young people, and new thinking. Its website should reflect these ideas perfectly (unfortunately many young companies have a problem with that). Any startup that wants to attract the attention of investors and potential clients can’t just write a few sentences in the “About us” section or put a gallery in “How the product works”, but should find new innovative ways to make their project – their website – memorable.
Website development for startups is not an easy task and should be performed by experienced specialists. QArea’s team has been providing website development services for over 19 years. We have been working with companies of all sizes — from the early-stage startups to well-established businesses. We offer easy-to-use, modern websites with a professional design that helps our clients to achieve their most ambitious goals. The examples of our work include:
But what if things are more complicated and you need much more than an MVP or a website. What if you want to build a full-fledged innovative tech product but have neither technical co-founder nor tech knowledge under your belt?
Launching a Product Without a Technical Team
Many people believe that entrepreneurs can quickly build their startups without a single line of code. Yes, some well-known brands like Stripe or Groupon managed to start their business with 0 developers. Also, there are plenty of tools that can help you launch a project without technical skills. But at the end of the day, even the most holistic approach and the most sophisticated tools cannot replace a tech specialist.
Why should a startup outsource software development?
If you are a startup, forming your own development team may be prohibitively expensive. Not all companies are up for the task when they are just at the MVP stage or simply want to fill the temporary labor gap. But the shortage of hands may be one of the biggest obstacles on the startups’ way to achieve the goals they pursue.
Let’s imagine that a project suddenly receives funding, and a developer is urgently needed, but nobody applies for the position. Or a startup may need a specialist in a very narrow field and simply can’t find such a high-class expert on the local market. Other startups may have temporary shortages in human resources, caused by holidays or unexpected events. As bad as it sounds, the recruitment can last for months, which can have severe consequences for the startup’s future. Is there a way out? Sure.
Thousands of tech startups all over the world choose outsourcing as a tool for achieving their short-term and long term goals. Outsourcing an app development to an external specialist can save a startup a good amount of money, and implementing a complex project with the help of a dedicated team can bring a startup to a whole new level. Let’s look at the benefits of cooperation with external specialists in more detail:
- from many companies operating on the market, you can choose one that gives you the best proposal
- your startup doesn’t spend money on equipment, offices, health insurance, etc.
- you have an opportunity to get an initial valuation of the idea and negotiate the terms before the project begins
- the specialist (s) you hire not only fills the labor gap but also creates an added value to your project as he can evaluate your ideas from different perspectives
- you pay for the tasks performed, and not for the availability of the specialist/team.
According to the Fractl survey, 11% of founders cited inexperience or skills gap as a reason for startup failure. One of the biggest advantages of working with an external team is that you don’t have to worry about the things you don’t know, instead, you can concentrate entirely on the concept and the strategy of your project. Moreover, once you have found a developer for your startup, you get much more than a result when a job gets done.
Obviously, startups aiming at scaling their businesses need developers too. The Economist’s research showed that 90% of firms think of outsourcing as an essential factor for their growth. This is especially important for startups focused on rapid growth. Once you’ve decided that you need a dedicated team, the next question you need to answer is how to choose one.
How to Choose Your Outsourcing Technical Partner
It wouldn’t be an exaggeration to say that your tech team will shape the future of your product, thus, the future of your startup. Therefore, you should develop a very holistic approach while choosing tech talent for your project. What is the right way to hire developers for a startup?
The basic checklist for the team of your project (and for your project in general) will look like:
- Project card
- Project plan
- Assignee CVs
- Test plan
- Testing and development environment
- Technical documentation
According to Pivovarov, the checklist of the future startup project should contain a list of roles (a project card) of the project participants and their workload (usually indicated in percentages).
While the quality of a product should always remain among the startup’s priorities, developers can not always conduct tests by themselves. “At QArea, we always offer to include testers into the project team, who will analyze the requirements and create a comprehensive test plan”, — says Pivovarov. And the final point of the list is technical documentation, which usually refers to the document that contains a software architecture diagram (SAD) and software deployment diagram (SDD), which can be complemented by other data in the development process.
Does your startup need a Outsourced CTO? Probably
The developers will help you build your product, no question about that. However, just a development team is not enough to achieve your ambitious startup goals. If earlier startup founders, especially when they have some tech background, could take over some CTO responsibilities, in today’s highly competitive business world it becomes increasingly difficult. It would be best if you had a tech leader, therefore you should consider finding one.
How exactly can a CTO help? A good CTO is not only a manager with advanced tech knowledge but also a business-oriented professional who is capable of looking at business through the prism of technology. A CTO is a high-level professional who is not only responsible for managing the company’s tech resources but who defines its development in the tech field.
A CTO can be a very helpful specialist both for early-stage and mature startups. If you are not sure, whether you need a full-time CTO (or simply can’t afford one) you should consider more flexible and less expensive option called CTO as a service (CaaS):
The CTO as a service responsibilities in a startup often include:
- Designing software architecture
- Choosing technology stacks
- Defining a tech strategy and a product roadmap
- Contributing to product development
- Hiring and managing tech talent (in particular remote teams)
- Planning the QA and testing
You can start working with a CTO at different stages of your project development.
There are many other examples in which startups chose to put scalability first right away. They choose an expensive tech stack, a complicated (but scalable) architecture, and an aggressive approach to growth. With that kind of ambition, going forward without a Chief Technical Officer is simply not an option.
Ensuring Quality with QA Outsourcing for Startups
As has been said before, your project team should include not only developers but also QA- engineers. Why? Just like in any business the goal of a startup is to win as many clients as possible and to build strong long term relationships with them. However, many startups for some reasons, don’t understand the fact that client loyalty can only go hand in hand with the quality of the product, thus, with the quality assurance processes that the startup has built.
While startups create their product in a dynamic and stressful world, this environment has a dramatic impact on the goals and opportunities the QA brings. Those include (but not limited) to:
One of the key goals for each startup is to build trust with customers and stand out from the competition. It is more than clear that bugs, faults, and errors accompanied by negative user reviews may do a lot of harm to a young company. And for any startup, once its reputation is broken, it is hard to renew the trust. In order to prevent this undesirable scenario, the right QA measures must be set out.
Due to the high level of competition, startups have to act as quickly as possible and create their product fast. Startups should also be flexible enough to respond to customer fast-changing needs and to be able to adjust if needed. Quick release, though, doesn’t mean that you can scarify the quality of your product, so you’d better carry out QA and testing in advance (or simultaneously with the development phase). This will allow you both to improve the product creation process, get a market-ready quality faster, and make changes in time.
Ability to scale
At the beginning of your startup journey, you cannot know whether people will like your product or not. At the same time, it is wise to plan for scaling your solution at once. One of the essential elements of a scalable product is well-designed architecture. What helps to receive a deep insight into the architecture of the software right from the beginning is the right QA process. With QA, you can be sure that you won’t create a non-scalable solution or a solution that can be scaled but requires considerable maintenance costs.
As many startups process sensitive data, including personal or financial information, they should always remember about the security aspect of their work. As startups often work with incredible pace, the security part can be easily forgotten. This should never happen as security is of critical importance both for end-users, who simply want to feel safe, and for VCs, who are looking for a stable project to invest in. QA helps in this case too. With the help of testing and QA, you prove that your product not only meets the quality requirements but also is stable and secure in every way.
A startup is an example of “go-getter business” aiming at achieving goals fast. This may stop startups from even thinking about testing and QA. But even if the perfect product has never been the main concern for the startup, quality assurance is the main tool for identifying and eliminating errors that allow getting ready-to-market product faster. Software testing for startups is also a crucial element in the optimization of the value creation process, therefore a critical factor in the product (and company) success.
Regardless of whether you involve QA experts during the development phase or when the product is completed, high software quality means corresponding costs. However, you can’t compare it with the price that business pays for poorly developed software. Understandably, the startup team usually works under enormous time and cost pressure, however, if the founder’s decisions are not made in favor of quality, this often costs the startup far more. The negative impact can be felt in a number of ways: dissatisfied clients and employees, difficulties with scalability or maintenance of the product, and, obviously, the money loss.
Look at some big brands that experienced it first hand. Once Toyota had to recall almost two million Prius cars due to a software bug. The software breakdown at Deutsche Bank caused a number of customers to lose their money. Security glitch at Google exposed the private data of nearly 500 thousand people using the social network. Those are just a few examples of how horrific the consequences of software failures can be and why testing is required.
By getting the priorities right, a startup can implement QA with limited time and costs. This, in turn, would yield a much greater boon than a quality product — you will get client loyalty and more sustainable success.
So, after all this, how to find a technical partner for your startup?
Developing or testing software for a startup is not as hard as it seems. Today startups can produce world-class software, on time, and under budget. All they need is a reliable tech partner who can help them overcome their challenges on the way to becoming a successful business.
However, the story about the right technical partner is not just about getting the job done, but also about preparing your startup for future growth by bringing your product to market fast and using new technologies more effectively. This makes the search of the startup tech partner a challenge itself. But no worries, if you treat this question seriously and consistently, you will succeed. Let’s look at the most important criteria when choosing the right tech partner for your startup.
Vision and critical thinking
The right tech partner is not only someone who does the work well but someone who makes recommendations that fit your startup and your stage of development.
Experience and expertise
A startup needs help from experts who are capable of understanding their business model, their needs, and the technologies they use. It would be great if the outsourcing company had experience in working on similar projects and was familiar with your industry.
Ability to think big
Although a partner must have a particular specialization and extensive experience in a specific tech stack, the diversity of its experience can be a huge advantage too, as it may help you to implement new innovative solutions sometime.
Partnerships, memberships, and awards
If the provider delivers exceptional service to its clients, his efforts will certainly be recognized. Check whether your potential tech partner is included in any respectable listings or has some prestigious awards.
Partnerships are important too. If your potential tech provider is, for example, a Microsoft partner, it means that its employees are trained in the implementation or support of complex Microsoft products.
Both the high quality of the project and the smooth process of the development are of critical importance for startups. Is your partner committed to quality? Does it have a proactive approach to manage its projects? Are its processes thoroughly documented? If the answer to all these questions is “yes”, you’ve found the right one.
During the development of an innovative solution, the need for IT services can fluctuate significantly. The ability to react quickly to changes in demand and create no bottlenecks often determines the success (or failure) of a startup. The right partner is the partner that helps you to meet these challenges effectively.
It is vital to make a risk assessment and take this into account while drawing up a contract and a process design. With this in mind, it is essential to know your own security needs and to request your partner to act accordingly. Good contracts are the ones that build transparency, liability, and legal certainty environment.
Education, certifications, and accreditation
IT is one of the most fast-moving industries; it is, therefore, important that the vendor’s specialists undergo training regularly. Various certifications demonstrate that the service provider has the best practices possible. A good indicator is when a company is certified according to a globally recognized standard ISO 27001:2013 that proves that it treats and manages the risks effectively.
Another critical criterion when looking for a tech partner is the quality of communication. Technical expertise is important, but it doesn’t guarantee you a successful project. The right partner is the one with good communication skills that will always provide sufficient explanation and keep you up to date on the progress made.
Even if you are building a simple solution today, it doesn’t mean that you don’t have big plans for the future. A great tech partner is someone that should be able to help you to build the most complex products and achieve your most ambitious goals. No matter what your business plan is, with the right tech partner, you should get access to a wide range of specialists — from developers to project managers, from DevOps experts to UI/UX designers, from AI specialists to QA engineers and so on.
Let’s launch your startup!