Let’s begin with the definition of startup, according to Wikipedia.

Startup is an entrepreneurial venture which is typically a newly emerged, fast-growing business that aims to meet a marketplace need by developing or offering an innovative product, process or service.

Building a New startup is little difficult because you need to first ensure that your startup offers value in term of innovation, quality, and convenience to the consumer, even though you have limited amount of money.

Also read: Why your startup needs an inbound marketing assessment

According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months which means a whopping 80% of startups crash and burn. That’s too sad.

If you do not want your startup to fail then the first thing you need to do is find the perfect balance of a team. But before this, you need to find the answer of this question whether you want to build your own team or you want to hire a custom software development company.

In this article, we will give you a deep insight of this question which will definitely help you in building a successful startup.

What do you mean by building your own team?

Building your own team means hiring people in-house. In this approach, the team which you have develop in-house develop your product.

This approach is suitable for a long-term project because the in-house team takes a time to develop a product.

But, remember one thing when you are developing a product in-house, you should first know what you are doing and how you will manage your in-house team.

When you should consider in-house development

1. When you have experienced team, who ensure you that thing will not go wrong.

2. When you have enough time to find the right talent who are dedicated to work with you.

3. If you know how many feature you want to deliver in given period of time then you can plan for in-house development.

Advantages of Building your own team:

Shared vision


Hiring a full-time developer means hiring someone who really believes in your vision of building something that will change people’s lives and they will do whatever it takes to make it happen.

They are much more committed than outsource developer whose main priority is only to maintain the client base. They did not care about your vision. The only thing outsources developer care is money.

At the same time


Hiring a developer in-house is just like hiring someone who lives and breathes in your culture.

An in-house developer is someone who being in the same office, the same meeting, understand your business objectives and challenges and create a product which is a better fit for the end-user.

In addition to this, they connect more easily with other departments, grasp how things are moving and react with agility increasing the chances of achieving said business objectives.



You want someone who is always there for you and helps you in everything.

Hiring a Developer is just like someone who work in-house, sits next to you and know what’s going on and can change direction quite easily.

Your in-house developer knows what challenges the business is facing in other areas, such as sales and marketing, and can offer potential solutions for it.

Quality control


A huge issue most of the startups face is the Quality control of the App. Think, how do they can control if they outsource their work.

So, they need to hire someone to do a test project to see whether they are a good fit or not.

Hiring a technical developer in-house helps you in controlling the quality of your software because they know about your product from start to end and they are the one who wants best from your product more than you do.

Disadvantages of Building your own team:

Lack of professional knowledge

If you are planning to develop basic software then probably this won’t be the issue but if you are planning to develop sophisticated software then your team of in-house development may lack the knowledge of expertise of handling the entire task.

However, if you want to develop a sophisticated software then a lack of knowledge of your team will lead you to develop a bugged software.

Lack of Scalability

As you know that technology is constantly evolving and it is important that you’re in-house software developer change your software rapidly according to the changing need of your business.

If it is not changed according to the changing need then there is a chance that your developed software may get defunct in few years.

And this can also force you to spend more money on upgrading or developing new software which can be troublesome for your in-house team.

It can be costly

It is one of the major problems new startup faces when developing software in-house because finding right people and training them can be costly.

And as you know that training never stops, you need to constantly update the skill of your employee so that they can stay updated with the latest trend and skills.

If your employee skill is in demand, then you need to pay your employee more in order to keep them within your company.

So, if you are planning for in-house development then you should have enough money in your pocket to make thing going easy for you.

Also read:How to keep your startup’s customer acquisition costs low and keep your business from failing

It takes a lot of time

Yeah, you heard that right because you cannot hire someone whose skill set is not fit for your business; you need to find the right fit. And in this competitive world, a demand of right talent is so high that finding them can be a little time-consuming.

What do you mean by hiring a custom software development company?

Hiring a custom software development company means hiring someone from outside to manage a certain portion of work.

It is a business strategy, which done through negotiating contract agreements with a vendor who takes on the responsibility for the production process, people management, quality, customer service and key asset management of the function.

Remember this approach is generally more expensive for a short-term project.

When you should consider outsourcing

1. When your employee does not have a particular skill set to complete a certain task.

2. When your budget is limited, you can think of outsourcing because it cut your operational expenses and increase your  profit.

3. When you want your product to deliver in the market faster than your competitor does.

Advantages of outsourcing:

Labor costs


Most startups think outsourcing as a viable option because of the availability of cheaper labor. It’s simple formula why to pay more if you can arrange someone from another country to do the same work at low-cost.

According to industry analysts at Gartner, 80 percent of companies name cost cutting as the main reason for outsourcing.

As startups, you simply want to increase your gross profit and this can only possible if you save your money on labor and operational cost, outsourcing to another country at lower cost helps you to save your money.

Project specific hire


It is not easy to find an “expert” on a software development without committing long-term. Unless if you have lots of bucks in your pocket than it can be possible.

But, if you don’t have enough bucks to employ someone full-time then outsourcing the specific project is a valid option because it has an ability to bring an expert on a project basis without committing long-term.

Outsourcing firms provide you people with varying skill sets which give you an opportunity to source what you need for a certain time frame. It just likes a talent pool where you can find people of different skill set, who are ready to work for you at low-cost.

No Office Distractions


This may be sound silly but many office environments are the huge distraction for developers.

With this distraction in an office environment, it is impossible for the developer to deliver a project on time. This usually means a developer needs to work extra hours to deliver a product on time.

By outsourcing the work to another country you can remove the barrier of distraction and decrease the lead time in getting your idea converted into product.

Improved Quality

Magnifying Glass created in photoshop with the words focus on quality

Outsourcing your work means a team of highly skilled developer will create your software that means bug-free product. Going outsourcing route almost guarantees software of high quality.

Disadvantages of Outsourcing

High Support and maintenance cost.

Outsourcing can accrue high support and maintenance cost. In order to address any technical issues, you will be at the mercy of a vendor who sets and can change the price of service.

There may also be a waiting period for support, and you may have to jump through hoops to reach a technician. This can end up costing time and slow operations.

Quality Risk

The quality of a product is at risk because you can’t be sure what exactly you will get in the end. And the reason behind is a lack of professional knowledge.

How do you make sure that the code written for your product is high quality? How do you even judge the developers on outsourcing sites who list their portfolios?

The quality risk is the huge issue when you are outsourcing the work.

Collaboration problem

Software development is a collaboration process and if you are outsourcing your work then collaborating with the overseas developer can be a problem because you can’t really expect overseas developers to understand what you’re asking because they are coming from a different context.

That is why collaboration with different country employee’s can be a huge problem when you are outsourcing your work.

Logistical Challenges

Having a developer in different time zone create problems because you have to wake up in the middle of the night for conference calls with a developer team, a time when they likely wouldn’t be doing their best work.