How do you decide on the best approach to develop the product.?
Developing a product can be an idea for a Startup, an Enterprise, or a Mid-sized company. The objective is to develop a robust and scalable product/application that matches the current digital age which will fit any business or consumer.
The factors which need to be considered first are:
- Product Validation
“Leap and the Net Will Appear” By John Burroughs. - Budget allocation for the product considering a 2 to 3-year plan in developing and managing the product.
- Team Setup to develop the product.
- Post-launch management, Customer Success.
- Product review and Expansion.
All the points mentioned are completely on the founders, product owners, etc. whereas point number 3 is the most critical phase and needs a detailed plan and process. Irrespective of whether the product is from a startup or an enterprise, setting up the team is very important. We will discuss on what is the best approach for setting up the team.
Hiring In-House development team:
Hiring an in-house team is good. But setting up the entire team has a lot of bottlenecks as well. Let us discuss the pros and cons of setting up an in-house team.
Pros:
Investing in a new team is adding skill in-house- It is a value add if there is an in-house team. Once the product shows the success track then the team can also expand. Investing time and money in the team will surely add value but the team should stick around until the investment pays off.
You set the Target- The team will follow the guidelines from the working hours to commitment to delivery. This means that everyone is available and will be ready to collaborate at the same time.
Flexibility- The team cares about the outcome of the project they will tend to extend the work hours when needed and also will find the best ways to get things done. They will also get involved in suggesting better ideas, and participate in proactive fixes when a problem occurs.
Cons:
Ongoing cost addition- There will be unplanned expenses from tools, infrastructure, team replacement, and training costs, unexpected costs that can come from any angle.
Ongoing skill and team expansion even before the product success- There will always be a need to increase the team size when the product development needs more effort to meet the delivery timelines. When the product sees some changes in the requirement after understanding the market fitment the team also needs various skills to meet the deadlines and there is always a surge in investment to maintain the same team.
The focus of the founders and product owners gets distributed- The main focus of founders or product owners should be on the product’s success. A product becomes successful only if it fits in the market correctly and becomes a need for any business or customer. A product becomes the right fit only if the founders and product owners stay focused on the market. If the focus gets diverted to team management then the chances of the product not meeting the needs are more.
Hiring contractors:
Hiring contractors is a problem solved to an extent as there is no commitment to the team for the long term.
Pros:
Cost savings: There is no major commitment to contractors. The team can be ramped up the product development. Businesses can save all the added expenses like time off, overheads, infrastructure, etc.
Time to market: Contractors can be found very quickly and the delivery time is shorter compared to building an in-house time and developing a product. Every individual stays focused on their work.
Handpicked skills and developers: Contractors can be interviewed and handpicked. Various skills are available at short notice and the quality of development is rest assured. If the contractors are hired from an agency then the productivity of the contractors is also taken care of by the agency. This is the best value for money invested.
Flexibility- One of the primary benefits of hiring contractors is the flexibility they bring to your team. Contractors can be engaged for specific projects or tasks, allowing you to scale your workforce up or down as needed.
Cons:
Risk of dependency: Knowledge transfer after the development needs to be taken care of. There is a minor risk involved in taking a handover from a freelancer but the risk is less when a contractor is hired from an agency as the agency is responsible.
Communication Challenges: Contractors may not be physically present in your office, leading to potential communication challenges. Effective collaboration and knowledge sharing may require additional effort, especially if your team is distributed across different locations.
Outsourcing or Offshore development:
Outsourcing means that you hire outside resources to help you complete tasks or projects. These might include freelancers or agencies that specialize in performing a particular type of task or project.
Pros:
Cost-effectiveness- Outsourcing a project is more cost-effective than managing everything in-house. It is highly cost-effective if it is outsourced to a country that has a lower cost of living and has access to various talent pools.
Flexibility- The growing in-house team is time-consuming. Finding the right candidate outside and having them go through the interview process is always a time-consuming task. The possibility of the candidate joining is also a point to be considered. The outsourced team brings in lots of flexibility in terms of billing per developer based on effort, using only the developers needed for that particular time, etc. This way a lot of money is saved.
Quick team ramp up and ramp down with access to various skills in a shorter time- The outsourced agency or team can quickly help in ramping up the team and ramping down based on the need. A quick expansion of various skills is also possible.
Faster time to delivery- The outsourced team or agency will adhere to committed timelines and delivery. Picking the right agency who will be a subject matter expert can help plan for GTM in a shorter time.
Current in-house team focus remains on product success- The current in-house team focus remains on product if the development is outsourced. The chances of the product becoming successful in a shorter span are higher.
Cons:
Lack of communication- The team will be committed to delivering as per the agreement but the communication might not be more often.
Less control- There might be less control on the team who is working on the development. Some developers might not respond immediately to work on a fix or to add a feature. Some developers might not be flexible enough to put in extra effort to help get things done.
Conclusion:
Among all the options mentioned Hiring contractors from an agency and outsourcing is the best option for any startup or an enterprise for reasons like.
Cost savings, a wide range of skills available in a shorter time, GTM as planned, and chances of product success are faster as the founders and product owners stay focused on the product and do not waste time managing the team and solving daily problems. You must ensure that you handpick the right organization for your development. Any good organization will allow you to interview the developer before the development starts so this way the right team is set up even if you outsource or hire a contractor.
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