Is MVP outsourcing right for your tech startup?

Outsourcing a minimum viable product (MVP) is a popular strategy for growing startups. It can help you scale quickly and affordably, but it’s not right for every company. In fact, many tech startups end up with a product that doesn’t meet their needs and, because of poor choices in developers, just doesn’t deliver.

That’s why it’s important to know what to look for when you’re considering outsourcing and understand if it’s right for your business and product. Remember, an MVP is the software equivalent of a prototype in a manufacturing environment, and so its success, or failure, can have a big impact on the direction your business takes.

According to a Deloitte survey, around 70 per cent of companies who choose to outsource their software development projects do so to save money.

The basic steps of effective MVP development

Just before we dive headfirst into outsourcing let’s quickly give you some insight into the basics of planning out MVP development as part of your wider business. We can break the process down into six steps.

Market research: Sometimes ideas aren’t marketable. Before starting the MVP development process, take reasonable steps to ensure that there is a market for what you want to create. More information and insight give your MVP the best chance of success. Don’t just speak to consumers, look at what your potential competitors are doing too.

Understand how your product can add value: Based on your market research, what does the market need or want? What gap exists, that competitors aren’t already filling or certainly aren’t filling effectively? What can you build, in a short space of time, that is going to give users something new that they want and need?

These questions will quickly shape what your MVP will look like.

Map the user flow: The design of your MVP is crucial, and it must be user-friendly. Every time you make a decision that will impact how a user will interact with an MVP you need to view it through their eyes. Great flow from a user perspective will mean they never notice ‘using’ anything —it just works. This is what you should be aiming for.

Define your MVP’s features: At this stage, you can decide which features to include in your MVP and which are less important. The features that you must create are the ones that fulfill the user needs you established in your market research. If you have time and/or money, you can leave in some of the features that cover their wants, but you need to focus on what is most important at the start.

Launch: At this stage, you’ve done all the hard work in designing and developing an MVP. Now, you just have to get people to use it. This will likely begin with a small group of candidates you may have pre-selected as being people who the MVP will be particularly useful for so that you can guarantee that they’ll use it and help with the final step in the process.

Test, Test, Test: Now, every single step in this list is critical. But if you don’t test how your MVP is performing it will all be for nothing. You need quantitative and qualitative feedback on what you’ve built if you’re going to take it from prototype form and develop it further.

How does outsourcing development work?

If you’re looking to outsource your tech team, it’s important to understand how it works. Outsourcing is the process of hiring a company or individual to perform a task or set of tasks that would otherwise be done internally by an employee of your company – pretty straightforward.

In the case of MVP development, this can include anything from writing code, designing websites and apps, to managing databases and servers, building hardware prototypes, or all of the above so that your complete solution, at least the final one, is built by another team.

Day-to-day, you can organise your developers in the manner you want. Perhaps you want to retain project management and design in-house and just have the coding work taken care of outside your organisation. Some companies though, are happy to put the whole MVP project in the hands of an outside development team, freeing them up to focus on the rest of their business objectives.

It’s also very important to consider what development model to use when outsourcing, as this will have a big impact on anyone you have working on development in-house.

Pros of outsourcing

The biggest advantage of outsourcing software development is cost reduction. Typically, you’ll outsource to a country or region where there are plenty of talented developers, but the price of hiring them
is lower.

Outsourcing can be a good way to test the market. If you’re not sure whether people will buy your product, it might be worth outsourcing your MVP so that it can be developed at a lower cost. This is especially true if you don’t have enough
capital to risk creating a product that no one wants.

If outsourcing is done properly, it can not only be cost-effective but also time efficient and therefore allow you to capture market share before any of your competitors catch on.

Outsourcing can be used as an alternative to hiring new employees and/or as part of your business strategy — especially if you have plans for growth in the future. Outsourcing development cuts out the time and effort required to find and onboard great tech talent.

Cons of outsourcing

Outsourcing is a long-term commitment, so you’ll be relying on your partner to perform the work for some time. If they can’t fulfill your needs, there’s nothing you can do about it except request that they fix their work or get another partner, which is a big drain on time and money. Also, it might take a while before you find an outsourcing partner to begin with who can meet your requirements and is available at the right price point.

Offshore outsourcing sacrifices perfect clarity of communication due to time zones and language barriers, and so the cost advantage of outsourcing to countries further afield can sometimes be outweighed by the additional time it can take to communicate effectively.

Ultimately, if you get someone else to do development on your behalf, you have less control over the quality of the finished product than you would if you did it in-house.

Is outsourcing right for you?

The first question to ask to understand if outsourcing is right for you is: are you happy having less control over the development of your MVP? Yes, there are cost and time advantages associated with outsourcing, but they won’t be worth much if you aren’t comfortable with your product being built by someone outside your organisation. On the other hand, if you just want to focus on the core competencies of your company while letting those who specialise in certain areas take care of the rest, then outsourcing is a great idea.

It’s also incredibly important to understand where your business is right now and what your goals are. If you have big growth plans for the next 18 months, then you probably don’t want to spend the next six months building a team of developers. But, if you have more time, and money to play with, and your MVP doesn’t have to be in the market as soon as possible, then you probably don’t need to outsource.

How to choose an outsourcing partner:

Choosing the right outsourcing partner is a critical step for your business. The best ones will share the same values, are trustworthy, and have experience with your industry. Here are some quick pointers on things to consider before you open a dialogue with a developer:

Check if they are a good cultural fit?

You want to work with people who are friendly, open-minded, and willing to help. Check with their former clients, if needed.

How do they treat employees? When interviewing potential partners, look at their track record on treatment of staff – paying them fairly and giving them development opportunities are both good signs that you’re dealing with an ethical business that values its team members.

How long have they been in operation? A well-established company will have more knowledge than one just starting out, so there’s less chance of something going wrong during your project if they’re used to working with businesses like yours.

What kind of support do they offer during development? Think of things like documentation review and quality assurance.

How often does communication happen between teams? Will it be daily or weekly, and what tools will they use to communicate?

Remember: Outsourcing can help you get a product to market quickly and affordably, but it’s important to understand how to find the right partner.

The next step: Remember, once your MVP is complete, you’re going to have to move on to developing your minimum marketable product (MMP), so if you have found an outsourced development firm that does good work and aligns with your needs – you’re probably going to need their help again.

Anisha Sagar is the head of marketing and communication, Meydan Free Zone