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Should Your Startup Outsource Software Development?
Until recently, if a startup founder asked me this question I would have answered “no”. However, after investing in around 100 startups, working in a few and founding one my opinion on this subject changed and here is why.
Getting a startup to reach product market fit is hard. A startup founder needs to manage all aspects of getting the company to simply exist; including doing payroll, being in charge of legal, filling accounting paperwork, basic compliance, fundraising, etc, etc, etc. This is before even considering what actually matters: The product!
In an ideal world, the founder of a startup would only talk to users and based on their feedback decide what features the product should or not have and those features would manifest themselves with no further demand from the founder’s brainpower in the next iteration of the product.
However, when dealing with real world startups there are two main cases: The founding team includes a technical co-founder that lives and breaths software or they do not. In the former case, building software in-house makes perfect sense. After all, no one will build a software that is a better fit for the company then one of the owners of said company that also happens to be taking a huge pay cut as compared to working anywhere else in order to get their dream off the ground.
