How Outsourcing Works for Startups

Outsourcing lets a startup go from idea to working product without first setting up a development office or hiring a full in-house team. The approach works best when the partner communicates consistently, protects your intellectual property, and can adapt as requirements and funding change. Since 1998, Sibers has delivered more than 1,700 software projects, many of them for early-stage startups, and continues to support products after launch.

There are many reasons why outsourcing is the best choice for startups, and each one is equally important. For example, outsourcing means you don’t have to establish a development office. It also means you can save money on employee hiring and education. Moreover, with outsourcing you’ll receive consistent pre and post-launch support, and you’ll benefit from swift prototype development for investor funding. All of these reasons are important, but there are several other factors that are equally important to your success. Factors that are especially important for startups looking to build a solid foundation not only for their business, but with a trusted outsourcing partner. These factors include:

• Ideas
• Innovation
• Uniqueness, especially in terms of IP
• Optimization. What can you do better than your competitors?
• Accessing and attaching your company to the cutting-edge of new platforms
• The ability to create a fantastic prototype for potential investors
• The flexibility, human capital and financial capital to improve and refine your product/service as you begin to accrue investors
• Confidence in your selected outsourcing partner, especially when it comes to IP. The "secret sauce" to your product or service is of utmost importance to you — so when you’re researching outsourcing partners, make sure you understand to what lengths they’ll go to protect your IP rights — i.e. NDAs, contracts, etc. Also, it’s a good idea to call a prospective partner’s references and discuss this subject with them.

As to the outsourcing process itself, an iterative development process more often than not offers the most flexibility and the best opportunity for idea-sharing for innovative projects whose requirements are either undefined or likely to change during development. The "remote outsourcing partner" model thrives in this milieu, as it allows for regular communication, consistent focus on best practices, short iterations, repeated reviews and rapid-fire deliveries. Moreover, each member of your outsourcing partner team becomes fully immersed in your project, understands the importance of customer relations, and is as excited about your insights, ideas and potential for success as you are. As a startup, you’re optimistic about what the future holds. Your outsourcing partner should share this optimism with you, creating a symbiotic relationship that boosts everybody’s game to another level.

If you’re starting a new platform or software business, the above insights will go a long way towards helping you identify an experienced, flexible outsourcing partner.

Frequently Asked Questions

Why do startups outsource software development?

Outsourcing lets a startup go from idea to working product without first setting up a development office or hiring a full in-house team. The approach works best when the partner communicates consistently, protects your intellectual property, and can adapt as requirements and funding change. Since 1998, Sibers has delivered more than 1,700 software projects, many of them for early-stage startups, and continues to support products after launch.

What should a startup look for in a software development outsourcing partner?

Look for consistent communication, flexibility when requirements change, and clear IP protection — and check references. Ask how day-to-day collaboration works. At Sibers, projects are divided into phases, developers and project managers discuss progress and obstacles every day, and day-to-day cost tracking shows what the team is working on and what it costs.

How can a startup protect its intellectual property when outsourcing development?

Settle IP before development begins and get it in writing: the contract should state that intellectual property rights transfer to you, the team should sign NDAs, and you can ask the provider’s existing clients how IP was handled in practice. At Sibers, the dedicated project team signs a non-disclosure agreement, contracts clearly state the transfer of IPR to the client, and all deliverables are treated as work for hire.

What development approach works well when startup requirements are likely to change?

Iterative development. Short cycles, regular reviews, and incremental deliveries let the startup and the team adjust the product as feedback and priorities emerge, instead of fixing every requirement upfront.

Can an outsourced team continue working on a product after its first release?

Absolutely yes. Outsourcing does not have to end with a prototype or first release: the same team can keep refining and expanding the product as users arrive and feedback comes in. One example is a mobile video editor that Sibers has developed since 2013, expanded to additional platforms after launch, and still maintains.