Whether you’re a technical founder or not, there’s one piece of advice you’ve probably heard over and over again: never outsource anything that touches your core product!
It’s not a bad tip. Taking the time — and making the investment — to develop an in-house team has serious advantages. It can mitigate risk, and it also keeps you from creating long-term external dependencies that can become a drag on your efficiency, productivity, and profitability.
But it isn’t the only path forward. When you take a careful and strategic approach to outsourcing product development, you can reap immediate benefits that simply don’t exist — or take much longer to leverage — when you’re building an in-house team. What’s more, the two paths aren’t mutually exclusive. Outsourcing can happen alongside, and even contribute to your company’s internal development.
So when does it make sense to augment your in-house team with a specialized development team?
When You’re Stuck in a Rut
Generally, outsourcing is valuable only if it moves you to a higher capability, faster. Technology platforms tend to hit a ceiling either because of scaling limitations or because the platform itself is outdated. In both cases, you need to remove the technical debt and make a “step-jump” to get the platform to the next level. No matter how skilled your internal team is, that typically requires collaborating with another team that’s been through these cycles before.
When You Need Instant Access to Specialized Talent
The fastest way to bring in domain expertise is to contract with teams that already have the experience you need, while you continue to focus on your core competency. Of course, you can hire talent quickly, but it takes time to develop the capability of a team and to ensure the dynamics are working.
Outcomes are tied directly to culture, chemistry, and the practical day-to-day of working in the trenches together. That simply doesn’t happen overnight.
When You’re Looking to Learn
Ideally, the team you select will be transparent enough to provide all that’s needed to succeed post-engagement, so there’s no dependency after the fact. Along those lines, outsourcing with the right group can give your team the space and resources they need to learn about, experiment with, and integrate new best practices; it’s similar to contracting with (and learning from) a corporate attorney before you ever hire in-house counsel.
Beyond new tools, techniques, and processes, working with a team can also help you understand the kind of talent and roles to seek out as you scale your own development team.
Ultimately, the decision to outsource comes down to context. Which means the question isn’t “to outsource or not to outsource?” Instead, start by asking: where are we in our product development cycle, and what outcomes are we seeking?