Why is Outsourcing Product Development Important For Startups

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Why is Outsourcing Product Development Important
For Startups?
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Introduction
Introduction

• The biggest question that tech startups face in
  todays times is whether they should develop the
  product in-house or outsource it to external
  teams. Outsourcing product development to a
  specialist team can really put the startup at a
  huge advantage. One of the other important
  advantages of outsourcing product development is
  cost savings. Outsourcing provides a global
  talent pool and one choose the best fit resources
  for development of the product.
• In case of new products whose market is yet to be
  tested, outsourcing plays an important role in
  mitigating the risks of trying out something new.
  Since the outsourced teams work on flexible
  models the risks are definitely lower.
• Outsourcing the development helps in faster
  development with Agile model and helps in
  tremendously reducing the time to market.
• Outsourcing, is very helpful in case of initial
  days of a startup when its usually going through
  a phase of budget constraints.
• Technology heavy startups must outsource whole or
  a part of their product development to improve
  the efficiency of the development process.
• Here are is a list of successful startups that
  were built with the help of outsourced teams.
• Here are some key steps for your startup to
  effectively outsource product development

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Choose the Right Vendor

• Choosing the right vendor for outsourcing
  application development is a must. An outsourcing
  company with expertise in the required
  development skills, will surely be helpful.
  Picking up freelancers is definitely not
  advisable, as they cannot be relied upon, for
  taking up product ownership.
• One of the important points to consider, while
  selecting a vendor for outsourcing development is
  flexibility of hiring models. This helps the
  startup choose a hiring plan that will optimize
  the costs of outsourcing in accordance with the
  development requirements.
• It is also important to evaluate the portfolio of
  the hiring vendor to understand the level of
  specialization in different business verticals.

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Defining The Scope Of The Project

• The second most important step in outsourcing
  your product development is to define the scope
  of the project. First you need to convert the
  business idea into a business plan and then put
  down what all you need from a successful product.
  Defining the technology with which you wish to
  develop your product is another crucial decision.
  This also helps in defining the skill levels of
  the teams you wish to hire.
• Once the scope of the project is defined and the
  vendor for product development has been chosen,
  the service level agreement with the vendor can
  be created. This helps in ensuring that the
  outsourced teams are working according to the
  plan of action.
• The outsourced teams must be clearly communicated
  about the expectations and the milestones. This
  helps in developing mutually beneficial
  relationship with the outsourcing partner.

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Communication

• Keeping in touch with the outsourcing partner on
  a regular basis and reviewing project work in
  progress on a constant basis is important. This
  is helpful in improving project productivity
  level.
• Motivating remote teams with incentives and
  appreciation is helpful in getting better
  business results.

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