Technically proficient offshore software development teams are a great fit for most early and later-stage tech companies. Before we talk about who they are a no-brainer for, let’s cover the cases when founders should think twice.

Ventures that aren’t a great fit for offshore teams

If you don’t know what to build

Probably obvious, but any kind of software development company needs clarity on what they are going to build for you. You wouldn’t have a contractor build a house for you without blueprints, right?

I sometimes talk to founders who think they know what they need to build, but they really only have a rough idea. This is especially true for non-technical founders, of course.

If you aren’t clear on exactly what you need to build to address a market opportunity, you probably need to hold off engaging technical folks. If you do take that step, it is going to go better if you can work quite closely with your team–in the same room, ideally.

If what you are building is very simple

If your software doesn’t need multiple roles/user types, won’t have many concurrent users in the first year, and can be cobbled together in a few weeks with part-time effort, then you might be better off trying to build it yourself.

Use no-code/low code or get a local person to sit with and build it on evenings and weekends. You can use offshore teams later to build out a more complete and scalable product.  

If money just isn’t a constraint

The Silicon Valley ideal continues to be developers working together in the same room for as large a percentage of the time as possible. If you have raised tens of millions of dollars in capital, the added benefit of being co-located could pay off.

Even so, there are almost always parts of the product that can be chunked off and given to offshore teams at an 80% discount on per-hour costs–or much more if you are in an expensive market.

Who should build with offshore teams

If one or more of these conditions apply to you, you should give startup-grade offshore teams a second look.

If you want to make your capital go further

It turns out that the +80%-off sale on software development costs (compared to domestic rates) is pretty attractive, especially if you are bootstrapping or at the angel or seed stage. Even if you have significant resources, offshore teams can be a huge unlock for you.

The reality is that even as clear as you are on what you want to build, in many cases (probably most cases), you’ll have to significantly re-tool your application more than once to achieve product-market fit (PMF).

If you build offshore, you keep your powder dry to be able to pull off significant changes without breaking the bank.

If your application can be broken into components

The most obvious way to leverage offshore talent is to “chunk off” parts of the build so that if you have internal devs, they can build the core tech, and you can accelerate development on the necessary additional parts. Examples are many but include:

  • Webapp wrappers of other tech: If your core tech/AI backend is where your team is focused, you’ll need a different set of skills to build the interfaces that users or APIs use to access your value.
  • Third-party integrations: If you need to build an API to Zapier or SSO service, an offshore team is an excellent choice.
  • Internal tools and admin layers: If you already have great user-facing software, you may not want to distract your core team with necessary customer service or account admin-level interfaces.
  • A native app: If you need to offer your software for iOS or Android clients.
  • Info-sec or other “Enterprise-ready” features: If you want to sell to enterprises, you’ll need to add a bunch of features that will help you pass procurement hurdles.

If no one on the founding team has hired and managed devs before

Non-technical founders and teams can absolutely create great companies. But they should definitely consider using a software dev vendor instead of trying to hire developers themselves. Dev companies take on the people risk of hiring and replacing people when they decide to leave.

The best firms also provide access to very senior technical people who can de-risk their product build. These firms also provide other specialized skills non-tech founders often lack, like program management, product management, and system/feature analysis. It’s a one-stop shop.

If you’re tired of tech recruiting

On startup twitter, influencers are constantly shouting about how founders should spend a huge percentage of their time recruiting. It’s good advice in many cases. But, given the never-ending sales death-march to get customers and investors (and everything else), having to also focus on recruiting has a high opportunity cost.

If you are reaching product market fit in the traditional Y Combinator playbook, it may seem like dangerous heresy, but working with a one-stop software vendor you trust just simplifies your life in many ways.

If the input costs are right and the outputs are good, it is a great way for you to free up time to go get more revenue and more investment.