Choosing a developer: Freelancer, agency, or in-house team?

Having worked with startups for years, one of the questions we often get asked is “what’s the most feasible way to choose a developer for startups, especially tech ones?”. For tech startups, development is usually the highest cost. Thus, making important business decision, such as hire a freelancer, or workwith an agency, or build an in-house team, is important to ensure the consistent and stable growth of your newly established business. In this article, we will look at pros and cons of hiring a freelancer, an agency, or making your own in-house team. 

Wht is a Freelancer?

Freelancer is usually a single developer, often working on multiple projects, probably from multiple companies as well. They may invoice hourly with a flexible schedule and no set hours, or may work on your project full-time for a set period.

Pros:

• Can be the most cost-effective option for smaller engagements, or projects with irregular hours
• Can build a great personal relationship, and be very responsive to your needs
• Can bring more flexibility to the project and to the working engagement

Cons:

• Finding a great freelancer can be difficult, most important is good communication and how responsive they are
• Managing a freelancer may be difficult and frustrating if they are not self-directed and they need a lot of handholding
• They may become unavailable or disappear at any time

Advice: Finding the right freelancer is key. Most important are communication and trust. Look for someone who has relevant experience, but also look for someone that you can talk to easily on a personal level. Look for honesty – they should show confidence that they can do the work, but they should also be open and forthcoming about their limitations. Some companies prefer developers who are high rated on freelancer sites but do read the negative feedbacks as well. These feedbacks will help you understand the freelancers before jumping on any projects with them.

How about an Agency?

An agency can bring a team with multiple people and skills to a project: developers, designers, testers, even project managers. Agencies can assemble a team that fits the project’s needs, and will usually apply their own battle-tested process to the project.

Pros:

• Can be a good way to assemble a team with multiple skills on short notice
• Should have a proven process and experience from past projects – can hit the ground running
• Flexibility to add or remove resources to the project based on changing demand

Cons:

• Can be higher cost in the long run
• Every agency’s process is different – important to match what the project needs (for example: lean, agile process that focuses on speed and flexibility, vs. rigorous, careful process that favors detailed requirements and stakeholder buy-in).
• Need to align incentives – making sure the product succeeds, vs. just billing and closing the project

Advice: Agency should show interest in the long-term vision of the project, not just closing the deal. Discuss the process, and make sure their process fits your needs. You should look for and negotiate with multiple agencies at once to find the one fitting your project most. Do not hesitate to raise your concerns when discussing with them so that you can choose the best agency for your projects – once the deal is closed, it will be expensive to find another agency to work with.

Finally, how about an In-house team?

An in-house team involves recruiting and hiring developers as full-time employees of your company, as well as a role to manage them, such as a CTO, VP of engineering, or engineering manager.

Pros:

• Usually the best option long-term if the technology is a key part of your company, and the roadmap is certain for the next few years.  The technology and the tech team can become your company’s strongest asset.
• You have the most control over your team, and how it works.
• Easiest to align incentives and making sure everyone’s working towards the same goal.

Cons:

• Recruitment is difficult and time consuming – both initial recruitment and for staff turnover
• Even after hiring developers and a technical manager, building a functional team and process takes time
• Less flexibility to ramp the team up or down, or if the necessary technical skills change

Advice: A strong technical founder/ co-founder is usually necessary to make this option work.

In conclusion, making the right choice is the utmost important thing to do. Do not hesitate to combine all these options should you need to, sometimes the right decision is the combination of all three. Do not rush! Take your time to make your decision. As we previously stated, this is the key to your growth! Let us know if we could be of any further help, we’re here to help you succeed!