Software businesses face a difficult decision when developing their products: should they build the product in-house or outsource the software build to an offshore firm? This is my take on that decision. Feel free to add comments, I know many will disagree with my conclusion.
In-house software development:
Pros:
More control over the development process and product quality
Easier to collaborate with the development team and communicate vision
Better alignment of the product with the company culture and values
Cons:
Higher costs, including salaries, benefits, and office space
Can be challenging to find and hire qualified developers
Time-consuming to build and train an in-house team
Outsourcing software development:
Pros:
Lower costs
Access to a broader pool of talent
Faster time to market
Cons:
Less control over the development process and product quality
Communication and collaboration challenges
Intellectual property concerns
Which approach is more successful in my experience?
There is no one-size-fits-all answer to this question. The best approach for your business will depend on several factors, including your budget, timeline, and specific needs.
As an angel investor, I rarely invest in a software business that doesn’t do the core development in-house, using its own team. But then I would have missed out on businesses like Upwork and Fiverr, who I believe outsource their development.
However, in-house development is generally considered the more successful approach for long-term projects and products that require close collaboration with the development team. Outsourcing is a good option for short-term projects or for products requiring specialised skills that are not available in-house, but it’s not my go-to approach.
