STARTUP development with an internal IT team or with an external IT team
I decided to write on this topic because we have debated many times so far which is a smarter decision, whether to hire internal engineers to develop the project or to develop the project with an external partner.
I have had both experiences many times, as a co-founder and as an external partner to develop the project from the product and business side.
There can be different views on this topic depending on many factors that influence the final decision (development budget, industry, internal team, etc.).
However, if the co-founders have a clear idea that is validated by the market, and that solves an obvious problem, I think that the co-founders should make their internal team in positions such as marketing, sales, administration, product development, and everyone else operations including IT development, accounting, and other additional activities that can be done by someone else, should be outsourced to other companies that deal with that issue.
Many startups do not know enough to separate those two different engagements, and generally spend a lot of time and energy organizing processes and finding people to hire.
That whole process of finding the people to cover so many differentiated positions and building chemistry between the team delays the time of the realization of the project and increases the costs in the period when the Startup does not generate turnover and the project becomes very expensive to develop. It is usually fatal to the survival of the project.
I think at least 95% of startups can make an MVP within 90 days, and such an MVP may or may not validate a market need.
To make a functional MVP, not a single person has to be employed in the company, and all teams can be rented for the needs of that project.
Through my experience, startups that have a budget for a few people per month should not hire more than one engineer until they have a budget for a team of at least 5 engineers.
I think this because a team of 5 engineers is not built overnight and that takes time.
I think that in any structure of the IT team in any startup and already in an established company that needs the engagement of engineers, a minimum of 30% of the engineers need to be external engineers.
Why?
No matter how big the team is, 5, 10, or 20 people, it gets overwhelmed at a certain time, and when you hire external engineers, they certainly have additional monitoring from their parent company, and from on the other side, you can always compare the results between internal and external engineers.
Another reason is that if one of the internal engineers wants to leave the job, you have an alternative and you are not left in the dark.
Also, an important argument is that external engineers in their company may ask for help to solve a situation that is unknown to the internal team, which would lose twice as much time to solve it.
I can list many more reasons why you need to have a hybrid team of IT engineers, but I think these three reasons are enough.
Most of the time one of the co-founders takes on the role of Product Manager of the startup at least in the MVP phase of the product, but further, my absolute advice is to hire either an internal or an external person to lead the Product Development.
Co-founders know to be too “creative” and change the product ad hoc, thereby increasing development costs that can be critical for product development, so it is recommended that the development be systematized and have prioritization.
I mean this for the development phase after the functional MVP, and until then the product must be extremely simple.
