10 Statistics That Prove Outsourcing Development is Beneficial for Startups

It’s common knowledge that the percentage of startups that fail is 90%. While there can be many variables that attribute to a startup’s success or failure, many of the startups who eventually joined the tactful 10% minority benefitted greatly from utilizing outsourced development.

Alibaba, Basecamp, GitHub, Slack, and Skype are just a few of the businesses who can credit outsourcing as a huge aid in their businesses’ development back in the early days.

Today, the globalization of the modern workforce has led to outsourcing becoming more than an asset but a necessary tool that startups should integrate into their business plans if they hope to grow successfully. It’s no wonder why some of the most common pitfalls a startup will face can be sidestepped with the help of outsourced development.

We’ve compiled three of the common pitfalls outsourcing development can help startups overcome with the statistics to prove it.

Running Out of Cash

Overhead costs for in-house employees can run up the bill for fledgling companies. That’s why it’s important to assess which roles need in-house staff to fill them, and which can roles can be outsourced. The majority of the startup community agrees that outsourcing the right jobs can mean the difference between breaking the bank or maintaining the budget.

• 46% of startups that fail do so because they run out of money.
• 27% companies outsource to cut costs.
• Outsourcing can save you 60% on overhead costs.

Outsourcing locally eliminates any spending on overhead costs that an in-house person would require. Those interested in finding the top talent for an excellent price might benefit from outsourcing internationally, rather than locally, to markets that offer competitive rates for professional work.

Losing Focus

Running a successful business means preparing for the unexpected. New variables can pop up at any moment that can either help or hurt your business. Good founders prepare for both by saving focus and energy for the areas where their attention is needed the most.

No startup can handle every area of their business, and those who attempt to, for fear of inviting outside collaborators into the fold, raise their chances of being ill-prepared to handle the unexpected curveballs. That’s why startups must be realistic on the tasks that they needn’t spend valuable time on, and instead, sacrifice some extra cash to hand it off to an outside professional.

• Outsourcing can increase productivity and competitiveness 10- to 100-fold.
• 18% of startup founders noted inexperience or a knowledge gap as a reason for startup failures.

Common areas that startups can outsource are accounting, banking, content editing, advertising, PR, and website construction. These areas are crucial to the growth of any startup, but it’s not advisable that members of the startup spend their valuable time to accomplish them. The time saved by paying for professional execution in these areas will afford any new business more opportunities than saving the extra cash would have.

Failing to Study Your Competitors

First mover’s advantage is everything in the startup community. Every marketplace has competitors building a similar product. Small companies that fail to keep careful tabs on their competitors’ business strategies may sacrifice their chances of obtaining or maintaining the upper hand in their marketplace.

One obvious trend, outsourcing development, is not uniquely helpful to any particular marketplace but rather has infiltrated the grand majority of them. As the remote workforce and gig economy continue to grow in 2017, startups that maintain the mindset that they can build it all themselves may soon expect to find their business at a severe disadvantage to their competitors.

• 53% marketing executives plan to outsource their marketing.
• 78% small businesses believe hiring freelancers give them an advantage over competitors.
• In a survey, 90% businesses cited outsourcing as crucial to their growth.
• 95% of businesses view this new workforce as a key element to developing and running a successful business.

Outsourcing Continues to Grow

Over a decade ago, Deloitte Consulting predicted that outsourcing would become an integral part of businesses’ development plans. As 2017 nears, this prediction has become increasingly real. The top three benefits startups credit with giving them the incentive to outsource are maintaining a budget, faster hiring periods, and access to top global talent.

Going forward, there is little doubt that outsourcing development will continue to permeate the global startup community as the leading, strategic tool that benefits growth.