Scaling startups becomes easier if it involves outsourcing development. Learn more in this post!

Is your startup always looking to create innovative and powerful products? Then, you know that it is necessary to rely on developers capable of delivering quality and operating the most advanced technology. Also, you probably know that it is not always easy to find these professionals, especially if your business needs to meet specific deadlines to satisfy investors.

Startup scaling is a process that demands intelligent decisions and a lot of strategic planning. If a CEO cannot organize a group of skilled talents working under the same mindset, the project will face serious problems. However, this is not such an easy task, much because of the tech market's current situation.

Looking for a solution, many startups are deciding to outsource their development teams, seeking cost-effective, quality IT professionals. Is this a good alternative? Why? Keep reading and learn more!

What is the current state of startups in the USA?

Before we go deeper on startups scaling, it is important to understand why this business model has become so popular in the last few years and what are the main challenges faced by managers when trying to augment their staff.

It is fair to say that the United States is the best place to be if you run a technology startup. The American tech market is currently the largest in the world, accounting for 33% of the global sector and moving around 1.6 trillion dollars per year. Naturally, however, not all startups succeed. Actually, 10% of them fail within the first year.

Many cases of startups going under are related to problems managing cash flow and establishing a sustainable budget. As the tech-based wage grows at a faster pace than average, it is not surprising to find out that one of the most expensive costs a tech business has to deal with is the payroll.

This is one of the reasons that makes the staff augmentation process so challenging. Besides money, it consumes time. According to Entrepreneur, owners and CEOs may spend around 40% of their working hours looking for new talents and managing labor-related issues. In most cases, it takes about 6 months to hire a new professional.

The only problem is that not all businesses can wait this long. Development projects are usually characterized by strict deadlines, and not meeting them will severely compromise the results. On the other hand, of course, it is crucial to take the recruitment period seriously, since hiring an unskilled professional will cause more harm than waiting for the perfect fit.

Luckily, there are alternatives to the traditional hiring method, as we will present in this text. Before that, let's take a look at how startups are currently operating.

How do startups operate in this context?

Usually managed by one or a few entrepreneurs, startups operate almost like as any other company. Apart from the size, the only difference is that, in this business model, the objective is to always come up with new ideas to solve existing problems. After a lot of research and a few series of investments, these ideas become products or services.

As you know, we are talking about an always-changing market. New demands emerge every day and urge CEOs to act as quickly as possible to meet them. To do so, especially when working on a tight budget, flexibility is key. Successful startups are those ready to scale up their team quickly and effectively.

Now, you may be questioning yourself: how to achieve a degree of business flexibility that will allow for effective startup scaling? As you have seen in the previous topic, the US talent pool is not so accessible, mostly because of high costs and lack of available professionals.

Overcoming that requires a different approach.

Why is outsourcing development a good alternative for startup scaling?

Outsourcing is the practice of bringing professionals that your company does not directly employ to your teams. They may work remotely or on-site, as long as they can perform the tasks needed to deliver your products. This arrangement exists in three different modalities: onshore, offshore, and nearshore. We will focus on the last two.

As you can presume from looking at those terms, the idea is to find professionals outside of the US. Clearly, this is a way to dribble the shortage of talents by gaining access to much broader bases of professionals. Besides, paying foreign developers usually involves fewer expenses, especially when working in countries where the dollar value is high.

That does not mean, in any way, sacrificing quality in exchange for saving money. In fact, many nearby countries, such as those located in LATAM (which fits in the nearshore model), are home to a multitude of experienced IT experts that work not only in software development but also in design and engineering. The only thing you have to do is find out how to reach and recruit them.

This is why many startups seek outsourcing companies to act as intermediaries. Relying on a partner with the know-how to select and manage these professionals generates a substantial competitive advantage for any startup.

Besides, it provides the flexibility needed to scale up your team according to your project's demands. If the need to increase or reduce a team emerges, there will be almost zero bureaucracy to worry about. The strategy allows for quick adaptation to any scenario.

Speaking of quickness, another benefit of outsourcing is related to time management. As we mentioned, the whole process of selecting, recruiting, and onboarding new team members consume valuable time. If you delegate it to a third party, you will have plenty of time to focus on tasks that really need your attention.

Most startups look for ways to scale up their teams. As the US tech market is currently facing a talent shortage, leading to time-consuming and expensive recruitment processes, many CEOs invest in outsourcing to fulfill their business needs. This arrangement is the key to thrive in an ever-changing market, as it provides flexibility and connects the company with cost-effective professionals.

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