App development - who should code my product?

01.10.2020 | Written by Ole Peterson

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Not all people who can code have great product ideas and not all people who can code have great product ideas. You probably belong to the second type and are now wondering how to find an affordable and trustworthy partner who can make your product idea a reality. Because developing a working app or web application that is user-friendly and scalable requires real experts. Teaching yourself how to program will not be possible in the foreseeable future.

In-House Developer vs. Freelancer vs. Agency vs. Tech-Partnership ?!?

This much can be said: There are some options for not having to do the development yourself. Each has its advantages and disadvantages and after reading this article, you should understand them.

Co-Founder/In-House Developer

A technical co-founder or developer is one way to go into product development and beyond with an expert at your side. So you are looking for someone who wants to work with you on a long-term basis and to whom you will give a salary and the corresponding company shares. In the case of a co-founder the shares are up to 50%, but also hired developers often get a few percent.

The advantage of co-founders and employees is that they can work with you on a long-term basis, beyond the MVP and product development, to drive the startup forward. You can become a well-coordinated team and the development is completely internal. This is especially advantageous in the hardware sector and it is generally appreciated by investors when the intellectual assets of the company are developed and remain in-house.

A good developer or co-founder must be able to build the connection between the technical and the economic field. He must be able to make you understand which technical applications have an impact on the economic side and how, and be able to assess whether this in turn makes sense or not. For this, some experience in founding and developing similar applications is an enormous advantage.

However, it is already apparent that such a person is not easy to find. To acquire a good developer or co-founder is often a stroke of luck. Often startups fail due to co-founders who do not have all the necessary skills. For example, many products are not finished because a technical co-founder without an economic background is perfectionist and gets lost in over-engineering. Retaining a co-founder or good developer is also a challenge; on the one hand, running costs are incurred, as both will be dependent on salary. Pure work-for-equity models rarely work for more than a month or two, as all parties involved have to cover living costs. In addition, the shares will accrue to the co-founder and it will also take time until all processes can be approached effectively as a team. We also often had to see that competent co-founders were poached by large companies for high salaries and the other founders were left without a developer and CTO.

Summary: Technical Co-Founder/Hired Developer

Pro:

  • Has self-interest in long-term success
  • Is at your side as an expert for the entire development of the startup
  • Conservative investors in particular appreciate it when you build up intellectual property with your own team

Contra:

  • Many MVPs/products, where the technical part is brought in as co-founder, are never finished
  • Rarely has all necessary skills, e.g. experience in founding and/or developing similar apps, as well as server administration, databases and security
  • Co-founders also have to cover their running costs and are therefore difficult to keep without a decent salary
  • Needs to be familiarized with your startup until a productive teamwork is established

Finding the right developer

To find the right technical co-founder or developer for your startup, look for someone who:

  • has already built something similar
  • knows what it is like in a start-up, ideally some experience in founding a company!
  • is not a software architect: you need a doer, not a planner!
  • is not too perfectionist; you need 80% solutions. Someone from a corporate environment is usually less suitable and usually just expensive
  • can easily present technical topics and point you to business applications

Freelancer

Freelancers are experts who work independently and often provide their expertise to many customers. Many freelancers are quite specifically specialized and often have experience in programming entire applications.

There are many freelancers - many also at relatively low prices. In any case they are cheaper than agencies. Good freelancers can develop a highly professional application; they are up to date and have an idea of what works well. So at best you don’t have to worry about anything .

Beyond developing the application, you have no obligations to freelancers, as would be the case with employed developers or co-founders. Furthermore, after payment, there is no further administrative work required for them. This makes the use of freelancers a very flexible one, which also does not generate any running costs.

Unfortunately it is difficult to distinguish the really good freelancers from the less good or even scammers. It can work very well, but unfortunately also very badly. So it is quite good if you already have a recommendation or can fall back on other experiences when making your choice and do not have to leave the success of the product development to chance.

Because freelancers are not involved in your start-up as self-employed and have no interest in your business success beyond their commitment. If their application does not exactly fit your idea, it is - simply put - no longer their problem as long as they have implemented your instructions.

In addition, programs built by freelance developers only need to be understood by them during the development process. This makes freelancers' applications often difficult to read and it costs a lot of time to have the code maintained or developed by others later.

A final drawback is that many freelancers often have little experience with server administration - they are just good at their job, but as a startup you usually need a bunch of other skills; but this becomes very important when it comes to data protection and collaborating on a code base.

Summary: Freelancer

Pro:

  • Mostly has experience in developing complete applications
  • Less administrative and accounting work than with an employee
  • Development can be completely outsourced at sometimes relatively low prices

Contra:

  • Has no self-interest in the success of the company
  • Often on the road as a “lone ranger” - Teamwork and code quality are not always the main focus
  • The result can be very unsatisfactory
  • Freelancers rarely have as much experience with server setup, maintenance, uptime monitoring etc. as a system administrator

Finding the right freelancer

To find the right freelancer for your startup, look for someone who:

  • can show references for similar apps (no corporate gigs!)
  • works regularly in teams
  • for which Continuous Deployment is not a new word, but a standard
  • ideally already approved by other founders
  • understands server administration, or outsource it to someone who understands

Agency

Agencies are similar to freelancers in their basic principle: They are specialists who build your application for a certain amount of money and you just have to wait for the finished result. Agencies are usually more expensive than freelancers, but they usually also deliver a complete product development package and work as a team, which has certain advantages.

What the agencies have in common with freelancers, but also with co-founders and employees, is that they already have access to a well-coordinated team of experts who, as a group, already have a lot of experience in development. This guarantees you a certain standard of quality and readability of the code, because already in the agency different people are working on the code and automatically a mutual control takes place.

Working in a team also improves communication - there is usually a project manager who keeps an eye on everything and can report back at any time. In addition, there will always be someone to talk to in agencies, even if someone is ill or on vacation. If this is the case with a freelancer, co-founder or employee, you can’t fall back on them for this period.

The price range as well as the quality range are big with different agencies. With very low prices, caution should be exercised and you should ask yourself if the service you are looking for can be provided at this price.

As with freelancers, it is important to note that agencies are not associated with your startup beyond the assignment - their responsibility end with the respective assignment, which can be a disadvantage if the results are not satisfactory. Furthermore, agencies, as well as freelancers, do not necessarily have the incentive to take the fastest and cheapest route, as they themselves tend to have the incentive to estimate as many hours as possible and thus generate more turnover for themselves.

Summary: Agency

Pro:

  • Usually offers a complete package
  • Usually has an experienced team of experts:
    • Better communication through a project manager
    • Dedicated server administrator provides security and continuous deployment etc.
    • Dedicated frontend/backend developers may be more effective for certain tasks
  • Due to a whole team, there is always someone available to help even during vacations or in case of illness

Contra:

  • May be comparatively more expensive
  • Has no self-interest in the success of the company
  • Most agencies are specialized in enterprise products
  • Supposedly “cheap” agencies often only implement your input without questioning it. Sooner or later conflicts arise and the app cannot be published at all

Finding the right agency

To find the right agency for your startup, look for a partner that:

  • provides a complete team, not just a single developer
  • has experience with similar apps
  • specialized in small apps and startups
  • ideally makes a fixed price offer
  • fully understands and questions not only your idea but also your business model
  • can take over the long-term maintenance
  • gives you the rights to your product
  • Bonus point: Agencies like VIPERdev not only bring developers with them, but also regular sessions with serial founders, who can quickly save you many months of time when entering the market.

Tech-Partnership

Tech-Partnerships are a kind of mixture of all previous alternatives, which fortunately manage to combine the advantages of co-founders, employees, freelancers and agencies. The tech-partners are professional teams and join your startup as CTO: They get a fixed price for their development work and also some company shares.

This mix means that you pay less than for freelancers or agencies, give away fewer shares than to a co-founder and generate neither a lot of administrative work nor running costs. This leads to a compromise that offers you both moderate costs and a partner that is intrinsically motivated by shares.

As Tech-Partners return to companies again and again, they not only bring the technical expertise, but can also play a constructive role in the growth process if required. This can save founders many mistakes and valuable time until market entry. With a Tech-Partner who brings along a suitable strategy, you can easily be on the market six months earlier - that can make all the difference.

Tech-Partners have a team of experienced founders that you can call upon to communicate processes well and achieve results efficiently. This combines the great advantage of agencies with a smaller price and the most efficient way of product development.

The accumulated founding experience of Tech-Partners can hardly be provided by a co-founder or developer; as well as no single person can have such a well-distributed expertise as an experienced team of developers.

Tech-Partnerships are a new path that more and more start-ups want to take in order to realize their product development while having an experienced long-term partner. To meet this demand we at VIPERdev have founded the Tech-Partner Next Day Ventures. Next Day Ventures is a pioneer in this field; it regularly participates in startups to develop their product and support their growth.

Overview: Tech-Partner

Pro:

  • All the advantages of a good agency specialized in startups
  • Offers a cost mix of moderate one-time payment and shares
  • Brings not only technological knowledge, but also entrepreneurial experience
  • Is specialized in startups, often founds several startups per year

Contra:

  • Difficult to find, because still very rare concept
  • Not every startup is accepted, because it is a kind of investment
  • Only useful if you need and want to accept help on both topics
  • Financially a worse “money for equity deal” than an investor

Tips for a successful cooperation with Tech-Partners

If you have found a tech partner:

  • Communicate clearly your product idea and present your business plan in detail
  • Take advice
  • If parts of your plan would lead to technical difficulties or high costs, accept counter-proposals
  • Be open for advice on market entry and first sales; this is where a good tech partner really pays off
  • Bonus-Tip: Get in touch with possible Tech-Partners early and talk to them about the existing possibilities. You can book a free consultation appointment here and discuss the possibilities of a Tech-Partnership with Next Day Ventures.

Overview of outsourcing options

This table illustrates the effort and benefits that the different partners bring to you as a founder. At the end of the day, all start-ups, founders and product ideas are individual individual cases, but experience shows trends which this table illustrates.

Co-founder/ Developer Freelancer Agency Tech-Partner
Costs, short term € / €€€ €€ €€€
Costs, running €€
Company shares Yes No No Yes
Business model development ** * *** (If specialized) *****
Probability of success 30% 50% 90% (If specialized) 90%
Server Management * ** ***** *****

Whatever you decide to do, make sure that your partner, in case of an agency or a freelancer, is specialized in startups and that the co-founder or hired developers already have experience with startups. This makes the cooperation much easier and it saves time and money if you can start effectively faster. The classic “enterprise product development” is out of place here.

The most important learnings for the development of your app:

  • The most important thing is that your partner is specialized in startups and has experience in founding companies!
  • All partners with shares are interested in long-term success
  • All partners with a team usually communicate better and bring more expertise
  • Only Tech-Partners offer you a cost mix of one-time payment and shares of the startup
  • A good Tech-Partner can help you to advance on a technical and economical level.
  • Freelancers and agencies often only do what you tell them to do. They don’t necessarily give advice on whether your instructions make sense.
  • Freelancers unfortunately often can’t meet expectations and develop products that are difficult to develop further.
  • Co-Founders require close cooperation - it is difficult to find a suitable Co-Founder and in case of failure it costs a lot

If you still have questions about which partner is the best for your special project, you can here arrange a free consultation appointment.

We at VIPERdev have helped many start-ups with the development of apps and web applications - whether as MVP or as a complete product. Due to the experience we have gained on our own and our customers' paths, more and more customers wanted us to be part of their startup as a consulting partner on both topics. It was in response to this need that we founded Next Day Ventures: A Tech-Partner, who helps startups with the development of digital products and also supports the growth process with words and deeds. If you would like to know more about what we can do for your startup and if we are the right partner for you, you can send us a non-binding inquiry via our contact form.

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