Freelancer vs Starting an agency vs Development Company? Which one should I go with?

Want to know whether you should hire a freelance software developer, in-house development team or a software development company? Or maybe you’re having a hard time deciding which option to go with? Let’s find out together. Shall we? Hello everyone, this is Adrian from Upstack Studio.Today, in this video, we’re going to explore together the pros and cons of hiring freelance software developer, in-house development team and software development agency. Bear in mind that none of these 3 options is better or worse than the other – each of these is solid and relevant for particular projects in different circumstances. So, depending on your current situation, you will have to choose the right kind of team to go with. We’ll be sharing some of the important aspects that you should consider before making a wise decision. Before we dive right in, we would like to take this opportunity to thank you for watching this video. If you’re a startup founder, CEO, or even a product manager and you would like to understand more about web and mobile app development, feel free to check out the other videos in our channel and while you’re here , don’t hesitate to subscribe and hit the bell icon to get notified whenever we launch a new video. Hiring a full time in-house development team that typically devotes 40 working hours a week for your project can be really tempting because you will have a team that works with you for the whole project timeline. And usually, as an employer, you will be paying your team a monthly salary as well as providing them an office space to work in or co-working space allowance if you build a fully remote team, work machines, taxes, insurance, vacations and various other benefits. Here are 2 key advantages of hiring an in-house development team. Teamwork. As quoted by John Maxwell, teamwork makes the dream work. When you hire in house developers, you’re building a team that works towards a common vision. They become a valuable member of your team, learn the ins and outs of your business, be a part of your company culture and promote your brand. You can achieve a lot with an in house development team. Second, Flexibility. With an in-house team, you can build a team of developers that adapt according to your direction and problem solve. If there’s a need to switch to new technologies, tools and frameworks, having full-time developers will make this learning process a team and collaborative effort. You’re not restricted with certain technologies and can make changes according to business needs. However, there are some downsides to hiring an in-house development team too. First of all, if you’re not a technical person or do not have a CTO, then you might not know how to build the right team of developers that suits your business needs. We often hear from non-technical founders asking for advice on how they should start hiring an in-house development team. They have no idea how each of the parts and pieces in software development actually ties together, hence not sure where they can find developers or how they can hire the right ones. Our advice is definitely to make sure you have a trusted technical person on your founding team before hiring an in house development team. Another downside to hiring an in-house development team would be the long term overhead cost. Once you’ve hired someone full time, you’ll need to take care of the monthly overhead cost and other costs like allowance, paid leaves, health insurance, working equipment, office rent and many more. Not only that, you’ll have to also invest in team activities, company lunch or dinner to cultivate a good team culture. There are a lot more aspects that you will have to consider other than just hiring the right person. That, is just the first step. The next downside is you don’t only need to deal with hiring, but firing as well. Hiring a full time team might sound really exciting in the beginning but as you start managing the team, you will definitely make the mistake of not hiring the right person into the team. I can almost guarantee that you will make this mistake unless you’re super good at hiring and managing a team from the get-go. So do keep in mind that when things aren’t working out, you’ll have to fire someone from the team and trust me, it is really really hard, especially if you’re a kind and loving boss. Next up, let’s talk about hiring freelancers. There are multiple different types of freelancers. Some are full time freelance software developers and some are part time freelancers. Typically, freelancers are hired for a particular project and their job is to work on the deliverables and get paid. The pros of hiring a freelancer? More cost effective. I’m not saying all freelancers charge lower fee, there are some that charges high fees too. But generally, freelance developers charge lower than software agencies. And because they get paid depending on the work they deliver, you might not need to provide office space, cover health insurance or taxes like you do for full time in-house developers. Depending on the type of skill sets you’re looking for, freelancers might be easily available. There are many platforms out there that helps you find and hire freelancers like Upwork and Toptal. You can find really good freelancers whom are more than happy to work under a contract and all you have to do is to pay for the job done. Not forgetting that you will also have fewer obligations as compared to hiring an in-house team where you’ll need to provide work benefits and comply to all the rules and regulations. How about the downsides you might be asking? First, reliability issue. We’ve heard multiple different stories that have a common theme. Freelancers ghosting on them and disappeared before the project starts. Or even worse, worked on the project half way, got paid some money, then started playing hide and seek with their client. Some just keeps dragging the progress and never delivered the work. Second, attitude. Not every freelance developer will care about product quality as much as you do. Unlike software companies who care about their reputation, they might just want to complete their job and get paid. While some of them may do an excellent job developing the product, not all has the skills necessary for planning and organizing work process, which could lead to messy work flows and broken deadlines. Have you faced these issues before? Comment “Ghost” below this video and share with us your experience. We would love to hear some of your stories too! Let’s talk about hiring a software development company. Usually companies like these will have already have a team of experts, be it web and mobile app developers, UI/UX designers or project managers to make sure they are able to provide a full cycle product development service. Depending on the agencies you’re engaging with, they typically work with agile software development with a time and material payment option or fixed price projects. With the right software agency, you can expect to get a full cycle product development service. Meaning the agency will handle everything from project management, UI UX design to testing and deployment. Their team of experts will work together with you to achieve your business goals and build the right solution for your customers. Instead of figuring out each part of the software development process yourselves which might take you a long time, hiring an agency might just save you a ton of time that you can then invest into running the business. Next, process. A good software development company will already have their process defined and ready to go. Unlike hiring and managing developers yourselves, the workflow is established and you can work closely with them to plan and execute. Depending on the company that you engage with, usually they will have worked on different projects with an extensive portfolio. So you don’t need to worry about training the right person with the right skills when you’re hiring because the company will handle these internally. Last but not least, Accountability. Most software companies care about results in the same way as you do. Reason being, they care about their reputation. When you’re successful, they will be successful too. Not to forget, Companies usually prefer long-term trustworthy relationships with clients. The disadvantages of hiring a software development company? Number 1, cost. It is inevitable that you will need to invest more for quality services. Companies usually hires a team of experts whom you will be working with and these talents are contributing to their overhead cost. Another downside with hiring a software agency would be choices. There are a huge number of software agencies out there that provide similar services. So you might need to be careful when it comes to hiring the right development company for your project. There might be some bad apples in the industry as well that you will need to avoid. We have another video that shares some of the biggest mistakes we’ve seen people make when hiring an app developer so feel free to check that out if you’re interested. Let’s sum up what’ve discussed so far. In general, freelancers are the cheapest and good for short-term tasks. Hiring full-time developers might cost you a lot of time, effort, and money with all the legal obligations. While working with development agencies is pricey but saves you a lot of time and effort, and ensures the highest quality end-product. Which option do you think is the best for your project? Our advice is to kickstart the project with an expert software agency to reduce time to market with a quality product. Then hire an in-house development team to handle maintenance and feature improvements. If you need extra hands, consider hiring good freelancers to help with short term projects. Hope this helps and if you know anyone who needs this information, feel free to share this video with them and let’s build better products together. That’s it for this video and I’ll see you again in the next video. Have a great one.

Stephen Childs

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