When Startups Should Hire a Dev Shop (other than "never")

It misses a key decision factor: Is the technology going to be a competitive differentiator for your company.

If so then having it in-house is much more important because your business strategy is going to be closely tied to your development work as the company evolves.

However if you primarily compete on other factors (i.e. content, sales ability, marketing, etc.) then outsourcing the dev work and focusing on your core competency makes a lot more sense.

I just hired a "dev shop" to build a prototype for my brother and I, despite being able to do it myself. I elected to this because:

* It's pretty straightforward, I'm probably overqualified to build it. * I'm better off keeping a full time job and paying for someone else's time. Both monetarily and for networking reasons. * Since I do know enough to build it, I can take it and run with it if/when it becomes a good idea.

Depending on your perspective, you may not consider this a "startup". Until we have a prototype, I don't see how it could be. The potential for it is huge though. :)

The article doesn't really discuss the upside of hiring a development team for a startup. It mostly focuses on if I don't know how to code or manage people you should. But if you don't know how to manage you probably won't get good results out of a dev shop.

I can think of another very good reason to hire a dev shop: you already have a developer or two, but want to try out a feature that's well outside of their areas of expertise. For example, your core application is a Rails-based website, but you want to try offering an iPhone app. Note that if that feature is successful, you will probably need to train your developers in that technology or hire someone, and rewrite it from scratch.

I think the comment from Michael Schubert from Pivotal is spot on (http://bhargreaves.com/2010/03/hire-dev-shop-other-never/#co...).

When you're not sure about what you exactly want and need to quickly iterate on your idea, a good Agile Dev Shop is great. It allows you to limit your risks and not hire people you won't need...

I think salesforce.com was built this way. Benioff hired 3 guys and left them alone in an office for a year.