A comprehensive guide for startup founders on hiring offshore development teams.

Feb 19, 2023 |
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For startups, one of the most important considerations is time to market. In the early phases of any business, ideas change and pivot drastically resulting in the need for rapid developmental changes as well. Without pivoting your business idea, you run the risk of launching a product that is not market-ready. On the other hand, without developing new features rapidly, you suffer the risk of losing funding or entering a saturated market.

However, new feature development often means introducing new technical experts into your team. Your existing team may not have the expertise or bandwidth to develop the feature within the time limit. Not hiring a new team member in such a case has a high chance of failure. But searching, selecting and hiring a new resource is extremely time consuming, especially when you are looking for a specialization.

Don’t worry. We do have a solution for you. Hiring an offshore development team can be your answer to all those problems. In fact, Skype, Slack and GitHub – all were developed by offshore development teams. So let’s dive in and learn why you should hire an offshore development team for your startup too.

What are the factors behind a successful startup?

Let’s address this question, that you probably have been thinking about, first. We believe that there are 5 factors essentially contributing to a startup’s chances of survival.

1. Conflict resolution

If your startup is a partnership business, you must be careful about it. Harvard Business School professor Noam Wasserman says that 65% of startups fail because of conflict among their co-founders. It can ruin your startup at a young age. Effective communication to work through the differences and conflicts is an absolute necessity in partnership startups.

2. Speed

Like mentioned before, time to market is a crucial factor influencing the success of a startup. The faster you can develop features, the quicker you can roll it into the market. And the quicker you can roll your product into the market, the better your chances are to succeed.

3. Budget

The first step towards a startup business is developing a minimum viable product. Investors will not fund your startup without seeing an MVP. And to develop said MVP, you will need to pay wages to developers as well as overhead costs. These are going to be your greatest source of cash outflow during the early stages of product development. It is important to be aware of your budget and reduce your expenses. Quarts has reported in 2022 that 37% of startups fail because of running out of money.

4. Quality assurance

Just because you are optimizing for time and money, does not mean that you can compromise on quality. Your product’s quality and ability to solve users’ problems are the ultimate relevant factor for the success of your business. Always try to maintain a balance among speed, budget and quality.

5. Remote work

Remote work is more advantageous to startups than it is to large corporations. The first reason behind which is cost efficiency. Your overhead costs would be cut significantly if you maintain a remote team empowering you with a lower break-even point.

How can hiring an offshore development team benefit your startup?

At this point, you may already have noticed that many of these essential factors can be leveraged through hiring and maintaining an offshore remote team rather than hiring in-house developers.

However, let’s explore the idea even farther. Here are 4 very specific reasons for which companies prefer to outsource their software development.

1. Cost-effectiveness

Startups can easily spend out of budget, run out of money if they are not consistently aware of it. This awareness also comes with the realization that one of the greatest expenses for any product development is on the developers.

But – this problem can easily be solved by hiring offshore developers. No rent, no utilities, no insurance benefits – basically almost no overhead costs. And if you are based in the American or European regions, offshore resources are way less expensive than resources in your geographic area due to the lower cost of living. Hiring a development team from India, Latin America or Eastern Europe can save you half or even two-thirds of the money you’d spend hiring in the USA or West Europe.

2. Efficiency

With a dedicated development team, you will save valuable time on training new employees as the team is much likely to be already trained and experienced in relevant setup. On top of that, you will save time on project management and HR activities as the company you are hiring from will take responsibility for these tasks.

In our day to day tasks, it is usually not that visible how much time we spend on administrative activities. But in the fast-paced environment of a startup, you can save hours by delegating or eliminating these tasks. As a result, you will be able to focus more on activities that truly matter for your business.

3. Larger talent pool

By not constraining your hiring within your specific global region, you open your business up to a substantially larger pool of talents. Especially when you are a startup without the budget to offer as big of a remuneration as large corporations in your area, the best tech talents of your region will generally prefer working for them, not you.

But another part of the world, Bangladesh is producing over 22,000 ICT graduates every year with a relatively smaller software industry. As a result, countries like Bangladesh, India and many offshore ones have a continuous supply of talented developers who can work for your startup at a remuneration reasonable to your business.

Another contributing factor is that many talented professionals, especially in the technology industries, have grown to quite enjoy the flexibility and convenience of remote work. The opportunity to work remotely for a challenging startup is attractive to many, if not most, developers with wonderful technical skills. Therefore, exposing your startup to more skillful resources.

4. Flexibility

Flexibility is a must-have in the development team of a startup. But when you work with an in-house team, shifting gears and changing tech stack is not easy. However, if you outsource to a dedicated team and do it through a company like Prodigies, switching resources as your project pivots is easy giving you the flexibility you need.

With the awareness of the perks and benefits of hiring an offshore development team, let’s move on and explore what you need to do before starting the hiring process.

The pre-hiring checklist

Everything requires preparation. The more prepared you are, the smoother your procedures go. So before you roll up your sleeves and start looking for the perfect offshore development team, make sure to prepare by following this checklist.

 • Set goals

What are your business’ goals? What exactly are you trying to achieve? What do you expect from the development team you are hiring?

These questions need to be pondered before you hire someone or some team. First of all, identify and get clear on your expectations for the MVP. The team you are going to hire now needs to have specific goals to meet within a specific timeline to roll out your MVP as soon as possible. Without you setting expectations early on, they can not achieve it.

After that, define the primary goal of your product and break it down into smaller, manageable steps. Each step should be measurable and considered as a milestone. Each milestone, additionally, should have a deadline attached to it. Create a timeline before you go into hiring so that the whole team can stick to it.

 • Determine skills required

In order to hire the right people, you need to be aware of your project’s requirements. Determine the technology stacks, expertise and skills your product calls for. Then define what rolls you are going to hire for. One project may need quality assurance, another may need business analysts and another one may need both. Be in tune with what the business wants before making a hire. Overhiring has not done any company much good in the long run.

 • Plan the budget

Budget is important for any business. But while you are a startup, it is more important than most things. You must budget for every penny you spend. Have a definitive answer to questions like what is the size of your initial investment and where can you reduce costs or expenses. Leave only the important ones, even a small amount of savings matters. And while you are budgeting for this MVP, start creating your database of potential investors to whom you are going to show your product.

While you are at it, you may want to do some research. Many offshore countries export tech resources. They each have their pros and cons. Dig around a little and find out which country your business should hire from and why.

Ways to find an offshore development team for your startup

After your preparation is complete, it is time to move on to the first step towards hiring your offshore development team. But as you might already know, hiring a remote team is not the same as hiring an in-house developer. The ways and processes are quite different.

Here are 6 different sources you can find an offshore development team from.

  • Referrals from your network.
  • Tech conferences, hackathons and tech-specific meetups.
  • Freelance portals.
  • Tech talent marketplaces.
  • Social media, specifically LinkedIn.
  • Offshore software development agencies.

Challenges of hiring an offshore development team

Every coin has two sides. Hiring offshore developers sure is beneficial to your business. But it does have its own challenges. It is time we explore some of those so you can be prepared with a plan.

 Time zone management

The most common tech talent exporter countries are Southeast Asia, Latin America and Eastern Europe. Chances are that most of these destinations are in different time zones from your location resulting in difficulties to synchronize between in-house and offshore teams.

However, there are multiple modern timezone management tools and asynchronous collaboration technologies that can make this time difference far less challenging. If large corporations with hundreds of distributed team members can manage this, you can as well.

 Nurturing team spirit

When half or more of the team is located in another country far away from your base, face-to-face communication is not an everyday thing. Video conferencing and ‘always on’ instant messengers can only take the team spirit so far. To be connected with a cause and a team, humans often require in person communication.

The best solution we can think of is to visit your offshore team at its location from time to time. Plan a meetup once or twice a year, make a point of getting to know the team and spending time with them. Thinking of the costs of travel? These occasional trips will cost you less than renting an office and paying for your team’s lunches for the whole year. Bonus benefit: you get to visit a new country and experience new adventures while working on your startup!

 Choosing the right vendor

There is an abundance of software development vendors that export offshore tech resources. It can be difficult to find the right outsourcing agency for your business even after intensive research. However, it is important to monitor which agencies follow the best practices of tech talent outsourcing and how much flexibility they provide. Prodigies always focuses on quality, speed and trust to ensure the best services provided to you.

 Navigating cultural differences

Hiring developers from a different country brings obvious cultural differences with it. While working with your teammates from a different part of the world, you should be aware of their cultural preferences. While areas like the US and Great Britain are accustomed to the low context culture, countries like Bangladesh, India and China are more familiar with the high context one. Let’s look at the differences between the two.

Low Context CultureHigh Context Culture
Dominant in the US and Europe.Dominant in Bangladesh, India, China and other Asian countries.
Relies on words and facts.Relies on trust and emotions.
Task-oriented.Team-oriented.
Deadline-oriented.Not deadline-oriented.
Based on logic.Based on intuition.
Flexible to changes.Reluctant to changes.
Follows agile methodologies.Follows waterfall methodologies.
As you can see, there are quite a lot of differences between the two and it can be difficult to work with someone from the other side of the cultural spectrum. However, with the modernization of software development, most dev teams in Bangladesh and India are now following agile methodologies and becoming friendlier to change.

Offshore development agencies like Prodigies train their resources to be able to work within a team of any cultural background by following global standards. Hiring from an agency that follows said standards can make your job of managing a global team way easier in the long run.

The hiring process

We have prepared our requirements and found our hiring source of choice. Now we are in the final stretch. Here’s your checklist to follow and hire the right offshore development team for your startup.

 • Write a detailed job description

The description should include your vision and goal for the project, its functionality, and the tech stack and skill sets required to be a suitable candidate for the job.

 • Do background research

Do the developers have a proven track record? What have their previous experiences been like? Look at the resources’ LinkedIn profiles, go through their CVs and explore their previous projects if possible. If you are a non-technical founder, try to get an opinion from your technical co-founder or a teammate you trust.

 • Ensure your access to the latest code

As a prerequisite for participating in your project, you should ensure the development team gives you access to the latest code. You should be the owner or admin of all relevant accounts on GitHub, TFS, cloud and other platforms.

 • Get familiar with the outsourcing company’s workflow

Every agency has its specific way of doing things. The one you hire from should suit your needs. Find out how the outsourcing company interacts with its clients and assign developers to projects. Explore how flexible the team is to requirement changes and resource replacements. And, of course, don’t forget the NDA. Even before you finalize the decision to hire someone, you have the right to ask for a signature on the NDA if you are going to share specifics of your business during the interview process.

 • Analyze cost-efficiency

Being cost efficient does not mean accepting the cheapest quote. You must analyze if the code quality is up to the mark. Cheap resources often end up creating poorly written code that needs to be rewritten later on resulting in more expense. Do not hesitate to ask for the developers’ GitHub profiles to take a look at their code quality. You are better off finding a balance between cost and quality rather than saving money by compromising on effectiveness.

 • Thoroughly discuss requirements

If the outsourced company or team says they can meet all your requirements within the fixed time without any negotiations, it might mean that they have not analyzed requirements properly. Each development team has its strengths and weaknesses. Nobody can do it all with 100% efficiency unless they are bluffing.

Take time with the team and discuss your project requirements to find out necessary changes and adjustments as soon in the project as possible.

 • Find your project management tool

There are plenty of good ones out there. But not each one is going to work for you or your project. To manage a distributed team, project management and collaboration tools are of essence. Explore tools like Slack, Jira, Trello and more to find out which one fits where in your project management system. Using these modern tools will increase your chances of having a real time idea of your team’s progress saving time spent on meetings and standups.

 • Plan ahead

Managing an offshore development team will mean that your team might be working while you are asleep. This calls for always planning ahead. Make sure everything your team needs to accomplish tomorrow is effectively communicated without any blockers so that you can go to bed without worrying about your project’s progress.

 • Ask for frequent deployment

To be in sync with your team’s progress, you may want to ask them for frequent demos of the MVP development. The demos can be spread out for every one or two weeks, ideally related to sprint length of the team.

While hiring your offshore development team, pay attention to the following factors.

  • Make sure the team understands their assignments. Because of the culture gap, resources sometimes might hesitate to communicate their lack of understanding.
  • Try to get the message across that questions regarding your instructions are always welcome.
    Communicate your business model and goals to the team so that they can understand their tasks and roles better.
  • Try to find resources that have experience working with startups.

Hiring offshore development team through a tech talent marketplace

Entrepreneurs are naturally driven towards new solutions that simplify their workflow. A startup founder is always juggling uncountable activities. With the mission to relieve some of that stress and build a bridge between founders and dedicated development team members, Prodigies started its journey. Our workflow is optimized to make the entrepreneur’s journey smoother.

Here’s a brief overview of Prodigies’ workflow.

  1. We receive thousands of applications every year. After a thorough vetting process, we input only the top 3% into our database of 30,000+ talents.
  2. Our tech talent marketplace gives potential clients access to talented developers working on a full time basis.
  3. After selecting their resource requirements and filling up a quick form sharing their personal information, clients are contacted by our team. Resource requirements are clarified over a phone call or meeting at the earliest possible time.
  4. From our large pool of pre-vetted talents, we shortlist a handful that meet the requirements of our client perfectly.
  5. Client reviews the shortlisted CV and performs an interview if they find it necessary.
  6. After selection of the final candidates by the client, we take care of the paperwork and the resource starts working for the client starting on the client’s chosen date.

This whole hiring process is typically complete within 72 hours giving you the speed your fast-paced startup needs. All overhead costs and vacation management is done by the resource supplier. The client is only responsible for communicating the requirements of the project and, in some cases, overseeing the project’s progress.

Which tech professionals are available at Prodigies?

Prodigies’ talent pool incorporates tech professionals of different expertise and skill sets ranging from .NET and Java to AI/ML and Cybersecurity. You do not need to hire a whole team with project managers, business analysts and QAs. You can pick and choose speciality and seniority level and customize your own team.

Here’s a quick overview of the roles in a dedicated development team.

 Front-end developers

Front-end developers implement the visual aspects of software. They focus on user experience and user interface design. The core technologies used in this field are HTML, CSS, DOM and JavaScript.

 Back-end developers

Back-end developers take care of the server side aspect of software. They focus on building APIs and codes for front-end team’s use. Technologies used in this field include server-side languages such as Ruby, Python, Java; databases such as MySQL, MongoDB and API such as JSON, AJAX, SOAP.

 Full-stack developers

Full-stack developers work on all the layers of software development. There are different types of full-stack developers with different skill sets. However, they generally have the skills to code programs, web and mobile applications, coordinate development processes and take care of issues occuring at any layer – front to back.

 DevOps engineers

DevOps engineers take the responsibility of bridging the gap between software development and IT processes. Their work is important to increase efficiency in developing, testing and releasing software applications.

 Quality assurance engineers

Quality assurance engineers take care of testing and ensuring the quality specifications and standards of your software throughout the project. They are responsible for detecting and reporting any bug in the software during MVP development.

Benefits of hiring offshore software developers with Prodigies

 Large pool of talents

Prodigies has a massive pool of software developers who are all thoroughly vetted and trained to work with a global team. While hiring with traditional resource exporters, you do not get such a large number of potential candidates.

 Reliability

Not only do we have a thorough vetting process, but also have the flexibility of replacing resources for free within a time limit if the resource is not a right fit. We have a 96% success rate of onboarding, making Prodigies a reliable outsourcing destination.

 Transparency

There is no hidden cost while hiring from Prodigies. Each developer’s wage is communicated with clarity which is not changed without prior notice.

 Scalability

You can quickly and easily scale your team up or down with the changing scope of your project which is a common occurrence at the MVP stage of any startup.

 Trustworthiness

Prodigies has a high success rate when it comes to resource placements. Most of our clients have kindly given us wonderful reviews and many have turned into returning clients.

 Speed

Traditional hiring process takes months to onboard a resource. Even hiring from a recruiter can take weeks. With Prodigies, you are much likely to find and select the right candidates within 72 hours who can start working on your project within a couple weeks.

Some frequently asked questions on hiring an offshore development team

What are the primary benefits of hiring offshore developers at the startup stage?
The first and most important benefit of this is cost-efficiency. Hiring offshore developers is less expensive with savings on overhead expenses. On top of that, hiring offshore developers will give you access to some of the most talented developers around the world, improving your chances of success.
What are the best areas to hire offshore developers from in 2023?
Southeast Asia, Eastern Europe and Latin America are the most popular destinations for hiring offshore developers. Countries of Southeast Asia have many cost-efficient options because of these areas’ lower cost of living and large pool of IT graduates.
Which tools should be used to manage an offshore team?
Collaboration tools are necessary to communicate with and manage distributed teams. Different tools may serve different purposes in your project management. While Slack or Skype are needed for communication management, task management can be done using Jira, Asana or Trello. GitLab and BitBucket are our favorite code management tools.

However, make sure to explore and find the tools that work for you and your team. Whatever tools you choose, it is important to make the most of them and use them correctly.

Should you hire an outsourcing agency or freelancers?
It completely depends on your project’s needs and your preferences. While freelancers may cost a little less, they also provide less reliability. Hiring from a trustworthy outsourcing agency will give you a guarantee of the resources’ quality and an assurance of meeting deadlines.
Where are the best developers from?
Every area has a pool of talented developers. However, the subcontinent of India and Latin American nations have a large number of talented and highly skilled developers who are being outsourced to countries like the USA and Europe.

Conclusion

In the fast-paced and ever evolving environment of a startup, hiring offshore development teams is a well-suited practice. Before you make the hire, though, get clear on your requirements, plan the budget and select the preferred source for hiring.

Prodigies is one of the best platforms to find and hire offshore developers for startups. We cultivate and nurture a large pool of pre-vetted talents ready to work with global teams and challenging projects. If you are looking for an offshore development team, consider contacting us at Prodigies!

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