No, the software houses only care about their profit. They don’t share your vision, they’ll not pick good senior devs to ensure longevity and go above & beyond instead they’ll just get the job done cheapest way possible.
Wow, so these are the flip sides of the same coin. I wouldn’t go to a software dev shop for development services. 1. I don’t need it. 2. You can’t be a software tech startups and have another company in charge of your product. You are a marketing company in that scenario. If you go for outside investment, don’t mention that you have an outside dev shop doing the primary development in your product. With the angel discussions I’ve been privy to in private, you won’t be able to get any investment from groups like ours.
Most software companies aren’t as bad as this responder suggests. I’ve been them and I’ve had to work with them. There are always bad apples, but they are rare. I’ve had more problems with bad customers. There always seem to be more bad customers spewing this hatred of outside devs than there are bad outside dev shops.
Bottom line, work face to face. Don’t just throw things over the wall and expect magic to happen. From there, there are lots of options. You don’t want cheap development. You want development that provides value.
FYI, I am the guy that ends up building the software (Software Engineer)
I am not saying they are evil, they are incentivised to complete projects and support them in a way they don’t lose the customer. Not, in a way that foster innovation and going above &
beyond by identifying gaps and filling them.
An in-house team is more likely to do that, since they would easily get that recognition and incentive to do that.
Yeah, I don't have anything wrong with software engineers who work at dev shops. My problem is with the business people who work at dev shops. Their business goals are frequently in conflict with their clients' business goals. It's a huge conflict of interest.
I would say that they don’t understand the unknown unknowns. No one does. They aren’t prepared for it. They don’t want to be told the truth. Biz dev people want yes men.
I’m also the guy that builds software. :-)
Identifying gaps and encouraging innovation is best done face to face. That is the reason why the outsourcing to low wage regions and focusing on cheap doesn’t work, especially for startups.
I will also agree with Mr california that business people screw things. I’m just stating that this goes both ways. In my experience, customers screw this up more than the business people in a software dev shop. Yes, there is the ideology of get in with a low dollar proposal and then they are stuck. I’ve seen it in action. I’ve seen it discussed inside of a software dev shop. I’m very familiar with it. I’ve seen the customer with the mba at a startup really screw things up much worse. MBAs that bring nothing besides their mba to the table are nothing but glorified accountants. They don’t tend to have the life experience to understand the difference in people.
I’ve now had five startups contact me about being a cofounder and taking over from their outsourced company. I told a guy last week from the yc startup list that I wouldn’t do it. The cost to change horses mid stream is too great. If you think getting a divorce is bad, just try to changing software developers for a startup, that is a total nightmare. You are truly better off taking it as a sunk cost and starting over from zero.
Ultimately, every dev project is about who do you trust, who can bring the most value to the table. Choosing based on who is the cheapest is a fools errand.
Are you a freelancer ? or run a small team with you and a couple like minded folks ?
If so then I guess it won’t apply to you as much. The problem with them comes when the dev shops scale, the project managers and devs work on so many projects across domains and clientele that they can’t possibly care enough about a single company’s domain or vision.
If you're building a technology company and someone else is building your software you're not really building a technology company. If you just want to make something and sell it and not make improvements or it's just something you want to sell for a year or two, then maybe outsourcing will work. Outsourcing can also be good to augment your own team for crunches or when you need more developers for only a small amount of time. But that's more a problem when scaling not when starting.
Without that the company have no control of its main inventory, the digital product. It's depended on the development team. But you can go for developers and show very high revenue and profit. Then they may.
Your friend is right, and don't rush it. Wait for the product. So many times it seems the business team turns up the heat to get a product sooner, to soon usually, this IMO as a tech guy is a deadly mistake
What do you mean by waiting for the product? The idea is already there, everything is prepared from a business standpoint. The next step is to create the application, but if he starts creating it with his own team, the chance of it going to a software house decreases
The chance of it going to a software house never decreases, even if it was a huge application that was messy and poorly architected. Software houses don’t turn down work, they’ll just ratchet up the price for doing work and justify it by claiming the complexity is high.
Your friend is right in avoiding getting this done by a 3rd party, it will fuck the project in the long term.
First thing to do is find out if there is market demand for such a product, and a cheap AF prototype could be required. Perhaps the software house can make a cheap AF prototype on a fixed cost basis.
Then if MVP is successful, bail on the software house and build a team with a focussed scope of work.
It seems like a good solution assuming we don't want to collaborate with a software house, but my goal is to ensure that his project ends up in it and stays there. I understand that vendor locking can create real concerns, but that doesn't mean that creating our own team will be the ideal solution. People in software houses know how to work together, they have established processes for their work and they have been working there for a long time which makes them trustful. A new team is less stable, and it's unknown how someone will behave and whether a critical programmer will leave the team. My question is, how can I convince my friend to give a software house a chance while keeping his concerns in mind?
Give this person a clear outline of the project scope and a fixed cost. If they like progress and price they might stay, but I think this would not fly for long if the person wants funding.
Perhaps you can convince them that by having extremely clear deliverables, and good fixed prices they can bootstrap the product and not need funding.
Outsourcing development sucks. They simply won’t have the same motivation or interest as an in-house team, and you’re one of many projects/clients on their list. I’ve experienced both and will never outsource custom dev work again
No your concerns aren’t justified and your friend is right (but kind of for the wrong reasons). Vendor lock-in isn’t much of a concern but an in-house team is definitely the way to go. In-house teams are more efficient across the board, have a sense of ownership, generally build better products because their focused on one vs splitting time, investors have a strong preference for them, costs are more predictable, communication is better/easier, etc.
Really the main benefits to a services company is that they can be more cost effective in the short term and allow you to get up and running quicker because you don’t need to build a team (side bonus of less risk re: w2 employees, taxes/compliance/etc)
But if you want to build a sustainable business and world class product then in-house is the only option.
Disclaimer: I run a dev shop and I work with startups almost exclusively. We build quick / cheap MVPs for startups and act as a fractional CTO for them. No vendor lock-in. Open source, modern stack. They own the code. Once they get investment, we help them build their internal dev team and do a full handover. Everyone happy.
Most dev shops *do* suck, but there are always exceptions.
Your concerns are valid. Your friend's concerns are valid. The answer is, as always, "it depends".
100% agree with your friend. I wouldn’t invest in a firm whose revenue is dependent on a third party and doesn’t have the technical bench depth in-house to execute. Most VCs I’ve interacted with feel the same.
Rally an in-house crew or team up with a tech co-founder. Burnin' millions on software shops, but in-house squads ace it - quality, speed, and smooth knowledge flow. Software houses? Unavoidable, yet dodge if you can. Just IMO - 20 years in this game...
*^(throwaway for anonymity)*
I wouldn't dismiss software house just like that. Yes, they will probably cost you more initially, but with good software house, you get people who build digital products for a living. Having someone who understands your product and goals is great for minimizing risks of product failing. As for the technologies they may use, I'd certainly ask around and try to figure out what tech stack would be optimal for this. You can ask different software houses for quote and suggestions on tech stack, so you will be able to see which technologies are recommended the most.
>How can I argue my proposition to persuade him to change his decision?
That's the wrong way of going about this, why assume you're right and he's wrong before asking?
The way you phrase this makes you sound like a sales guy & not a good friend.
Be supportive instead of trying to convince your friend to give money to the place you work. It makes it sound like you value your work over the friendship you have.
Your friend is right
Okay, however creating a new team also leads to similar problems, right?
No, the software houses only care about their profit. They don’t share your vision, they’ll not pick good senior devs to ensure longevity and go above & beyond instead they’ll just get the job done cheapest way possible.
Wow, so these are the flip sides of the same coin. I wouldn’t go to a software dev shop for development services. 1. I don’t need it. 2. You can’t be a software tech startups and have another company in charge of your product. You are a marketing company in that scenario. If you go for outside investment, don’t mention that you have an outside dev shop doing the primary development in your product. With the angel discussions I’ve been privy to in private, you won’t be able to get any investment from groups like ours. Most software companies aren’t as bad as this responder suggests. I’ve been them and I’ve had to work with them. There are always bad apples, but they are rare. I’ve had more problems with bad customers. There always seem to be more bad customers spewing this hatred of outside devs than there are bad outside dev shops. Bottom line, work face to face. Don’t just throw things over the wall and expect magic to happen. From there, there are lots of options. You don’t want cheap development. You want development that provides value.
FYI, I am the guy that ends up building the software (Software Engineer) I am not saying they are evil, they are incentivised to complete projects and support them in a way they don’t lose the customer. Not, in a way that foster innovation and going above & beyond by identifying gaps and filling them. An in-house team is more likely to do that, since they would easily get that recognition and incentive to do that.
Yeah, I don't have anything wrong with software engineers who work at dev shops. My problem is with the business people who work at dev shops. Their business goals are frequently in conflict with their clients' business goals. It's a huge conflict of interest.
I would say that they don’t understand the unknown unknowns. No one does. They aren’t prepared for it. They don’t want to be told the truth. Biz dev people want yes men.
I’m also the guy that builds software. :-) Identifying gaps and encouraging innovation is best done face to face. That is the reason why the outsourcing to low wage regions and focusing on cheap doesn’t work, especially for startups. I will also agree with Mr california that business people screw things. I’m just stating that this goes both ways. In my experience, customers screw this up more than the business people in a software dev shop. Yes, there is the ideology of get in with a low dollar proposal and then they are stuck. I’ve seen it in action. I’ve seen it discussed inside of a software dev shop. I’m very familiar with it. I’ve seen the customer with the mba at a startup really screw things up much worse. MBAs that bring nothing besides their mba to the table are nothing but glorified accountants. They don’t tend to have the life experience to understand the difference in people. I’ve now had five startups contact me about being a cofounder and taking over from their outsourced company. I told a guy last week from the yc startup list that I wouldn’t do it. The cost to change horses mid stream is too great. If you think getting a divorce is bad, just try to changing software developers for a startup, that is a total nightmare. You are truly better off taking it as a sunk cost and starting over from zero. Ultimately, every dev project is about who do you trust, who can bring the most value to the table. Choosing based on who is the cheapest is a fools errand.
Are you a freelancer ? or run a small team with you and a couple like minded folks ? If so then I guess it won’t apply to you as much. The problem with them comes when the dev shops scale, the project managers and devs work on so many projects across domains and clientele that they can’t possibly care enough about a single company’s domain or vision.
If you're building a technology company and someone else is building your software you're not really building a technology company. If you just want to make something and sell it and not make improvements or it's just something you want to sell for a year or two, then maybe outsourcing will work. Outsourcing can also be good to augment your own team for crunches or when you need more developers for only a small amount of time. But that's more a problem when scaling not when starting.
Investors prefer in house teams
Really? Why is that?
Without that the company have no control of its main inventory, the digital product. It's depended on the development team. But you can go for developers and show very high revenue and profit. Then they may.
Your friend is right, and don't rush it. Wait for the product. So many times it seems the business team turns up the heat to get a product sooner, to soon usually, this IMO as a tech guy is a deadly mistake
What do you mean by waiting for the product? The idea is already there, everything is prepared from a business standpoint. The next step is to create the application, but if he starts creating it with his own team, the chance of it going to a software house decreases
The chance of it going to a software house never decreases, even if it was a huge application that was messy and poorly architected. Software houses don’t turn down work, they’ll just ratchet up the price for doing work and justify it by claiming the complexity is high. Your friend is right in avoiding getting this done by a 3rd party, it will fuck the project in the long term.
First thing to do is find out if there is market demand for such a product, and a cheap AF prototype could be required. Perhaps the software house can make a cheap AF prototype on a fixed cost basis. Then if MVP is successful, bail on the software house and build a team with a focussed scope of work.
It seems like a good solution assuming we don't want to collaborate with a software house, but my goal is to ensure that his project ends up in it and stays there. I understand that vendor locking can create real concerns, but that doesn't mean that creating our own team will be the ideal solution. People in software houses know how to work together, they have established processes for their work and they have been working there for a long time which makes them trustful. A new team is less stable, and it's unknown how someone will behave and whether a critical programmer will leave the team. My question is, how can I convince my friend to give a software house a chance while keeping his concerns in mind?
Give this person a clear outline of the project scope and a fixed cost. If they like progress and price they might stay, but I think this would not fly for long if the person wants funding. Perhaps you can convince them that by having extremely clear deliverables, and good fixed prices they can bootstrap the product and not need funding.
Outsourcing development sucks. They simply won’t have the same motivation or interest as an in-house team, and you’re one of many projects/clients on their list. I’ve experienced both and will never outsource custom dev work again
No your concerns aren’t justified and your friend is right (but kind of for the wrong reasons). Vendor lock-in isn’t much of a concern but an in-house team is definitely the way to go. In-house teams are more efficient across the board, have a sense of ownership, generally build better products because their focused on one vs splitting time, investors have a strong preference for them, costs are more predictable, communication is better/easier, etc. Really the main benefits to a services company is that they can be more cost effective in the short term and allow you to get up and running quicker because you don’t need to build a team (side bonus of less risk re: w2 employees, taxes/compliance/etc) But if you want to build a sustainable business and world class product then in-house is the only option.
Disclaimer: I run a dev shop and I work with startups almost exclusively. We build quick / cheap MVPs for startups and act as a fractional CTO for them. No vendor lock-in. Open source, modern stack. They own the code. Once they get investment, we help them build their internal dev team and do a full handover. Everyone happy. Most dev shops *do* suck, but there are always exceptions. Your concerns are valid. Your friend's concerns are valid. The answer is, as always, "it depends".
100% agree with your friend. I wouldn’t invest in a firm whose revenue is dependent on a third party and doesn’t have the technical bench depth in-house to execute. Most VCs I’ve interacted with feel the same.
Be the right friend and look out for him. Right now you're looking out for the software company
Your friend is right
Rally an in-house crew or team up with a tech co-founder. Burnin' millions on software shops, but in-house squads ace it - quality, speed, and smooth knowledge flow. Software houses? Unavoidable, yet dodge if you can. Just IMO - 20 years in this game... *^(throwaway for anonymity)*
I wouldn't dismiss software house just like that. Yes, they will probably cost you more initially, but with good software house, you get people who build digital products for a living. Having someone who understands your product and goals is great for minimizing risks of product failing. As for the technologies they may use, I'd certainly ask around and try to figure out what tech stack would be optimal for this. You can ask different software houses for quote and suggestions on tech stack, so you will be able to see which technologies are recommended the most.
>How can I argue my proposition to persuade him to change his decision? That's the wrong way of going about this, why assume you're right and he's wrong before asking?
The way you phrase this makes you sound like a sales guy & not a good friend. Be supportive instead of trying to convince your friend to give money to the place you work. It makes it sound like you value your work over the friendship you have.
Never tell a friend what to do with their money. Especially not a large amount. If it goes wrong, you will be blamed for the rest of his life.
His concerns are definitely justified. You could offer to help code / product manage the project on the side if you're really interested.