You have been working fruitfully on your idea for several months. Behind a lot of presentations, preparations, negotiations, you began to realize your idea. But once you’ve put your ideas on paper, it’s time to move on to the technical part, and you need to decide whether you will hire an in-house team or choose an offshore team for startups.
According to Faylor’s research, about 90% of startups fail, and 10% of startups fail within the first year. Most startups fail during years two through five, with 70% falling into this category. Knowing these statistics proves once again that the preparation and implementation of startups requires maximum effort and detailed training.
Before we talk about the benefits of offshore teams for startups, the features to look out for, where and how to hire an offshore team, let’s understand what startups need.
4 Features Inherent to a Startup
● Pace of Business
The sooner a startup becomes a finished product, the sooner it will start making a profit. Therefore, it is very important to find a team for the startup that will not be delayed over time.
● Limited Budget
Usually, startups have a limited budget, so you should not immediately rent expensive offices and buy the latest computer equipment. Otherwise, at this rate, the startup may not start. Investors are not always willing to give money for the development of a startup, so you, as the founder, cannot be sure when the money will come to you next time. Your task is to make rational use of the money. According to data from Smart Asset, one of the most expensive startup costs is payroll, averaging around $300,500 for five employees across the U.S.
The main criterion in the manufacture of the product is quality. If your product doesn’t work properly, it just won’t be used. This is especially important when choosing the offshore team for startup, because given the statistics of failures, startups have no right to make mistakes. Everything should work flawlessly!
● Innovation and Technology
The market for technical products today is extremely competitive, and in order to make a really cool product that will be used by thousands of people, you need to find offshore developers who are familiar with innovations and ready to apply them to your startup. It is also important that the specialist is always aware of new technologies that will also potentially be used in the development of your product. The more innovative and technological your product, the more people will talk and learn about it.
Sounds like a challenge, right? Is it possible to find all these qualities in one remote team? It is possible, but you need to know how to find such an offshore team for your startup.
Why Offshore Teams for Startups?
● Speed of Work
Offshore teams work fast; that’s a fact. Why? Not the only but the main reason for this: usually, offshore teams for startups are paid for man-hours, that is, for the work actually done. Therefore, first of all, the specialists themselves are interested in performing the work quickly and efficiently. You, in turn, can discuss access to tracking systems, so you can keep track of all the work done and the exact time of its performance.
In order not to be unfounded, here are the statistics: a 2019 Deloitte survey revealed that as many as 78% of businesses cultivated a good relationship with their outsourcing partners, and 31% of companies outsource to improve service quality. We should also not forget that offshore companies are always looking for new customers and expanding their teams, so they need to work well to establish themselves in a competitive market and prove themselves to potential customers or continue to cooperate with existing customers on their potential projects.
● The Question of Money
Another important issue in the decision to hire an offshore team for startup is the issue of cost optimization. 59% of companies outsource to reduce or control cost. This is not surprising, because, for example, an average hourly rate for a senior developer in the US starts from $60 per hour while in Ukraine it’s around $30 per hour. Owners of IT businesses and startups are well aware of this and know that by hiring an offshore team, they will be able to reduce costs while maintaining quality.
To catch combo, professionals must have high professional skills backed by appropriate education. According to a DOU study, 89% of IT professionals in Ukraine (Europe) have at least a bachelor’s degree. With the growth of demand for IT specialists, the number of various additional advanced training courses has also increased, and specialists are happy to apply this additional knowledge at work. DOE research also showed that 64% of IT professionals prefer to work at the start of a project, as it is a great opportunity to apply new knowledge and technologies.
With an in-house team, it will be difficult to make changes to the project or change technology because the team is already formed; you need to adapt to your team’s skills or look for new professionals if your needs change during the project. This would take more time and money. If you hire an offshore team for the startup, you have more opportunities to make changes during the project. Offshore developers for startups are flexible, able to move between projects according to new customer needs. This is a very important feature for startups, because it is during the development of startups that many unplanned technical changes appear.
● Fewer Conflicts
Usually, the startup is the idea of two or more people who either studied together or are friends. It is not always possible to predict how the same person will behave in business, so conflicts arise. Fortunately, offshore teams for the startups are experienced and have strong soft skills, which will help to avoid conflicts between you and your team.
You may doubt whether you can hire an offshore team for the startup as much as you want, but the fact remains, World-famous technical products such as Slack, WhatsApp, Google, Alibaba, GitHub and many others were developed by offshore teams and are still increasingly popular among users.
Where to Start When Hiring a Remote Team for a Startup?
● What is Your Project and What Does It Need?
This is the first thing you should do before you start looking for an offshore team for the startup. Once you have an idea, you start thinking about it and immediately put your thoughts on paper. So the project will start from a dream and move step by step into reality, and you will begin to understand what you need and what the needs of humanity your project solves. This will help you clearly identify the needs while hiring the offshore team and the product will exceed all your expectations.
Of course, you need to calculate a budget for your startup. You will hire a remote team for your startup according to your budget. Here are some basic tips for calculating your budget: don’t forget about the extra costs (purchasing licenses, possible business trips, additional equipment), clearly spell out your needs item by item, pay attention to the smallest details (think about how you control the working hours, how you will pay – hourly or at the rate).
● Select the Country Where You Want to Hire the Offshore Team for your Startup
There are many offshore locations around the world, and each has its advantages and challenges. You should make a short list of the countries that are most suitable for you by time zones and cultural similarities, and also compare the price/quality ratio.
The benefits of offshore teams for startups are obvious, and we have already mentioned them as well as the challenges that may await you when searching for an offshore team.
Challenges with Offshore Teams for Startups
● Different Time Zones
This can really be a challenge, because, for example, you are still working during the day, but it’s already evening or night where you team is working, and you can not solve an important work issue immediately. To avoid such problems, discuss the work plan in advance, and then check the progress of its implementation during your working day. Also, for example, if the offshore team for the startup is in Europe, a few hours will still coincide with your workers, so try to resolve all issues during this period of overlap.
● Lack of Face-to-Face Communication
To some this may seem like a challenge, to others no. Given the current pandemic period, this problem has gradually ceased to be a problem and even Google has announced that all workers will work remotely until spring 2021. But still, if this is the problem for you, it can be easily solved by holding daily online meetings to keep in touch with your remote team.
● Many Options for Offshore Teams for Startups
That’s really a challenge! Once you have decided that you want to hire an offshore team, you are faced with many options for countries, cities, companies, competency, experience level and team structure, etc. Therefore, to choose the best option for comfortable cooperation, as we have already said, pay attention to time zones, cultural similarities, compare price/quality ratio, reduce the list of countries and then companies to 10 and read reviews about these offshore companies’ cooperation.
● Cultural Gap
In order to make cooperation with an offshore team as comfortable as possible, hire a remote team from a country where cultural and managerial values are similar to the values of your country, for example, in the United States as in Europe, the horizontal model of management, in which all employees are equal; they are individuals who do their job because it is interesting and helps them develop. The horizontal management model provides for personality, individual decision-making and responsibility for them. In Japan, for example, the vertical model of management, where there is a clear hierarchy of who is the leader, who is middle and who is low, the last word will always be for the leader.
Starting a startup is not an easy task, and choosing an offshore team is another difficult task. Now that you know the potential challenges you will face, avoid them, decide what your startup really needs. Put your budget in order and then choose an offshore team for the startup based on your needs. Do not underestimate remote professionals; they have many advantages, including quality and execution time.
Premium Offshore Software Development by Israel IT
We at Israel IT have experience working with startup founders. Based on this, we know the possible contingencies that can challenge startups. With our previous experience, we guarantee quality advice on technology, budget calculation, selection and hiring of the offshore team for your startup by professional recruiters. We combine professionalism with human qualities to achieve maximum results. If you are interested in cooperation, find more details about software development for startups on our site.