Since founding Altar.io I’ve worked with a lot of entrepreneurs and business managers who struggle to find developers for their startup.
Let me give you one example. Two years ago a data company from Switzerland reached out to me with this exact problem.
They already had an in-house team and a successful product. However, they were now struggling to find local, top-tier talent to grow and expand their in-house team.
So, instead of limiting themselves to one geography, they decided to look further afield and build a dedicated team of developers to augment their IT team.
Two years later, it’s been exciting to help them grow and augment their team and have had zero staff turnover since we began working with them. For the developers, it’s the best of two worlds, a local touch, office, in-house training and perks and an exciting host of projects from the client.
The hard truth is, great software developers aren’t easy to find. More than that, if you’re able to find them they can often be expensive.
That’s why so many startups turn to dedicated teams from great software houses to build or augment their technical department. It’s quicker, cheaper, easier and (providing you choose the right partner) produces the same results as an in-house team.
In fact, some would argue that the dedicated team method can actually produce better results, as an experienced software development agency will have a whole pool of resources available to you.
In this article, I’ll take you through everything you need to know to onboard a dedicated team.
Let’s start with a quick definition of what the dedicated team model is.
What is A Dedicated Software Development Team?
In a nutshell, the dedicated team model means using a software development company to build a technical team according to the requirements of your project. They become a natural extension of your in-house team – essentially they’re remote employees. They work with you for an extended period of time – years- while your partners ensure all logistics, legal, payroll, hiring & firing are managed with little effort from you.
Here are some roles typically sought after in a dedicated software development team:
- Tech Leads
- Software Developers
- Business analysts
- Project Managers
- Product Experts
Companies often choose this model because it’s faster and often cheaper than onboarding an in-house team. More than this, the software development company brings a plethora of technical experience to your startup that you can benefit from.
But more on this later, first let’s look at whether or not a dedicated team is the right choice for your startup.
Should you Hire a Dedicated Software Development Team?
Whether or not a dedicated team will work for you depends entirely on your business needs.
The first instance where a dedicated team can be a good option is when you want to rapidly grow and expand your business. Onboarding a dedicated team takes the majority of the hiring process out of your hands and will be carried out by the software development company (more on this in the dedicated team vs hiring section below).
Another instance in which a dedicated team could benefit your startup is when your project needs to stay flexible. In rapidly changing industries, a flexible development team is vital for any chance of success. High-quality dedicated teams will not only be flexible by nature, but they will also normally be working at the cutting edge of technology – and on desired technologies for which hiring is toughest. This means that not only can they adapt to changes, but they will also often foresee the evolution of technology and bring it to your attention quickly.
Next, there’s no point onboarding a dedicated team unless you can give them enough work to do. Therefore, a dedicated team can benefit your startup when you have a considerable technology workflow to achieve. If you don’t, then you should consider a different model, such as time and materials.
Finally, you should consider the price and length of your project before deciding to onboard a dedicated team.
Dedicated software development teams work best for long-term projects, around a year plus in length.
Project-based work (a.k.a. Time & Materials) is a good option for projects aiming for a span below one year as there’s no commitment to stay on. For longer-term however it makes sense to lock in a dedicated team as the price per hour on average will be anywhere from 30 to 50% less on a long term basis. The lock-up of team members in a single project reduces the allocation risk (for the software development company) and that justifies the reduced price.
Companies that opt for this model often have a new strategy and roadmap for digital transformation. However what they do have is a structure that is geared to work on an existing product, often with legacy technologies.
To reach the decision to go for a dedicated team, such a company has decided that it is too hard to find talent locally, too expensive or will take too long to have the talent in place to execute on the plan.
Additionally, these are pragmatic, goal-oriented companies that are not too keen on making the extra effort to set up an entire division abroad complete with hiring managers, office managers, office, fitting, legal structure, accounting, etc.
When It Works
A dedicated team works well with teams that have a good focus on a business vision and especially seasoned Project and Product people who can steer the work to be efficient and exciting.
Take, for example, a consulting company who gathers specialists to solve business challenges and they want to create a marketplace. They have a business vision. What they don’t have, however, is the technical ability to execute the project within a three-year roadmap. By onboarding a dedicated team, they can quickly build the MVP and create the extended roadmap to fulfil the business vision.
When It Doesn’t
On the other side of the coin, dedicated teams struggle when the projects do not have clear goals or project management. Or when the project is in an ideation stage.
A good example of this is when the project is new, with a time period of less than one year. At that point, you should consider a time and materials model.
Dedicated Software Development Teams vs. Time & Materials
Just like the dedicated team model, time and materials allow for a flexible approach to both the development process and budget. Thanks to this flexibility, scalability and quick adaptation are easily attained with the time and materials model.
It all comes down to how long you intend to work on your project.
For projects to up to nine months in length, it makes more sense to hire a Time & Materials team. For commitments longer than that you should definitely consider a dedicated team as, from our experience, it costs on average 40% less and has the flexibility to work on changing desired outcomes.
Dedicated Software Development Team vs. Hiring In-House
Hiring a dedicated team is, generally, cheaper, easier, carries less risk and is less effort for you than hiring in house. It consumes much less time from your resources and these team members do not show up on your balance sheet as employees. It’s all much simpler, starting with the hiring process itself.
Many startup founders struggle to find the right talent, as they’re inexperienced in hiring and what they should be looking for in a candidate. In fact, 83% of business leaders and HR managers are struggling to find the right talent for their teams.
When it comes to onboarding, the burden of shortlisting the best talent isn’t on your shoulders, it’s on the shoulders of the software development company you’re working with.
They will carry out the initial screening of candidates, whittling the list down to the very best. Only then will you and your management team interview them and choose from the final candidates.
For you, this means a lot less time and effort, as you will be carrying you around three interviews with pre-selected, viable candidates (per position) instead of:
- Sourcing from the talent pool
- Reviewing Applications
- Pre-screening candidates
- Interview preparation
- Carrying out around 20 interviews (in our experience)
- Shortlisting the candidates
- Carrying out second interviews with those candidates
- Closing the process and hiring, including calling successful and unsuccessful candidates and reference checks.
This adds up to an average time-to-hire of 30 hours per candidate in the tech industry.
Onboarding a dedicated team can save you valuable time that you can instead spend on your product and business vision.
All of this to say, when hiring you need:
- A rock-solid process
- Good PR and marketing skills to attract prospects
- A team of hiring managers
- A structured onboarding process.
When you hire a software development company to build your dedicated team, you simply need to carry out final interviews for pre-selected, top talent candidates.
No to mention the work you need to carry out once you’ve onboarded an in-house team. Office work such as payroll, taxes, firing fees, legal issues etc. Whether or not your team can have stock options and other perks.
When you onboard a dedicated team, all of this is on the balance sheet of the vendor, not yours.
Benefits of a Dedicated Software Development Team
As we already mentioned, hiring an in-house team can be an expensive and arduous process – taking often over a year to reach the scale that a dedicated teams provider can provide in a couple of months. Simply put, it is cheaper to onboard a dedicated team for your startup.
It’s also cheaper than the time and materials model for a long-term project.
The dedicated team model allows you to scale your team, up or down, depending on your project’s needs. In a startup environment, where things are usually lean and agile, this flexibility is invaluable.
Experience & Expertise
A well-established software development company will have a wealth of experience in a range of industries and above all, excellent access to high-quality candidates. Most likely, they’ve already built something within your industry. This means they will already have an idea of what you will need within your dedicated team, and it will be quicker for them to align on your business needs.
A Reliable Long-Term Business Partnership
Just like your own internal team, the dedicated team will work with you typically for years on attaining development roadmaps. The main benefit is the partner’s commitment to having a strong and productive team while giving you near-zero time spent on the management of HR, office, hiring and firing.
Cons of Dedicated Development Teams
Inefficient for Short-Term Projects
As we’ve mentioned, the dedicated team model is best suited to long-term projects. For shorter projects, I would recommend the time & materials model.
Misalignment with the Service Provider
As with outsourcing anything that isn’t a commodity, it’s essential that communication is clear. If your service provider fails to understand the scope of your project, and what you need in a dedicated team, you could end up with the wrong team for the job.
This doesn’t just apply to the skills required to carry out your project. You also need to make sure you align with the service provider on company culture (something we’ll talk more about later).
That being said, here’s how to successfully onboard and manage a dedicated team.
Related: Expert Interview: How to Hire Top Talent in Startups
How to Successfully Hire and Manage a Dedicated Team
Before You Look for Your Team
If you’re building a new product, the best way to know if you require a dedicated team or time & materials is by scoping the product.
For that, an agency can help you.
At Altar.io we have a structured process to do this. It has helped many ambitious early-stage projects move past the ideation stage and build an MVP.
If, on the other hand, you already have your product, and you’re simply looking for new A-Players with the right culture and tech skills to augment your in-house IT team, here are just some places where you can find a service provider to help you build your dedicated team of developers.
Where to Find a Dedicated Team of Developers
There are several places to find a service provider, such as a software development company, to help you build a dedicated team. The best place to start is to talk to family, friends and colleagues for referrals.
If your close circle of connections don’t point you in the right direction, your next best step is Google. Just ensure you use the right keywords such as “software development services” or “dedicated team services”.
Aside from Google, there are several other ways to find a dedicated team of developers for your startup, starting with B2B platforms.
Communities & Social Networks
Another great way to find a dedicated team of developers is to ask for advice. For example, leveraging your LinkedIn network to find other founders who’ve used dedicated teams, even to ask the service providers themselves for advice.
Another great place to ask for advice is Quora. Here, professionals and experts will often happily provide valuable answers to entrepreneurs and founders that ask questions on the site.
Finally, keep an eye out for tech events, they’re a great way to learn more about tech and grow your network.
How to Successfully Choose a Dedicated Team of Developers
Once you know where to find a dedicated team of developers it’s essential that you choose the agency that’s right for your startup. There are several factors you need to consider starting with track record and experience.
Track Record & Experience
You need to make sure the partner you choose to build your development team has the experience and a good track record.
Start by looking into their portfolio to see the kind of companies they’ve worked with before. Then reach out to those companies and ask them about their research.
If you have a friend with technical experience who can also validate the agency’s portfolio I would recommend asking them to.
The agency you choose to build your dedicated team should have experience in the technology you intend to use to build your startup. If they know the technology, they will know which hard skills to look for in your development candidates
If you’re building a startup, you will want your team to use the lean and agile methodologies that have become standard practice for contemporary companies.
It’s essential that the partner you choose to help you build your team also follows these methodologies, so they fully understand the needs of your startup.
One of the most important aspects of any business relationship is communication. It’s no different when it comes to building a dedicated team of developers.
More often than not, they will not only be remote but in a different country. Therefore you need to ensure the agency or service provider you work with has clear communication processes in place.
Onboarding Process & Company Culture
It’s essential that the company you partner with to build your dedicated team has a rock-solid onboarding process. Even more important is their company culture.
This is a people business where karma, culture and working on exciting projects means obtaining and keeping what you need: the best people to work on making your Roadmap a reality.
Your culture should align with theirs. Remember, your dedicated team will gain elements of both your company culture and the culture of the service provider – where they’re based. A misalignment here can risk the relationship further down the line.
How to Manage a Dedicated Software Development Team
As discussed before it is fundamental to have an own internal operational and proactive chain of Product and Project management. It’s important that you’re able to steer your dedicated team towards delivering both:
- Your fundamental business vision and;
- Precision throughout the ever-changing 15-day Sprint requirements.
Critically, you should treat your remote team the same way you would an in-house team. They should feel that they’re a part of your company culturally, even if they’re miles away.
Dedicated teams blend in your culture whilst keeping elements of their company’s culture. If your culture and project are great and you are hiring a team from an exciting Software house, then chances of success should be higher.
Dedicated teams are a great way to hit the ground running when you have a robust roadmap to execute. They can benefit you when you have your own experienced Product and Project people and are looking to expand your team quickly with minimal effort (legal, sourcing, office management, etc). The dedicated team model will still allow you to save vis-a-vis Time & Materials and, crucially, still be able to cherry-pick among great candidates that will be working for you for the long term.
Good luck & thanks for reading.