Outsourcing IT Services-Freelancer versus Technology Partner

This is a part 3 of a 3 part series on building your own startup. Check out the previous two parts here:
Part 1: How successful startups built their product in the early stages?
Part 2: The True Cost to Build Your Own Tech Team

This is the most common question asked by the founders of tech startup- Which is better? Freelancer or a technology partner.

Whether in house team, freelancer or technology partner all comes with their own benefits and associated risk. Also, bear in mind that none of these approaches is better or worse than the other - each is solid and suitable in particular circumstances.

However, before choosing a suitable approach for your startup, you need to evaluate each option on different parameters and understand what resonates best with your vision and long term strategies.

Factors to Consider Before Choosing Between a Freelancer Or a Technology Partner.

1. PROJECT SPECIFICATION

There is no straight answer to the question - which approach is the best option for my project? Each project is unique in its own way and there is no absolute way to relate the success of any approach from one project to another project. We need to carefully analyze the full specifications of the project to choose the best fitting approach:
Project Technology: If your project involves new technology then technology partner will be a good choice since it speeds up the time to start and provides the best practices for your project.

Whereas, if your project involves a variety of technologies then freelancers will be a better choice as they provide higher flexibility compared to a technology partner or in house team.

Project Size: Freelancers are a good choice if you are building a small tool or application with limited functionality that won’t evolve too much with time.

If the software solution is critical for your startup and you are building a complex project with the higher end user, in that case, technology partner would always be the best option as they guarantee more professional approach and reliability in terms of abiding by their contractual obligations and product delivery as compare to freelancers.

Project Scope: Do you have all the technical requirements and a list of features clearly determined or do you need guidance on the project?

Gathering project details and designing technical document with detailed features is not an easy task especially for the non-tech founder. In this case, technology partner provides better options as they can assist in designing the full-scale software scope or suggest new features for future expansion and feedback for better development.

On the other hand, if you have a predefined project with full details, freelancers could be a better option as they are more cost-effective and flexible.

2. COST OF YOUR PROJECT

In the case of a newly founded startup, the limited budget is the biggest challenge. However, choosing the cheapest solution is not always the best option.

Freelancers are the best option if you are looking for an affordable option with a limited budget. Generally, the freelancers cost you less compare to technology partner due to no overhead charges. Additionally, you don’t have to worry about the rent of working space, extra amenities or hardware equipment.

If the software solution is critical for your startup and you are working on a complex project then technology partner would be the best choice if you can’t afford the full team on board or keep all the team once the product is developed. It is a bit expensive approach in compare to freelancers. In Asia, technology partners cost you around $25 to $100 per hour whereas in Europe it goes up to $200 per hour depending on the project.

3. CONTROL AND MANAGEMENT

Are you willing to invest some time in management or have capabilities and expertise to handle and guide your technical team? Capabilities and team management are crucial factors for your decision.

As a founder, the most important task should be to create a better business model for your startup without worrying about the technology aspect. And in this case, technology partners are great if you are looking for long term engagement. Generally, technology partners have their own internal teams for management and evaluation and expect very less attention from the client side.

Whereas, freelancers don’t have such teams and require constant guidance and feedback. Freelancer is a better option for tech founders where they can evaluate and provide feedback for a successful project.

4. RELIABILITY AND QUALITY

The success of any project depends on the reliability and quality of the team and there is no straight forward mathematical formula by which you can evaluate. Therefore, choosing the right reliable option is a challenge and sometimes you have to believe in your gut.

In-house team and technology partners are more reliable options than freelancers as they follow an established and proven approach. Whereas freelancers typically work on multiple projects at the same time and there is no surprise in that one day they can suddenly become ghosts.

In terms of quality, freelancers may provide you the best product but at the same time, they can also become your worst nightmare. Constant evaluation and feedback is the key to better results from freelancers.

Technology partner is little bit expensive approach but you get the best value of your investment in terms of quality. Technology partners usually do everything they can to successfully launch a project and provide quality work - even if it comes at a price.

BOTTOM LINE

Both freelancers or technology partner have their advantages and limitations. When choosing what matches your needs best, you should never decide on the cost alone, especially if it’s a long term engagement or critical for your business success.
By accounting all the above-mentioned factors and different circumstances we can state that:
Freelancers Are The Best Options When

• Building small software solution like POC or MVP with a clear scope and a very tight budget.
• You have the expertise and motivation to manage and guide your freelancer.

Technology Partners Are The Best Options When

• Building a complex software solution with multiple changes and modifications with time.
• Relaxed budget and looking for long term engagement.
• Looking for a reliable team which can independently develop your technology and advice you for further improvement.

What’s the biggest thing you’re struggling with right now that we as a technology consulting company can help you with? Feel free to reach out to us at info@jalantechnologies.com. We hope our assistance will help!