In-House? Off-Site? It’s Really Just A Question Of Psychology

We all tend to cling to familiar things and established norms. Even those of us who make our living surrounded by cutting-edge technology often find ourselves repeating old, comfortable patterns. The problem comes when those old patterns are actively damaging our bottom line.

Whenever I speak with CEOs and other startup executives, I hear the same old story: they’re dealing with world-first innovations, yet are far too conservative when it comes to their own manpower needs. They want to keep everything in-house. Why? Because that’s what other companies do, because it feels safer, because… Basically, because of psychological reasons. The reality is that the illusion of safety comes at an exorbitant price that can threaten the overall financial viability of their company.

Of course, I’ll admit that all other things being equal, it’s nice to have your developers in-house. But very few companies, let alone fledgling startups, can really afford that luxury. Let’s look at the hard facts:

In Israel, a single developer will cost your company roughly $150k a year, all-inclusive. And of course, we’re never talking about only one developer. Any company worth its salt needs a full team: a tech manager, mobile developers, front-end developers, back-end developers, QA engineers, DevOps personnel, and graphics designers. These are all an absolute MUST, even for the leanest, meanest startup out there. Now just imagine the price tag for maintaining that kind of team in-house. It might be cost-effective for a household name with money to burn like Google or Facebook, or even an established smaller business that’s raking in a healthy profit, but for so many other companies and startups, every dollar counts!

Why burn your hard-earned investment round on salaries when you’re just starting out? Why not keep your dev costs lean, and save valuable funds for marketing and business development? The only thing standing in your way is psychology. CEOs often tell me that they’re worried about their code being held by a (vetted, highly qualified) third party, when in fact there are plenty of cases where in-house developers stole code from right under executives’ noses. More people need to accept that “in-house” does not actually mean “more secure” or “more efficient” or “higher standards.”

Once you break through that mental barrier and find the right dev agency to work with – an agency with a proven track record, an agency you can trust – development will work for you, your product will evolve, quality standards will remain high, and costs will be a fraction of the alternative: namely, in-house developers.

So, when you’re considering how to format and structure your dev team after raising funds, I strongly recommend bearing these facts (not feelings!) in mind.

It’s time to embrace reality and a healthier bottom line.