Deciding on a Software Team

At Lithios we meet with business owners every day to discuss their design and technical needs. In the process of meeting clients, determining scope, and evaluating the timeline and cost of projects we often discuss whether Lithios is the right fit for completing the project at hand. In the process of making this evaluation we often provide feedback on whether or not an owner should consider hiring individual contractors, a full internal team, or working with an agency like ours. Within this blog I want to give a better overview on the information an owner can leverage to make the best decision to meet their needs. This blog is a continuation of our last blog “The Pros and Cons of Subcontracting with a Software Development Agency.” If you haven’t read that blog, you should check it out as it provides some helpful definitions to some of the discussion points of this blog. 

Disclaimer: Every project we have completed is different. We work within a variety of industries (healthcare, sports, logistics, etc.) and with both experienced and inexperienced business owners. The advice we give is not applicable in every situation or project.

Defining the Various Product Team Types:

Individual Contractors/Freelancers

Business owners can choose to work with contractors or freelancers when developing a new product. Typically freelancers operate independently as 1099 contractors on part-time project engagements. The experience of these contractors can vary widely. A business owner can hire contractors for UX/UI design, Front-End Software Development, Back-End Software Development, Product Management, or just about any other business function.

Full-Internal Team

We classify a full-internal team as a team that has the capacity to fully discover, design, and develop a mobile or web application. Typically these teams comprise a Product Owner, a UX/UI designer, 1-2 Front-End Developers, and a Back-End Developer. The experience and size of internal-teams vary widely depending on the product being developed. Teams are created by hiring individuals to fill specific roles in an organization.

External Agency/Shop

Similar to the Full-Internal team, most agencies staff a team of individuals with varying technical skills and experience that collaborate to complete a project. Typically agencies carry a larger team to accommodate the needs of multiple projects and fractionally staff teams to align with the necessary project phases. Agencies often have several UX/UI designers, Software Developers, and Product Owners. The experience of agencies is typically showcased in their portfolio. (Here is an example Portfolio)

How to Decide What Type of Team to Build or Work with:

Let's start with understanding the various considerations that a business owner should make when it comes to evaluating building an application internally or externally. To complete any project a business owner must consider:

1. Cost (Short and Long-Term)
2. Scope of the Project
3. Stage of the Project
4. Technical Management Experience
5. The Scalability/Support Needs of the Project Going Forward

Whether hiring a team internally or working with an external partner it is critical that a business owner clearly define their needs for a project. To help figure out what kind of team would be best for a project we put together a chart that outlines a high-level breakdown ranking of the benefits of each type of team. As scope and stage of the project are highly variable, we did not give a point value to these categories. Note that 1 is optimal for a category and 3 is least optimal.

Now let’s discuss a few different scenarios to provide a few helpful examples on evaluating the best approach for a company to take. For the sake of our examples we will use Company ABC, Company DEF, and Company, XYZ.

Scenario 1: In this scenario, company ABC wants to create a software business to give plant owners a marketplace to buy and sell their plants. The owner has some experience building software but is very budget conscious and not prepared to hire a full-internal team. Additionally, the owner is still trying to validate their idea and isn’t sure they are ready to invest in a MVP or V1 product without knowing the market interest. In this scenario it makes the most sense for this entrepreneur to work with a contractor/s or do a smaller discovery engagement with an agency. By working with these independent freelancers or via a small engagement, the owner can work to validate their idea, create some rough prototypes, and further test their idea at minimal cost and without the overhead of a full-time team. After better validating their concept and obtaining financial support, they can consider working more intensively with an agency or hiring a full-internal team. 

Scenario 2: In this scenario, company DEF is interested in creating a highly specialized software product that leverages artificial intelligence to blur out faces on live camera news feeds. The owner has a long background in the news industry and in developing advanced software tools leveraging AI. He/she has recognized the need for a solution to provide this anonymity for users and has secured a large budget to develop this application. In this scenario, it makes the most sense for this entrepreneur to hire a full-internal team. This product will take months if not years to develop, will require specialized expertise to create and maintain, and will require the focus of a dedicated team of people who have extensive industry experience. Additionally, the owner would like to build an internal team so that the company can be acquired for its product and team in the long-term. 

Scenario 3: In this scenario, company XYZ wants to develop a software platform to provide users with the ability to monitor their pet’s diets and weight patterns over time. The owner has some experience in the industry and has a familiarity with the features that they are looking for in their ideal solution. Additionally, they have a moderate budget that they hope to increase as more users adopt the product. In this scenario it makes sense for the entrepreneur to work with an outside agency. The owner does not want to incur the financial risk associated with hiring a full-time team but does want to create a strong MVP to launch to consumers, grow, and iterate. By working with an agency, the team can leverage their experience to guide the owner in developing the right features at the right time and providing fractional resources to launch the first version of the product.

Final Thoughts

There is no one size fits all approach to software product development, but each of these team types caters to a different subset of clients and projects. We see companies transition between these varying team types frequently depending on the stage and success of a product. Our biggest recommendation to all owners is that you choose wisely the team that you work with. To create a successful product you should attempt to work with the most experienced, talented, and communicative team members regardless if they are contractors, agencies, or internal employees. These partners will undoubtedly lead to the success or failure of your product. There are no shortcuts in product development and finding the right team is the first major step!