Build vs Buy: When Contracting an App Makes Sense

Analysis

If you're setting out to build an app, you have a few different options to consider. Should you be part of a larger company, it's possible there are resources in-house. It's also possible you could wrangle together a group of freelancers or work with an agency like Savvy Apps. Finally, you might even consider raising money to build your app.

The right approach can vary based on a person's or company's background, experience, and the resources at their disposal. Contracting is always a worthwhile consideration though and it's not unique to apps or software. Whether a home needs to be constructed, an ad campaign needs to be created, or a wedding needs to be planned, professional teams are regularly relied on to provide their expertise and services. Here are some of the reasons contracting your app might make sense for you.

Get a Proven App Team on Day One

Even if you're able to build your own team, whether through hiring or raising money, it will take some time for them to get to know one another and operate at full capacity. When contracting your app, you immediately get a team who has chemistry, cadence, and history together. There will already be established processes and lessons learned, meaning you're getting a proven team on day one.

The corollary to this one is that while there will be a team of say 3-5 people working on your app, you'll have access to the collective experience of whoever you hire. When we face problems at Savvy Apps, we're able to quickly pull in other team members to troubleshoot and brainstorm instead of wasting hours googling for answers or ideas

One Destination for All App Expertise

Another benefit of hiring an entire app team is that you'll have a single, dedicated point of contact for all your app needs. You could attempt to have a similar experience by working with a bunch of freelancers. While there are some really good ones out there, the simplest description for doing that is trying to "herd cats." Even if you haven't heard that phrase before, you can imagine... it's not easy.

At an agency or professional services firm, you'll typically get assigned an account, project, or product manager who will oversee all aspects of your app. You'll also typically get dedicated focus and attention from all team members assigned to your app. Freelancers, on the other hand, are often balancing your project along with running their business. They'll be sending invoices, doing sales, and handling multiple requests while also trying to get work done for you

Focus and Grow Your Business

If we do our job right, then our customers are only ever focused on growing their businesses. That doesn't mean their app isn't important, it just means that their app is a part of a business. It's not their entire business.

Our customers regularly meet with partners, investors, affiliates, potential hires, their own customers, and comparable people each day. The best compliment we can receive is when they tell us they're not worried about the app. They get weekly builds that show progress and have at least one status meeting each week. Their feedback on that work is critical but equally as critical is landing a big deal or new investment. When you find a partner you can trust, it will help you truly become a CEO or leader in your company more quickly. It will take much more time for this to happen when building your own team

Bring Your App to Market Faster

Whether it's because a team is proven and established or all skills are under one roof, an agency can typically build an app much faster. That's just as important for an early-stage venture that needs to get to market as soon as possible or for an organization that might have an important event driving urgency.

There will be very little time dedicated to setting up logistics or operations ranging from HR procedures to payroll. After signing an agreement, work will begin immediately on your app. As I've detailed in the past, professional teams will also have a number of ways that they try to build apps faster.

Variable Burn Rate

Once the first version of an app is completed, the costs associated with it can be greatly reduced as required. In the startup world specifically, you might have heard the term "burn rate," which is how much money it costs to run your company each month. With an outside team, burn rates can be adjusted much more easily. Unlike with actual employees, the dollars allocated to a team like Savvy Apps are considered cost of sales and are not part of your operating expenses.

It's also worth noting that when you consider everything from compensation, benefits, overhead, equity (if a startup), and other numbers, an agency will often have a lower burn rate compared to having the same skills in a similar unproven team. So while $150,000 might look like a big number on paper, consider what hiring an experienced product manager, designer, mobile developer, back-end developer, and QA engineer would cost you in both real dollars and equity

Help Vet Your First Hires

What many people don't realize is that it's incredibly hard to hire for positions when you have little to no experience with that specific role or skill. While I outline some ways to vet various team members in App Savvy, having an actual developer interview a developer or designer do the same for a designer is much more thorough. For example, our development team reviews code samples and provides a code base with tests we created for vetting potential Savvy development team members.

While there are many benefits to having someone like us involved, we also help customers build their own team in-house over time. That usually doesn't make sense until we've gotten v1.0 released and iterated on the app extensively. For startups specifically, our recommendation is to not begin building an internal team until the app starts to scale and some seven-figure capital raise has occurred. In any case, having someone that can help vet for various roles is invaluable and will ensure your first hires are stronger. We'll even often have a transition period where those first in-house team members work with us parallel for a few releases before taking over various parts of the app—or the whole thing—themselves

Concluding Note

Obviously there are cases where doing work in-house or simply building a team make more sense. If you have extensive experience in the software industry, have built teams in the past, or founded previous companies, it may be easier for you to go with the "build" versus the "buy" approach. Even then, plugging in an established team for a new feature, bringing an app to a different platform, or just getting a fresh perspective can be helpful to driving your business forward.

Ken Yarmosh is the Founder & CEO of Savvy Apps. He's the creator of more than 20 featured apps, including an Editor's Choice selection and Starbucks Pick of the Week. An O'Reilly author, Ken regularly speaks about application design & development, as well as the future of technology at outlets ranging from Bloomberg TV to Google.

You made it this far so...